US Department of Treasury Halts Enforcement of Corporate Transparency Act

On 2 March 2025, the United States Department of Treasury announced (Treasury Announcement) that it will not enforce any penalties or fines associated with the recently updated deadlines under the beneficial ownership information (BOI) reporting requirements of the US Corporate Transparency Act (CTA). Previously, on 27 February 2025, the Financial Crimes Enforcement Network of the Department of Treasury (FinCEN) had announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update BOI reports by the current deadlines until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed (FinCEN Announcement).

The Department of Treasury has further indicated it intends to propose revisions to the BOI reporting requirements that will narrow the scope of the rule to be applicable only to foreign reporting companies, which are corporations, limited liability companies or other entities formed under the laws of a foreign country and registered to do business in any US state or tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe. The Department of Treasury has also announced that it will not enforce any penalties or fines against US citizens or domestic reporting companies after these anticipated rule changes become effective. As such, US-formed subsidiary entities of UK companies should not be subject to penalties or fines for failure to timely file required BOI reports and may fall outside the scope of the BOI reporting requirements in future if these rule changes take effect.

However, due to the frequently changing landscape of the CTA and its BOI reporting requirements, both as a result of court actions and the Department of Treasury’s enforcement stance, companies should continue to be on alert for further developments. MBM will continue to monitor events and provide updates.

For a recap of the history of the BOI reporting requirements and associated enforcement positions, please see our previous blogs below.