Beneficial Ownership Information Reporting Deadline Extension for Reporting Companies Created or Registered in 2024, 83499-83504 [2023-26399]

Agencies

• DEPARTMENT OF THE TREASURY
• Financial Crimes Enforcement Network

[Federal Register Volume 88, Number 229 (Thursday, November 30, 2023)]
[Rules and Regulations]
[Pages 83499-83504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-26399]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 1010

RIN 1506-AB62


Beneficial Ownership Information Reporting Deadline Extension for 
Reporting Companies Created or Registered in 2024

AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.

ACTION: Final rule.

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SUMMARY: FinCEN is amending the beneficial ownership information (BOI) 
reporting rule (the ``Reporting Rule'') to extend the filing deadline 
for certain BOI reports. Under the Reporting Rule prior to this 
amendment, entities created or registered on or after the rule's 
effective date of January 1, 2024, had to file initial BOI reports with 
FinCEN within 30 calendar days of notice of their creation or 
registration. This amendment extends that filing deadline from 30 
calendar days to 90 calendar days for entities created or registered on 
or after January 1, 2024, and before January 1, 2025, to give those 
entities additional time to understand the new reporting obligation and 
collect the necessary information to complete their filings. Entities 
created or registered on or after January 1, 2025, will continue to 
have 30 calendar days to file their BOI reports with FinCEN.

DATES: This rule is effective January 1, 2024.

FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section 
at 1-800-767-2825 or electronically at [email protected].

SUPPLEMENTARY INFORMATION:

[[Page 83500]]

I. Introduction

    In this final rule, FinCEN is amending the Reporting Rule \1\ to 
extend the deadline to file initial BOI reports for entities created or 
registered on or after the rule's effective date of January 1, 2024, 
and before January 1, 2025. The Reporting Rule had required such 
entities to file initial BOI reports with FinCEN within 30 calendar 
days of notice of their creation or registration. This final rule 
extends that filing deadline to 90 calendar days for entities created 
or registered on or after January 1, 2024, and before January 1, 2025. 
The extension will give those entities additional time to understand 
the new reporting obligation and collect the necessary information to 
complete their filings. Entities created or registered on or after 
January 1, 2025, will continue to have 30 calendar days from notice of 
their creation or registration to file their BOI reports with FinCEN.
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    \1\ U.S. Department of the Treasury (Treasury), FinCEN, 
Beneficial Ownership Information Reporting Requirements, 87 FR 59498 
(September 30, 2022).
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II. Background

A. The Reporting Rule

    On September 30, 2022, FinCEN published the Reporting Rule, with an 
effective date of January 1, 2024.\2\ The Reporting Rule requires 
certain corporations, limited liability companies, and other similar 
entities (``reporting companies'') \3\ to report certain identifying 
information about the beneficial owners who own or control such 
entities and the company applicants who form or register them.\4\ These 
requirements are intended to facilitate access to BOI for certain 
authorized recipients, including law enforcement and regulators, for 
the purpose of countering money laundering, the financing of terrorism, 
and other illicit activity.\5\ The Corporate Transparency Act (CTA) 
directs FinCEN to promulgate regulations that achieve the objectives of 
the statute, while minimizing burdens on reporting companies to the 
greatest extent practicable and ensuring that the BOI collected is 
``highly useful'' for national security, intelligence, and law 
enforcement activities.\6\
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    \2\ The Reporting Rule is the first in a series of rulemakings 
to implement the Corporate Transparency Act (CTA), enacted on 
January 1, 2021, as part of the Anti-Money Laundering Act of 2020 
and codified at 31 U.S.C. 5336. The CTA is Title LXIV of the William 
M. (Mac) Thornberry National Defense Authorization Act for Fiscal 
Year 2021, Public Law 116-283 (January 1, 2021) (NDAA). Division F 
of the NDAA is the Anti-Money Laundering Act of 2020, which includes 
the CTA.
    \3\ See 31 U.S.C. 5336(a)(11).
    \4\ See supra footnote 1, at 59498-99.
    \5\ CTA, Section 6402 (January 1, 2021).
    \6\ Id.
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    For domestic or foreign reporting companies created or registered 
to do business in the United States before the rule's effective date of 
January 1, 2024, the Reporting Rule requires that they file initial BOI 
reports with FinCEN by January 1, 2025.\7\ Prior to the amendment of 
this final rule, a reporting company created or registered on or after 
January 1, 2024, however, would have been required to file its initial 
BOI report within 30 calendar days of the earlier of the date on which 
it receives actual notice or public notice that it has been created or 
registered.\8\ The Reporting Rule requires reporting companies created 
on or after January 1, 2024, to report to FinCEN information about 
themselves, as well as information about two categories of individuals: 
(1) their beneficial owners; and (2) their company applicants, who are 
the individuals who filed a document to create the reporting company or 
registered it to do business.\9\
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    \7\ Reporting Rule, 31 CFR 1010.380(a)(iii).
    \8\ Id. at 1010.380(a)(i)-(ii).
    \9\ Id. at 1010.380(a)(ii).
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B. The Reporting Deadline Extension NPRM

    On September 28, 2023, FinCEN published a notice of proposed 
rulemaking that would amend the Reporting Rule by extending the period 
for certain reporting companies to file initial BOI reports (the 
``Reporting Extension NPRM'').\10\ Under this proposed amendment, 
reporting companies created or registered on or after January 1, 2024, 
and before January 1, 2025, would have 90 calendar days to submit their 
initial BOI reports, instead of 30 calendar days. Reporting companies 
created or registered on or after January 1, 2025, would continue to be 
required to submit their initial BOI reports within 30 calendar days. 
FinCEN proposed the extension based on comments from trade 
associations, non-profits, and other key stakeholder organizations. As 
explained in the Reporting Extension NPRM, extending the deadline for 
reporting companies created or registered on or after January 1, 2024, 
and before January 1, 2025, would give those entities additional time 
to: (1) understand and comply with the Reporting Rule; (2) obtain the 
information necessary to complete their initial BOI reports; and (3) 
resolve questions that may arise in the process of completing the 
initial BOI reports.\11\ The Reporting Extension NPRM also explained 
that the Reporting Rule establishes a legal regime that is entirely new 
to the United States, and the NPRM explained that FinCEN assessed that 
entrepreneurs and their service providers that create or register new 
business entities in the United States need additional time to learn 
about the Reporting Rule's requirements during the first year in which 
this regulation is effective.
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    \10\ Treasury, FinCEN, Beneficial Ownership Information 
Reporting Deadline Extension for Reporting Companies Created or 
Registered in 2024, Proposed Rule, 88 FR 66730 (September 28, 2023).
    \11\ Although the CTA provides that reports are to be filed by 
entities created or registered on or after January 1, 2024, ``at the 
time of formation or registration,'' 31 U.S.C. 5336(b)(1)(C), FinCEN 
may prescribe an exemption from that requirement consistent with the 
directive to ensure that the database is highly useful to law 
enforcement while at the same time minimizing burdens on reporting 
companies. See CTA, Section 6402(8). FinCEN believes it is 
appropriate to do so for entities created or registered on or after 
January 1, 2024, and before January 1, 2025, for the reasons noted 
here. Under 31 U.S.C. 5318(a)(7), FinCEN has authority to 
``prescribe an appropriate exemption from a requirement under this 
subchapter,'' which includes the CTA in section 5336.
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    In response to the Reporting Extension NPRM, FinCEN received 50 
comments. Submissions came from a variety of corporate organization 
professionals, small business owners, trade groups, and individual 
members of the public. Many of these commenters supported FinCEN's 
proposed rule. Other commenters, while supportive of the intent behind 
the proposed rule, suggested alternative reporting deadlines such as 
120 days after reporting companies are created or registered. Numerous 
commenters wanted FinCEN to apply the 90-day timeframe to all entities 
created or registered on or after January 1, 2024, not just those 
created or registered before January 1, 2025. Still other commenters 
suggested aligning the BOI reporting deadline with a reporting 
company's tax filing deadline. One comment was critical of the proposed 
rule, claiming that the proposal did not offer sufficient relief to 
reporting companies. Lastly, FinCEN received comments on several topics 
that were not relevant to the Reporting Extension NPRM, and which 
FinCEN has addressed or will address in other CTA-related rulemakings 
or guidance.

III. Discussion of Comments Received

A. Support for the 90-Day Reporting Extension

    Comments Received. A majority of the commenters agreed with the 
proposed rule's extended deadline and encouraged FinCEN to promulgate 
the rule as written. Generally, these comments stressed the importance 
for

[[Page 83501]]

small businesses to receive additional time to comply with the BOI 
filing deadline. One commenter observed that small businesses have a 
``myriad of administrative tasks'' and opined that entities would feel 
rushed when attempting to comply with the original BOI filing deadline 
of 30 calendar days. This sentiment was echoed by another commenter who 
noted that new entities must typically gather numerous documents in 
coordination with other parties, such as attorneys, and that the 
original 30-day filing deadline would be ``stressful.'' This commenter 
argued that the 90-day extension would reduce the number of entities 
that would later have to file corrective reports, and consequently 
reduce the overall amount of paperwork and expenses associated with 
filing. Further, one commenter noted that entity formation can take 
longer than 30 days as other governmental entities may require greater 
than 30 days to ``process'' entities' respective registration 
applications.
    A commenter noted that the proposed extension would give attorneys 
and others providing filing assistance to reporting companies more time 
to understand BOI reporting requirements. One commenter noted that an 
extension to this deadline would lighten entities' initial regulatory 
burden.
    Commenters also argued that the extension will give FinCEN 
additional time to implement the BOI regulations. One commenter opined 
that this proposed extension would give FinCEN additional time so as 
not to be ``overwhelmed'' with new reports, while another commenter 
stated that the additional time would allow FinCEN to publish 
frequently asked questions (FAQs) or related guidance. One commenter 
suggested that an extension would reduce non-compliance and potential 
penalties. No commenters explicitly opposed extending the deadline, 
though as discussed below in Section III.B, one commenter was critical 
of the proposed rule for not offering sufficient relief to reporting 
companies.
    Final Rule. FinCEN has carefully considered commenters' views and 
agrees that extending the reporting deadline for reporting companies 
created or registered on January 1, 2024, and before January 1, 2025, 
will help such companies to become aware of their reporting obligations 
and submit BOI reports to FinCEN. FinCEN therefore adopts the rule as 
proposed and extends the deadline for these reporting companies from 30 
to 90 calendar days.

B. Alternatives to the 90-Day Reporting Extension

    Comments Received. Numerous commenters, while in favor of extending 
the initial filing deadline for reporting companies created or 
registered on or after January 1, 2024, and before January 1, 2025, 
argued for making the deadline more than 90 calendar days after 
creation or registration or, alternatively, for an initial BOI report 
filing deadline aligned to tax filing deadlines. These commenters 
generally did not distinguish between entities created or registered in 
the first year of the new reporting requirement (on or after January 1, 
2024, and before January 1, 2025), and new entities generally. One 
commenter argued that with January 1, 2024, quickly approaching and 
FinCEN having provided relatively little guidance (in the commenter's 
opinion), all new entities should be given 120 days to file their 
initial BOI reports. The commenter stated that a 120-day timeframe 
would promote greater accuracy in information submitted to FinCEN. 
Another commenter suggested the deadline be either 90 days or ``within 
the calendar year,'' whichever was longer. The commenter argued that 
this flexibility would help certified public accountants (CPAs), who 
might only discover a reporting company's BOI reporting obligation at 
tax time.
    A trade organization representing CPAs was critical of the 
extension because it found the 90-day timeline to be inadequate. This 
commenter argued for an initial filing deadline of one year from 
creation or registration. The commenter cited various concerns, such as 
the need for greater awareness of the reporting requirements among 
small businesses and the potential for these businesses facing 
penalties for non-compliance.
    Similarly, multiple commenters argued that all new reporting 
companies' deadlines should be either 90 days or the income tax return 
deadline specifically, whichever was longer. These commenters argued 
that new businesses, and in particular small businesses, rely upon CPAs 
to assist with filing income tax returns. To this point, three 
commenters echoed others' sentiments in stating that individuals often 
make CPAs aware of new businesses having been created when seeking 
assistance with tax return filings. Therefore, the commenters argued 
that a deadline based upon the tax return deadline would allow CPAs to 
assist with both tax return filings and BOI filings at the same time.
    Final Rule. FinCEN has carefully considered each comment supporting 
an extension greater than 90 calendar days, or a deadline to be aligned 
with IRS tax return filing deadlines, but declines to adopt these 
changes to the proposed rule. FinCEN believes the additional published 
guidance, the availability of the contact center FinCEN is preparing 
that will allow members of the public to contact FinCEN with questions 
concerning BOI reporting, and the 90-day timeframe will provide members 
of the general public with sufficient time, awareness, and opportunity 
to consult third parties (such as CPAs or attorneys) as the BOI 
regulatory framework is first implemented. It will also provide both 
those third parties and the general public with guidance and other 
information to assist in providing advice and making decisions. FinCEN 
further declines to extend the deadline to the longer of 90 days or the 
``end of the year.'' \12\ This arrangement would allow a reporting 
company created or registered in January to wait until December 31 of 
the same year to file its initial BOI report, while a reporting company 
created or registered at or near the end of September of that same year 
would be required to file within 90 days. Such disparate treatment of 
similarly situated reporting companies is unwarranted and would not 
address any difficulties caused by a novel reporting requirement more 
effectively than the filing extension that FinCEN proposed.
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    \12\ Some comments discussed the merits of an extended reporting 
deadline without reference to the January 1, 2025, endpoint that 
FinCEN proposed. FinCEN understands these comments to be effectively 
in favor of a permanent alteration of reporting deadline to 90 
calendar days for all new reporting companies, regardless of when 
created or registered, and addresses those comments in section 
III.C.
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    FinCEN also declines to align its filing deadline for initial BOI 
reports to income tax return deadlines. Were FinCEN to align the 
initial BOI report deadline to the income tax return filing deadline, 
some reporting companies could file their BOI reports many months, and 
even the following year, after they have been created or registered. 
This would create significant discrepancies between the filing time 
allotted to otherwise similarly situated reporting companies. In 
addition, such a delay would mean that filed information about new 
reporting companies would be significantly out of date for the entire 
period from January 1, 2024, until after the 2025 tax filing season, 
which would not align with the CTA's mandate to ``collect information 
in a form and manner that is reasonably designed to generate a database 
that is highly useful to national security,

[[Page 83502]]

intelligence, and law enforcement agencies and Federal functional 
regulators.'' \13\ Preserving the utility of the database to the 
greatest extent possible dictates that an extension of the filing 
deadline should be only as long as needed to provide meaningful relief 
in the first year that the BOI reporting framework is in effect.
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    \13\ CTA, Section 6402(8)(C).
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C. The Timeframe To File for Entities Created or Registered After 2024

    Comments Received. Some commenters urged FinCEN to apply the 90-day 
BOI reporting deadline extension to all reporting companies created or 
formed on or after January 1, 2024, instead of limiting the 90-day 
extension to only those new entities created in calendar year 2024. One 
commenter argued that the 90-day extension should apply to all 
reporting companies created or formed on or after January 1, 2024, 
because law firms and corporate formation services will find it 
burdensome to create systems for a 90-day BOI reporting timeframe in 
2024 and then have to change their systems in 2025 to account for the 
30-day timeline. Other commenters cited the logic in the preamble to 
the Reporting Extension NPRM as supportive of extending the 90-day 
extension beyond 2024. These commenters noted the rationale behind the 
proposed rule, including the need to give reporting companies 
additional time to understand their obligations under the Reporting 
Rule and obtain the information required under the rule during the 
first year the Reporting Rule is effective. The reasons FinCEN provided 
for giving reporting companies more time in 2024 would also justify 
giving reporting companies more time in the years beyond 2024, 
according to these commenters.
    Final Rule. FinCEN has carefully considered commenters' arguments 
to make the 90-day reporting extension permanent, but FinCEN is 
declining to adopt this change to the Reporting Rule. FinCEN believes 
that new reporting companies that are created or registered in 2024 
will be in a different position than those reporting companies created 
or registered in and after 2025, because 2024 is the first year in 
which the Reporting Rule is effective. The Reporting Rule creates an 
entirely new legal framework for newly formed or registered companies 
in the United States. It is particularly important for companies and 
company-formation advisers to have additional time to understand the 
new requirements and learn how to comply with them when the framework 
is new. After 2024, however, FinCEN believes that the public will be 
more familiar with this new regime as a result of FinCEN's outreach and 
educational efforts, which will continue throughout 2024. Consequently, 
after 2024, newly created or registered reporting companies will have 
greater awareness of the Reporting Rule's requirements, and they will 
be in a better position to comply with the requirements within the 30-
day timeline set out in the Reporting Rule than they would have been in 
2024.
    FinCEN recognizes commenters' concerns that the 30-day timeframe 
for filing BOI reports after 2024 may pose difficulties because many 
small businesses do not employ lawyers or other corporate service 
providers and therefore may not learn about the Reporting Rule and 
associated BOI reporting requirement within a 30-day timeframe. FinCEN 
is taking into account these concerns as it implements its outreach 
strategy, in particular by planning for its outreach and educational 
efforts to reach the general public, not only service providers. FinCEN 
expects the public to become increasingly aware of the BOI reporting 
requirements as 2024 progresses, and in the coming years FinCEN will 
build upon its existing efforts to educate entrepreneurs who start new 
reporting companies.
    Further, while following the CTA's directive to minimize burdens on 
reporting companies to the greatest extent practicable, which this 
final rule aims to do, FinCEN must also satisfy the CTA's requirement 
that the BOI database must be ``highly useful'' in facilitating 
national security, intelligence, and law enforcement activities.\14\ To 
be ``highly useful,'' the database must be reasonably up-to-date and 
accurate, and FinCEN believes that the Reporting Rule's 30-day 
timeframe for filing BOI reports to FinCEN will help achieve this goal. 
FinCEN gives weight to commenters' concerns that new reporting 
companies have many challenges to grapple with in their first few 
months of operation. However, FinCEN does not believe these concerns 
warrant a permanent departure from the prompt BOI reporting regime 
specified by Congress.\15\
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    \14\ CTA, Section 6402(8)(C).
    \15\ The plain language of the CTA requires reporting companies 
formed or registered after the effective date of the Reporting Rule 
to file their BOI reports with FinCEN ``at the time of formation or 
registration.'' See 31 U.S.C. 5336(b)(1)(C). As discussed above, 
FinCEN is using its exemptive authority under 31 U.S.C. 5318(a)(7) 
to extend this deadline to 90 days temporarily. See supra footnote 
12. By not maintaining this extension any longer than necessary to 
provide relief, however, this final rule better aligns FinCEN's BOI 
reporting regulations with the overall statutory scheme.
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    Considering the balance that FinCEN must strike among reducing 
burdens on reporting companies, making the BOI database highly useful, 
and complying with the directive set out in the CTA that companies must 
report BOI ``at the time of formation or registration,'' \16\ FinCEN 
believes that the 30-day timeframe is appropriate for reporting 
companies that come into existence or are registered after 2024. FinCEN 
makes this determination based on the information currently available, 
including the comments it received in response to the Reporting 
Extension NPRM, which focused primarily on reducing burdens to 
reporting companies. During the first few years of the implementation 
of the Reporting Rule, FinCEN will monitor compliance with the BOI 
reporting deadlines and will consider whether any adjustments to the 
permanent reporting timeframe for newly created or registered reporting 
companies are warranted.
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    \16\ 31 U.S.C. 5336(b)(1)(C).
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D. Other Issues Raised by Commenters

    Commenters also discussed a number of issues that were not relevant 
to the Reporting Extension NPRM, such as the timeframe for updating or 
correcting BOI reports, access to FinCEN's BOI database, the FinCEN 
identifier, and other matters. Some of the issues raised by these 
commenters have been or will be dealt with in separate FinCEN 
rulemakings that implement the CTA, while other issues are addressed in 
guidance. Comments on issues that go beyond the scope of this final 
rule are briefly discussed here.
    Comments Received. A number of comments addressed issues that 
FinCEN raised, received comments on, and made final determinations 
about in the course of proposing and finalizing the Reporting Rule. 
Several commenters requested that FinCEN extend the timeframe that 
reporting companies have to update or correct their BOI reports. These 
commenters claimed that reporting companies need more than the 30 
calendar days that the Reporting Rule provided for them to update or 
correct BOI reports. One commenter requested clarification on what it 
means for reporting companies to be ``created'' for purposes of knowing 
when to begin the 90-day window within which reporting companies 
created or formed in 2024 must file their BOI reports with FinCEN. 
Another commenter claimed that as important as the 90-day extension in 
the NPRM is, equally important for FinCEN

[[Page 83503]]

to consider is making FinCEN's electronic filing system available to 
corporate formation service providers prior to January 1, 2024, so that 
they are prepared to quickly assist newly created reporting companies 
in filing their BOI reports. Other commenters emphasized the need for 
FinCEN to conduct additional outreach so that small businesses, trade 
associations, and professional service providers are aware of the 
requirements of the Reporting Rule. One commenter argued that the 
Reporting Rule's estimate of the costs that reporting companies will 
incur in complying with the rule is inaccurate since these companies 
will need to monitor changes that would require updates to their 
initial BOI report, and they will often incur costs associated with 
professional services hired to understand the reporting requirements.
    Other comments that addressed issues that went beyond the scope of 
the Reporting Extension NPRM are more relevant to ongoing FinCEN 
regulations and guidance related to the CTA. For example, one commenter 
asked FinCEN to clarify, among other things, how financial institutions 
will access the FinCEN BOI database, how financial institutions should 
obtain customer consent to request BOI from the database, how these 
institutions should approach discrepancies between BOI found in the 
database and BOI obtained directly from customers pursuant to the final 
rule on customer due diligence obligations that FinCEN published in 
2016 (the ``2016 CDD Rule'').\17\ Other commenters had additional 
questions regarding how financial institutions should reconcile their 
existing CDD obligations with the Reporting Rule and the proposed 
requirements under the proposed rule that FinCEN issued on December 16, 
2022, concerning access to BOI and safeguards for protecting BOI (the 
``Access NPRM'').\18\
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    \17\ Treasury, FinCEN, Customer Due Diligence Requirements for 
Financial Institutions, 81 FR 29398 (May 11, 2016).
    \18\ Treasury, FinCEN, Beneficial Ownership Information Access 
and Safeguards, and Use of FinCEN Identifiers for Entities, Proposed 
Rule, 87 FR 77404 (December 16, 2022).
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    Final Rule. FinCEN has reviewed the comments on issues that are not 
relevant to the Reporting Extension NPRM and is not adopting changes to 
this final rule as a result of these comments. However, FinCEN is 
responding to several of the comments in order to provide clarification 
on certain issues.
    First, as for questions about the meaning of when a reporting 
company is deemed to be ``created'' in order to set the 90-day 
timeframe for reporting BOI by reporting companies created or formed in 
2024, the Reporting Extension NPRM did not propose to alter the 
approach that FinCEN took in the Reporting Rule. Under the Reporting 
Rule, a domestic or foreign reporting company is ``created'' or 
``registered'' when it receives actual notice or constructive (public) 
notice, whichever is earlier, that the company has been created or 
registered.\19\ This remains unchanged.
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    \19\ Reporting Rule, 31 CFR 1010.380(a)(i)-(ii).
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    Second, FinCEN considers that a distinction needs to be made 
between providing additional time for reporting companies to file their 
initial BOI reports, and providing additional time for them to update 
or correct those reports. FinCEN believes that extending the deadline 
for reporting companies created or registered on or after January 1, 
2024, and before January 1, 2025, to file their initial BOI reports is 
appropriate because of the need to give these companies additional time 
to become aware of the Reporting Rule, collect BOI and company 
applicant information, and file their initial reports during the first 
year that the Reporting Rule is effective. But as reporting companies 
and third party service providers become aware of the Reporting Rule 
and file their initial BOI reports, FinCEN believes they will also have 
time to review the rules concerning updates and corrections to these 
reports and to file updates or corrections with FinCEN, or assist in 
such filings, as appropriate. Thus, no extension of the deadline to 
update and correct BOI reports is necessary.
    Finally, as for comments concerning access to the BOI database, 
including how financial institutions should obtain customer consent in 
order to access the database, these issues are the topic of the Access 
NPRM and the forthcoming final rule on beneficial ownership access and 
safeguards. Similarly, issues raised by one commenter concerning 
discrepancies between BOI financial institutions obtain directly from 
customers and BOI obtained from the FinCEN database will be addressed 
in a future rulemaking on revisions to the 2016 CDD Rule required by 
the CTA.\20\ FinCEN is declining to address any other issues raised by 
commenters to the proposed rule that are not strictly within the scope 
of the Reporting Extension NPRM.
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    \20\ See CTA, Section 6304(d).
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IV. Regulatory Analysis

    FinCEN has analyzed the final rule as required under Executive 
Orders 12866, 13563, and 14094; the Regulatory Flexibility Act; the 
Unfunded Mandates Reform Act; and the Paperwork Reduction Act. This 
rule would not have an annual effect on the economy of $200 million or 
otherwise constitute a ``significant regulatory action'' as defined in 
section 3(f) of Executive Order 12866, as amended. Pursuant to the 
Regulatory Flexibility Act, FinCEN certifies that the final rule would 
not have a significant economic impact on a substantial number of small 
entities. FinCEN has assessed that the rule would result in no 
additional costs to small businesses. Furthermore, pursuant to the 
Unfunded Mandates Reform Act, FinCEN has concluded that the final rule 
would not result in an expenditure of $177 million or more annually by 
state, local, and Tribal governments or by the private sector.\21\ 
FinCEN does not estimate any burden, as defined by the Paperwork 
Reduction Act, associated with the final rule.
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    \21\ The Unfunded Mandates Reform Act requires an assessment of 
mandates that will result in an annual expenditure of $100 million 
or more, adjusted for inflation. The U.S. Bureau of Economic 
Analysis reports the annual value of the gross domestic product 
(GDP) deflator in 1995, the year of the Unfunded Mandates Reform 
Act, as 71.823, and as 127.224 in 2022. See U.S. Bureau of Economic 
Analysis, ``Table 1.1.9. Implicit Price Deflators for Gross Domestic 
Product'' (accessed Friday, June 2, 2023). Thus, the inflation 
adjusted estimate for $100 million is 127.224/71.823 x 100 = $177 
million.
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    FinCEN assesses that the extension of the reporting deadline for 
entities created or registered in the first year of the reporting 
requirement will not impose new costs. The costs for BOI reporting have 
been estimated in the regulatory impact analysis (RIA) in the Reporting 
Rule.\22\ In that RIA, FinCEN estimated the total number of reporting 
companies in 2024, the first year that the Reporting Rule will go into 
effect, to be approximately 32.6 million. The Reporting Rule RIA also 
estimated the costs for these reporting companies in filing their 
initial BOI reports, analyzing the potential cost of each step in the 
filing process.\23\ FinCEN's analysis in the final Reporting Rule would 
not be changed by the extension of the reporting timeline for new 
reporting companies created or registered in 2024 from 30 calendar days 
to 90 calendar days.
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    \22\ See Treasury, FinCEN, Beneficial Ownership Reporting 
Requirements, 87 FR 59549-59591 (December 8, 2021).
    \23\ Id.
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    FinCEN acknowledges that this 90-day reporting timeframe would 
shift some of the estimated aggregate cost in the Reporting Rule RIA 
from ``Year 1'' (2024) to ``Year 2'' (2025) in the analysis. This shift 
in cost is difficult to quantify. However, FinCEN assesses

[[Page 83504]]

that the shift of these costs would be de minimis and would not change 
the conclusions of the Reporting Rule's RIA. Additionally, the per-
reporting company burden and cost estimate in the Reporting Rule RIA 
would not be affected by the final rule.
    Furthermore, FinCEN notes that the change in the reporting timeline 
for reporting companies created or registered in 2024 would likely have 
multiple benefits. As discussed in Section III.A above, FinCEN received 
many comments in response to the NPRM that supported the reporting 
deadline extension and agreed with FinCEN's view that the extension 
would benefit reporting companies. These benefits include additional 
time for these companies to understand and comply with the requirements 
of the Reporting Rule, as well as greater opportunities for FinCEN to 
efficiently respond to questions and address problems that reporting 
companies may have in complying.

V. Effective Date

    This final rule will be effective January 1, 2024, the same date as 
the Reporting Rule it is amending but potentially fewer than 30 days 
after this rule's publication in the Federal Register. Under 5 U.S.C. 
553(d) of the Administrative Procedure Act (APA), a 30-day delayed 
effective date is required, except for ``(1) substantive rules which 
grant or recognize an exemption or relieve a restriction; (2) 
interpretative rules and statements of policy; or (3) as otherwise 
provided by the agency for good cause found and published with the 
rule.'' A delayed effective date of fewer than 30 days for this rule is 
authorized under both 5 U.S.C. 553(d)(1) and 553(d)(3).
    First, this rule grants an exemption and relieves a restriction by 
extending the reporting deadline for certain entities to 90 calendar 
days, relieving these entities from the shorter 30-day filing deadline 
under the Reporting Rule. Thus, it may be effective without a 30-day 
delay under 5 U.S.C. 553(d)(1).
    Second, FinCEN finds good cause under 5 U.S.C. 553(d)(3) to make 
this rule effective on January 1, 2024, because a 30-day delayed 
effective date is unnecessary. The purpose of the 30-day delayed 
effective date is to ``give affected parties a reasonable time to 
adjust their behavior before the final rule takes effect.'' Omnipoint 
Corp. v. Fed. Commc'n Comm'n, 78 F.3d 620, 630 (D.C. Cir. 1996). The 
parties affected by this rule, however, do not need time to adjust 
their behavior because the rule does not impose any new obligations on 
them; to the contrary, this rule gives affected parties additional time 
to adjust their behavior to the requirements of the Reporting Rule.

List of Subjects in 31 CFR Parts 1010

    Administrative practice and procedure, Aliens, Authority 
delegations (Government agencies), Banks and banking, Brokers, Business 
and industry, Citizenship and naturalization, Commodity futures, 
Currency, Electronic filing, Federal savings associations, Federal-
States relations, Foreign persons, Holding companies, Indians, Indian-
law, Indians-tribal government, Insurance companies, Investigations, 
Investment advisers, Investment companies, Law enforcement, Penalties, 
Reporting and recordkeeping requirements, Securities, Small business, 
Terrorism, Time.

Authority and Issuance

    For the reasons set forth in the preamble, the U.S. Department of 
the Treasury and Financial Crimes Enforcement Network amend 31 CFR part 
1010 as follows:

PART 1010--GENERAL PROVISIONS

0
1. The authority citation for part 1010 continues to read as follows:

    Authority:  12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314 
and 5316-5336; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307; 
sec. 2006, Pub. L. 114-41, 129 Stat. 458-459; sec. 701, Pub. L. 114-
74, 129 Stat. 599.


0
2. In Sec.  1010.380, revise paragraphs (a)(1)(i) and (ii) to read as 
follows:


Sec.  1010.380  Reports of beneficial ownership information.

    (a) * * *
    (1) * * *
    (i)(A) Any domestic reporting company created on or after January 
1, 2024, and before January 1, 2025, shall file a report within 90 
calendar days of the earlier of the date on which it receives actual 
notice that its creation has become effective or the date on which a 
secretary of state or similar office first provides public notice, such 
as through a publicly accessible registry, that the domestic reporting 
company has been created.
    (B) Any domestic reporting company created on or after January 1, 
2025, shall file a report within 30 calendar days of the earlier of the 
date on which it receives actual notice that its creation has become 
effective or the date on which a secretary of state or similar office 
first provides public notice, such as through a publicly accessible 
registry, that the domestic reporting company has been created.
    (ii)(A) Any entity that becomes a foreign reporting company on or 
after January 1, 2024, and before January 1, 2025, shall file a report 
within 90 calendar days of the earlier of the date on which it receives 
actual notice that it has been registered to do business or the date on 
which a secretary of state or similar office first provides public 
notice, such as through a publicly accessible registry, that the 
foreign reporting company has been registered to do business.
    (B) Any entity that becomes a foreign reporting company on or after 
January 1, 2025, shall file a report within 30 calendar days of the 
earlier of the date on which it receives actual notice that it has been 
registered to do business or the date on which a secretary of state or 
similar office first provides public notice, such as through a publicly 
accessible registry, that the foreign reporting company has been 
registered to do business.
* * * * *

Andrea M. Gacki,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2023-26399 Filed 11-29-23; 8:45 am]
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