Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension, 13688-13697 [2025-05199]

Agencies

• DEPARTMENT OF THE TREASURY
• Financial Crimes Enforcement Network

[Federal Register Volume 90, Number 57 (Wednesday, March 26, 2025)]
[Rules and Regulations]
[Pages 13688-13697]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-05199]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 1010

RIN 1506-AB49


Beneficial Ownership Information Reporting Requirement Revision 
and Deadline Extension

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

ACTION: Interim final rule; request for comments.

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SUMMARY: FinCEN is adopting this interim final rule to narrow the 
existing beneficial ownership information (BOI) reporting requirements 
under the Corporate Transparency Act (CTA) to require only entities 
previously defined as ``foreign reporting companies'' to report BOI. 
Under this interim final rule, entities previously defined as 
``domestic reporting companies'' are exempted from the reporting 
requirements and do not have to report BOI to FinCEN, or update or 
correct BOI previously reported to FinCEN. With limited exceptions, the 
interim final rule does not change the existing requirement for foreign 
reporting companies to file BOI reports, but it extends the deadline to 
file initial BOI reports, and to update or correct previously filed BOI 
reports, to 30 days from the date of this publication to give foreign 
reporting companies additional time to comply. However, the interim 
final rule exempts foreign reporting companies from having to report 
the BOI of any U.S. persons who are

[[Page 13689]]

beneficial owners of the foreign reporting company and exempts U.S. 
persons from having to provide such information to any foreign 
reporting company for which they are a beneficial owner. FinCEN is 
accepting comments on this interim final rule. FinCEN will assess the 
exemptions, as appropriate, in light of those comments and intends to 
issue a final rule this year.

DATES: This rule is effective March 26, 2025. Written comments must be 
received on or before May 27, 2025.

ADDRESSES: Comments may be submitted by any of the following methods:
     Federal E-Rulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments. Refer to Docket Number 
FINCEN-2025-0001, the Office of Management and Budget (OMB) control 
number 1506-0076, and Regulatory Identification Number (RIN) 1506-AB49.
     Mail: Policy Division, Financial Crimes Enforcement 
Network, P.O. Box 39, Vienna, VA 22183. Refer to Docket Number FINCEN-
2025-0001, OMB control number 1506-0076 and RIN 1506-AB49.

FOR FURTHER INFORMATION CONTACT: FinCEN's Regulatory Support Section by 
submitting an inquiry at www.fincen.gov/contact.

SUPPLEMENTARY INFORMATION:

I. Background

    On January 1, 2021, Congress enacted into law the CTA as part of 
the broader Anti-Money Laundering Act of 2020.\1\ Section 6403 of the 
CTA, among other things, amends the Bank Secrecy Act (BSA) by adding a 
new section 5336, Beneficial Ownership Information Reporting 
Requirements, to subchapter II of chapter 53 of title 31, United States 
Code. This section established new BOI reporting requirements for many 
corporations, limited liability companies, and other similar entities 
operating in the United States. The CTA excludes from that general 
definition, however, specified categories of businesses. The CTA also 
authorizes the Secretary of the Treasury (Secretary) to exempt any 
other ``entity or class of entities'' for which the Secretary, with the 
written concurrence of the Attorney General and the Secretary of 
Homeland Security, has, by regulation, determined that ``requiring 
beneficial ownership information from the entity or class of entities . 
. . would not serve the public interest'' and ``would not be highly 
useful in national security, intelligence, and law enforcement agency 
efforts to detect, prevent, or prosecute money laundering, the 
financing of terrorism, proliferation finance, serious tax fraud, or 
other crimes.'' \2\ In addition, section 5318(a)(7) of the BSA provides 
that the Secretary may make appropriate exemptions from a requirement 
in the BSA or regulations prescribed under the BSA.\3\ Taken together, 
these provisions authorize the issuance of regulations that may provide 
additional exemptions from the requirements of the CTA.
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    \1\ The CTA is Title LXIV of the William M. (Mac) Thornberry 
National Defense Authorization Act for Fiscal Year 2021, Public Law 
116-283 (2021) (NDAA). The Anti-Money Laundering Act of 2020--which 
includes the CTA--is Division F, sections 6001-6511, of the NDAA.
    \2\ 31 U.S.C. 5336(a)(11)(B)(xxiv).
    \3\ 31 U.S.C. 5318(a)(7).
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    The CTA requires the Secretary to prescribe regulations to 
implement the CTA's reporting requirements. For most reporting 
companies, the CTA authorized the Secretary to allow up to two years 
from the regulation's effective date for reporting companies to file 
their initial BOI reports. The Secretary has delegated these and other 
CTA-implementing responsibilities to FinCEN, a bureau of the Department 
of the Treasury (Treasury).\4\
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    \4\ The Secretary delegated the authority to implement, 
administer, and enforce the BSA and its implementing regulations to 
the Director of FinCEN. See Treasury Order 180-01, paragraph 3(a) 
(Jan. 14, 2020), available at https://home.treasury.gov/about/general-information/orders-and-directives/treasury-order-180-01; see 
also 31 U.S.C. 310(b)(2)(I) (providing that FinCEN Director 
``[a]dminister the requirements of subchapter II of chapter 53 of 
this title, chapter 2 of title I of Public Law 91-508, and section 
21 of the Federal Deposit Insurance Act, to the extent delegated 
such authority by the Secretary'').
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    On September 30, 2022, FinCEN published the Beneficial Ownership 
Information Reporting Requirements final rule (Reporting Rule), 
implementing the CTA's reporting requirements (31 U.S.C. 5336(b)). The 
Reporting Rule became effective on January 1, 2024, and is codified in 
FinCEN's regulations at 31 CFR 1010.380.\5\ Section 1010.380 requires 
certain corporations, limited liability companies, and other similar 
entities (reporting companies) \6\ to report certain identifying 
information about the reporting companies themselves, the beneficial 
owners who own or control them, and, for companies created on or after 
January 1, 2024, the company applicants who form or register them.\7\
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    \5\ FinCEN, Beneficial Ownership Information Reporting 
Requirements, 87 FR 59498 (Sept. 30, 2022). On November 30, 2023, 
FinCEN also issued a final rule amending the Reporting Rule to 
extend the filing deadline for reporting companies created or 
registered in 2024. FinCEN, Beneficial Ownership Information 
Reporting Deadline Extension for Reporting Companies Created or 
Registered in 2024, 88 FR 83499 (Nov. 30, 2023).
    \6\ See 31 U.S.C. 5336(a)(11).
    \7\ See FinCEN, Beneficial Ownership Information Reporting 
Requirements, 87 FR 59498 (Sept. 30, 2022), at 59498-99; 31 CFR 
1010.380(b)(2)(iv).
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    Section 1010.380 previously required domestic reporting companies 
and foreign reporting companies \8\ created or registered to do 
business in the United States before the rule's effective date of 
January 1, 2024, to file initial BOI reports with FinCEN by January 1, 
2025, one year after the effective date of the regulations.\9\ Domestic 
reporting companies created in 2024 and those foreign reporting 
companies registered to do business in the United States in 2024 had 90 
days to file their initial BOI reports with FinCEN.\10\ Starting on 
January 1, 2025, section 1010.380 provided all reporting companies 
created or registered on or after that date with 30 days to file their 
initial reports.
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    \8\ A domestic reporting company was previously defined at 31 
CFR 1010.380(c)(1)(i) as ``a corporation; a limited liability 
company; or other entity that is created by the filing of a document 
with a secretary of state or any similar office under the law of a 
state or Indian tribe.'' A foreign reporting company was defined at 
31 CFR 1010.380(c)(1)(ii) as ``a corporation, limited liability 
company, or other entity that is formed under the law of a foreign 
country and that is registered to do business in the United States 
by the filing of a document with a secretary of state or equivalent 
office under the law of a state or Indian tribe.''
    \9\ 31 CFR 1010.380(a)(1)(iii).
    \10\ FinCEN, Beneficial Ownership Information Reporting Deadline 
Extension for Reporting Companies Created or Registered in 2024, 88 
FR 83499 (Nov. 30, 2023), at 83504.
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    The January 1, 2025, deadline previously established in FinCEN's 
regulations has changed in light of litigation challenging the CTA. In 
two cases, district courts issued universal orders that preliminarily 
enjoined FinCEN from implementing and enforcing the CTA and the 
Reporting Rule or stayed the effective date of section 1010.380 on a 
nationwide basis.\11\ First, on December 3, 2024, in Texas Top Cop 
Shop, Inc. v. Bondi, the U.S. District Court for the Eastern District 
of Texas, Sherman Division, issued an order that preliminarily enjoined 
the government from enforcing the CTA and stayed its implementing 
regulation's reporting deadlines.\12\ The government appealed and 
separately sought a stay of the district court's order

[[Page 13690]]

pending that appeal, and on January 23, 2025, the Supreme Court granted 
a stay pending appeal of that order.\13\ Second, on January 7, 2025, in 
Smith v. U.S. Department of the Treasury, the U.S. District Court for 
the Eastern District of Texas, Tyler Division, issued a similar 
preliminary order that prevented the government from enforcing the CTA 
against the plaintiffs and stayed the effective date of the 
implementing regulation during the pendency of that litigation.\14\ The 
government appealed and sought a stay of this order, which the district 
court granted on February 18, 2025. The district court's stay of its 
order lifted the last remaining nationwide order preventing FinCEN from 
implementing and enforcing the CTA and section 1010.380.
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    \11\ Two other district courts have issued more limited orders 
that enjoined FinCEN from enforcing the CTA against the parties in 
those cases. See Nat'l Small Bus. United v. Yellen, 721 F. Supp. 3d 
1260 (N.D. Ala. 2024); Small Bus. Ass'n of Michigan v. Yellen, No. 
1:24-cv-314, 2025 WL 704287 (W.D. Mich. Mar. 3, 2025). Secretary 
Bessent has automatically been substituted as the defendant in those 
cases.
    \12\ See Texas Top Cop Shop, Inc. v. Garland, No. 4:24-cv-00478, 
2024 WL 4953814 (E.D. Tex. Dec. 3, 2024). Attorney General Bondi has 
automatically been substituted as the defendant in this case.
    \13\ See McHenry v. Texas Top Cop Shop, Inc., 145 S. Ct. 1 
(2025).
    \14\ See Smith v. U.S. Dep't of the Treasury, No. 6:24-cv-00336, 
2025 WL 41924 (E.D. Tex. Jan. 7, 2025).
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    Recognizing that the reporting deadlines set by section 1010.380 
for many companies had already passed while those deadlines were stayed 
by court order and that companies would need additional time to comply, 
FinCEN extended the reporting deadlines for most reporting companies 
until March 21, 2025.\15\ In addition, FinCEN announced that during the 
30-day extension period, it would ``assess its options to further 
modify deadlines, while prioritizing reporting for those entities that 
pose the most significant national security risks.'' \16\ On March 2, 
2025, Treasury announced the suspension of enforcement of the CTA 
against U.S. citizens, domestic reporting companies, and their 
beneficial owners, and Treasury further announced its intent to engage 
in a rulemaking to narrow the Reporting Rule to foreign reporting 
companies only.\17\
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    \15\ See FinCEN Notice, FIN-2025-CTA1, FinCEN Extends Beneficial 
Ownership Information Reporting Deadline by 30 Days; Announces 
Intention to Revise Reporting Rule, (Feb. 18, 2025), available at 
https://www.fincen.gov/sites/default/files/shared/FinCEN-BOI-Notice-Deadline-Extension-508FINAL.pdf.
    \16\ Id.
    \17\ Treasury, Treasury Department Announces Suspension of 
Enforcement of Corporate Transparency Act Against U.S. Citizens and 
Domestic Reporting Companies (Mar. 2, 2025), available at https://home.treasury.gov/news/press-releases/sb0038.
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II. The Interim Final Rule

A. Overview of Rule

    FinCEN is exercising the authority under 31 U.S.C. 
5336(a)(11)(B)(xxiv) to exempt domestic reporting companies from the 
Reporting Rule and the authority under 31 U.S.C. 5318(a)(7) to exempt 
foreign reporting companies from having to report the BOI of any U.S. 
persons who are beneficial owners of the foreign reporting company, as 
well as to exempt U.S. persons from having to provide such information 
to the foreign reporting companies for which they are a beneficial 
owner. Related to the second exemption, FinCEN is also exercising the 
authority under 31 U.S.C. 5318(a)(7) to revise the special rule 
associated with foreign pooled investment vehicles to exempt such 
entities from having to report the BOI of U.S. persons who exercise 
substantial control over the entity.
    First, this interim final rule exempts all domestic reporting 
companies, and their beneficial owners, from the requirement to file 
initial BOI reports, or to update or correct previously filed BOI 
reports, by excluding domestic companies from the scope of the term 
``reporting company,'' pursuant to a determination made by the 
Secretary under 31 U.S.C. 5336(a)(11)(B)(xxiv). The rule text provides 
for this change by redefining the term ``reporting company'' at 31 CFR 
1010.380(c) to remove the previously defined term ``domestic reporting 
company'' at 31 CFR 1010.380(c)(1)(i). By taking this step, any entity 
that meets the definition of the previously defined term ``domestic 
reporting company'' is no longer within the scope of the Reporting 
Rule. Moreover, FinCEN is adding an exemption to the list of exempted 
entities at 31 CFR 1010.380(c)(2). This exemption is applies to ``any 
entity that is: (A) a corporation, limited liability company, or other 
entity; and (B) created by the filing of a document with a secretary of 
state or any similar office under the law of a State or Indian tribe.''
    Second, this interim final rule exempts foreign reporting 
companies, and their U.S. person beneficial owners, from the 
requirement to provide the BOI of any U.S. persons who are beneficial 
owners of the foreign reporting company. The rule text provides for 
this change by adding an exemption at 31 CFR 1010.380(d)(4)(i): 
``Reporting companies are exempt from the requirement in 31 U.S.C. 5336 
and this section to report the beneficial ownership information of any 
U.S. persons who are beneficial owners.'' It also adds an exemption at 
31 CFR 1010.380(d)(4)(ii): ``U.S. persons are exempt from the 
requirements in 31 U.S.C. 5336 and this section to provide beneficial 
ownership information with respect to any reporting company for which 
they are a beneficial owner.'' Foreign reporting companies that only 
have beneficial owners that are U.S. persons will be exempt from the 
requirement to report any beneficial owners.
    Related to the second exemption, this interim final rule revises 
the special rule associated with foreign pooled investment vehicles at 
31 CFR 1010.380(a)(b)(2)(iii) to exempt foreign pooled investment 
vehicles from having to report the BOI of U.S. persons who exercise 
substantial control over the entity. Under the special rule, foreign 
pooled investment vehicles that would be a reporting company but for 
the exemption at 31 CFR 1010.380(c)(2)(xviii), and are formed under the 
laws of a foreign country, are required to report beneficial ownership 
information solely with respect to an individual who exercises 
substantial control over the entity. If more than one individual 
exercises substantial control over the entity, the entity is required 
to report information with respect to the individual who has the 
greatest authority over the strategic management of the entity. FinCEN 
has revised the rule text such that foreign pooled investment vehicles 
must report the BOI of an individual who exercises substantial control 
over the entity if that individual is not a U.S. person. If more than 
one individual exercises substantial control over the entity and at 
least one of those individuals is not a U.S. person, the entity must 
report information with respect to the individual who is not a U.S. 
person who has the greatest authority over the strategic management of 
the entity. If there is no individual with substantial control who is 
not a U.S. person, the foreign pooled investment vehicle is not 
required to report any beneficial owners.
    This interim final rule otherwise retains the requirement for 
foreign reporting companies, and their beneficial owners (excluding 
U.S. persons), to report their BOI to FinCEN, while extending the 
deadline for those companies to file initial BOI reports, or update or 
correct previously filed BOI reports, to 30 days after the date of this 
publication or 30 days after their registration to do business in the 
United States, whichever comes later.
    FinCEN is accepting comments on this interim final rule. FinCEN 
will assess the exemptions, as appropriate, in light of those comments 
and intends to issue a final rule this year.

B. Exempting Domestic Companies

    The CTA recognizes that BOI reporting requirements impose burdens 
on businesses. The CTA therefore directs the Secretary to ``minimize 
burdens on reporting companies associated with the collection of the

[[Page 13691]]

information . . . in light of the private compliance costs placed on 
legitimate businesses.'' \18\ The CTA also authorizes the Secretary to 
exempt from the reporting requirements ``any entity or class of 
entities'' if the Secretary, with the written concurrence of the 
Attorney General and the Secretary of Homeland Security, determines 
that ``requiring beneficial ownership information from the entity or 
class of entities . . . would not serve the public interest'' and 
``would not be highly useful in national security, intelligence, and 
law enforcement agency efforts to detect, prevent, or prosecute money 
laundering, the financing of terrorism, proliferation finance, serious 
tax fraud, or other crimes.'' \19\
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    \18\ See 31 U.S.C. 5336(b)(1)(F)(iii).
    \19\ See id., at (b)(1)(A)(xxiv).
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    In issuing the Reporting Rule, FinCEN estimated the burdens imposed 
on businesses. FinCEN estimated the total aggregate labor costs for 
reporting companies filing initial BOI reports in the first year of the 
Reporting Rule to be $21.7 billion and for reporting companies filing 
initial BOI in future years to be $3.3 billion annually.\20\ FinCEN 
estimated the total aggregate labor costs for reporting companies 
filing updated BOI reports in the first year to be $1.0 billion and in 
future years to be $2.3 billion.\21\ Estimates for the five-year 
average cost were $6.9 billion for initial reports and $2.0 billion for 
updated reports.\22\ FinCEN also noted that many comments stated that 
``the proposed reporting requirements are excessively onerous'' and 
``focused on how the proposed reporting requirements might negatively 
affect small businesses.'' \23\ FinCEN further noted that multiple 
comments stated that ``costs to comply with the proposed reporting 
requirements would hurt small businesses during financially difficult 
times.'' \24\ While explaining that it ``is sensitive to concerns from 
small businesses about having to comply with a new set of regulations, 
and has endeavored to minimize unnecessary compliance burdens,'' FinCEN 
recognized that achieving the CTA's goal of collecting information that 
is ``highly useful'' while ``minimiz[ing] burden on reporting 
companies'' requires a ``delicate balance.'' \25\
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    \20\ FinCEN, Beneficial Ownership Information Reporting 
Requirements, 87 FR 59498 (Sept. 30, 2022), at 59490.
    \21\ Id.
    \22\ Id.
    \23\ Id. at 59550.
    \24\ Id.
    \25\ Id.
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    On January 20, 2025, there was a change in presidential 
administrations, which has resulted in a reassessment of the balance 
struck by the Reporting Rule. On January 31, 2025, President Trump 
issued Executive Order (E.O.) 14192, Unleashing Prosperity Through 
Deregulation, which announced an Administration policy ``to 
significantly reduce the private expenditures required to comply with 
Federal regulations to secure America's economic prosperity and 
national security and the highest possible quality of life for each 
citizen'' and ``to alleviate unnecessary regulatory burdens placed on 
the American people.'' Consistent with the exemptive authority provided 
in the CTA and the direction of the President, the Secretary has 
reassessed the balance between the usefulness of collecting BOI and the 
regulatory burdens imposed by the scope of the Reporting Rule.
    The Secretary, with the written concurrence of the Attorney General 
and the Secretary of Homeland Security, has determined for purposes of 
this interim final rule that the reporting of BOI by domestic reporting 
companies and their beneficial owners ``would not serve the public 
interest'' and ``would not be highly useful in national security, 
intelligence, and law enforcement agency efforts to detect, prevent, or 
prosecute money laundering, the financing of terrorism, proliferation 
finance, serious tax fraud, or other crimes.'' The Secretary is aware 
that most domestic reporting companies that are not already covered by 
a statutory exemption are small businesses and that any regulations 
affecting them must recognize this fact. As the preamble to the 
Reporting Rule states, ``[s]mall businesses are a backbone of the U.S. 
economy, accounting for a large share of U.S. economic activity, and 
driving U.S. innovation and competition.'' The vast majority of 
domestic small businesses are legitimate and owned by hard-working 
American taxpayers who are not engaged in illicit activity. The 
Secretary has assessed that exempting them would ensure that the 
Reporting Rule is appropriately tailored to advance the public 
interest, considering the burdens imposed by the regulations without 
sufficient benefits. The Attorney General and the Secretary of Homeland 
Security have concurred that collecting BOI from domestic reporting 
companies would not be ``highly useful in national security, 
intelligence, and law enforcement agency efforts.'' The Secretary's 
determination is also consistent with the direction of the President, 
including as set forth in E.O. 14192, Unleashing Prosperity Through 
Deregulation.
    In conducting this reassessment, the Secretary has considered that 
failure to require BOI reporting by domestic reporting companies could 
result in illicit finance risks, as Treasury has acknowledged. For 
example, the preamble to the Reporting Rule noted that Treasury's 2022 
National Money Laundering Risk Assessments identified lack of timely 
access to BOI as a key weakness within the U.S. anti-money laundering/
countering the financing of terrorism (AML/CFT) regulatory regime.\26\ 
The preamble to the Reporting Rule also noted that while FinCEN's 2016 
customer due diligence rule increased transparency by requiring covered 
financial institutions to collect a legal entity customer's BOI at the 
time of an account opening,\27\ it did not address the collection of 
BOI at the time of a legal entity's creation, and BOI collected at the 
time of a legal entity's creation provides additional insight into the 
original beneficial owners of the entity.\28\ The Secretary has taken 
illicit finance risks into account in considering the usefulness of 
collecting BOI, the burdens such collection imposes on the public, and 
the public interest. Additionally, the Secretary has considered 
alternative sources of information to mitigate risks. For example, the 
continuing requirement for covered financial institutions to collect a 
legal entity customer's BOI at the time of account opening will serve 
to mitigate certain illicit finance risks associated with exempting 
domestic reporting companies from reporting their BOI.
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    \26\ FinCEN, Beneficial Ownership Information Reporting 
Requirements, 87 FR 59498 (Sept. 30, 2022), at 59506.
    \27\ FinCEN, Customer Due Diligence Requirements for Financial 
Institutions, 81 FR 29398 (May 11, 2016) (codified in relevant part 
at 31 CFR 1010.230).
    \28\ FinCEN, Beneficial Ownership Information Reporting 
Requirements, 87 FR 59498 (Sept. 30, 2022), at 59502.
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    Consistent with 31 U.S.C. 5336(a)(11)(B)(xxiv), and after 
conferring with the Department of Justice and the Department of 
Homeland Security and receiving written concurrences from the Attorney 
General and the Secretary of Homeland Security, the Secretary has 
directed FinCEN to issue this interim final rule exempting domestic 
reporting companies and their beneficial owners from the reporting 
requirements imposed through the Reporting Rule. The Secretary has also 
directed FinCEN to solicit comments on the approach taken in this 
interim final rule; the Secretary and FinCEN will assess this 
exemption, as appropriate, in

[[Page 13692]]

light of those comments, and FinCEN intends to issue a final rule this 
year.

C. Reporting by Foreign Reporting Companies

    Foreign reporting companies, however, present heightened national 
security and illicit finance risks and different concerns about 
regulatory burdens. Congress, through certain provisions in the CTA, 
recognized these heightened concerns about national security and 
illicit finance risks posed by foreign ownership or foreign control of 
reporting companies. Congress thus limited certain CTA exemptions to 
companies that are exclusively domestic. For example, the CTA requires 
that an entity be a ``United States person'' and be ``beneficially 
owned or controlled exclusively by 1 or more United States persons that 
are United States citizens or lawfully admitted for permanent 
residence'' to qualify for the BOI reporting exemption for entities 
assisting a tax-exempt entity, 31 U.S.C. 5336(a)(11)(B)(xx). In 
addition, the CTA states that the inactive entity reporting exemption, 
31 U.S.C. 5336(a)(11)(B)(xxiii), is available only if an entity is not 
``owned by a foreign person, whether directly or indirectly, wholly or 
partially.'' These exemptions reflect Congress's intent to establish 
narrow, zero-threshold bars for foreign-owned or foreign-controlled 
entities, given heightened risks posed by companies with foreign 
ownership or control.
    Throughout the rulemaking process implementing the CTA's reporting 
requirements, FinCEN has emphasized the risks of foreign illicit actors 
accessing the U.S. financial system through the use of legal entities 
created in foreign jurisdictions but registered to do business in the 
United States. For example, FinCEN noted that ``[c]orrupt foreign 
officials, sanctions evaders, and narco-traffickers, among others, 
exploit the current gap in the U.S. BOI reporting regime to park their 
ill-gotten gains in a stable jurisdiction, thereby exposing the United 
States to serious national security threats.'' \29\ FinCEN highlighted 
specific examples of significant criminal investigations into the use 
of shell companies throughout the world to launder money or evade 
sanctions imposed by the United States, including sanctions evasion by 
Iran through shell companies abroad.
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    \29\ See, e.g., FinCEN, Notice of Proposed Rulemaking, 
Beneficial Ownership Information Reporting Requirements, 86 FR 
69920, 69928 (Dec. 8, 2021).
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    Furthermore, on February 4, 2025, President Trump issued a National 
Security Presidential Memorandum (NSPM) addressing Iranian ``behavior 
[that] threatens the national interest of the United States.'' \30\ 
This NSPM directs the Secretary to:
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    \30\ White House, National Security Presidential Memorandum/
NSPM-2 (Feb. 4, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/02/national-security-presidential-memorandum-nspm-2/.

maintain countermeasures against Iran at the Financial Action Task 
Force, evaluate beneficial ownership thresholds to ensure sanctions 
deny Iran all possible illicit revenue, and evaluate whether 
financial institutions should adopt a ``Know Your Customer's 
Customer'' standard for Iran-related transactions to further prevent 
sanctions evasion.\31\
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    \31\ Id.

    Requiring BOI reporting by foreign reporting companies is 
consistent with the actions regarding beneficial ownership that this 
NSPM directs the Secretary to take to address the national security 
threat arising from Iran.
    The Financial Action Task Force (FATF) \32\ Report on the 
Concealment of Beneficial Ownership has also found that shell companies 
can be used in complex structures involving the distribution of assets 
across multiple companies in multiple jurisdictions. When these 
structures are used for illicit purposes, money may flow through 
multiple layers of shell companies before finally being withdrawn in 
cash or transferred to its final destination internationally. Of the 
cases analyzed by FATF that included shell companies, the majority 
included a corporation located in a foreign jurisdiction.\33\ Foreign 
companies registered to do business in the United States therefore pose 
a heightened risk to U.S. national security.
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    \32\ The FATF, of which the United States is a founding member, 
is an international, inter-governmental task force whose purpose is 
the development and promotion of international AML/CFT standards and 
the effective implementation of legal, regulatory, and operational 
measures to combat money laundering, terrorist financing, the 
financing of proliferation, and other related threats to the 
integrity of the international financial system. The FATF assesses 
over 200 jurisdictions against its minimum standards, known as FATF 
Recommendations.
    \33\ FATF, 2018 Concealment of Beneficial Ownership (July 2018), 
p. 29, available at https://www.fatf-gafi.org/content/dam/fatf-gafi/reports/FATF-Egmont-Concealment-beneficial-ownership.pdf.coredownload.pdf.
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    At the same time, foreign companies present fewer concerns 
regarding regulatory burdens that would not serve the public interest. 
Foreign companies are subject to the Reporting Rule only if they 
register to do business in the United States, thereby already filing a 
document in the United States. Moreover, E.O. 14192 announces a policy 
``to alleviate unnecessary regulatory burdens placed on the American 
people.'' The policy direction to minimize regulatory burdens placed on 
the American people can be achieved by exempting foreign reporting 
companies from having to report the BOI of any U.S. persons who are 
beneficial owners of the foreign reporting company.
    Consistent with the CTA's stated purposes, the CTA's exclusion of 
foreign reporting companies from certain other exemptions, the risks 
identified above, and the relative burdens, the Secretary has 
determined that exempting foreign companies would not serve the public 
interest. FinCEN is therefore continuing to require foreign reporting 
companies to report their BOI, except with respect to U.S. person 
beneficial owners. Foreign reporting companies that only have 
beneficial owners that are U.S. persons will be exempt from the 
requirement to report any beneficial owners.
    The Secretary has determined for purposes of this interim final 
rule that it would be appropriate to exempt U.S. persons from having to 
provide BOI and, accordingly, to exempt foreign reporting companies 
from having to report the BOI of any U.S. persons who are beneficial 
owners of a foreign reporting company. The Secretary has assessed that 
exempting U.S. persons' BOI would ensure that the Reporting Rule is 
appropriately tailored to advance the public interest, considering the 
burdens imposed by the regulations without sufficient benefits. The 
Secretary's determination is also consistent with the direction of the 
President, including as set forth in E.O. 14192, Unleashing Prosperity 
Through Deregulation. In making this determination, the Secretary has 
considered that exempting reporting companies from reporting U.S. 
persons' BOI could result in risks of evasion or illicit finance risks.
    Consistent with 31 U.S.C. 5318(a)(7), the Secretary has therefore 
directed FinCEN to issue this interim final rule exempting foreign 
reporting companies from having to report the BOI of any U.S. persons 
who are beneficial owners of a foreign reporting company. The Secretary 
has also directed FinCEN to solicit comments on the approach taken in 
this interim final rule; the Secretary and FinCEN will assess this 
exemption, as appropriate, in light of those comments, and FinCEN 
intends to issue a final rule this year. In addition, FinCEN has 
decided to provide foreign companies with an additional 30 days to 
comply with the reporting requirements, recognizing that the reporting 
deadlines

[[Page 13693]]

had been stayed by court order and were then extended by FinCEN, and 
that foreign companies will need advance notice of the new deadline.

III. Basis for Issuing an Interim Final Rule

    FinCEN has determined that an interim final rule is the appropriate 
mechanism to exempt domestic reporting companies and U.S. persons who 
are beneficial owners of foreign reporting companies from the BOI 
reporting requirements pending the receipt of comments and issuance of 
a final rule. This approach accommodates both the Secretary's direction 
and principles of public participation in regulatory action.
    First, FinCEN finds that, to the extent that prior notice and 
solicitation of public comment would otherwise be required, the need to 
expeditiously exempt domestic reporting companies and U.S. persons who 
are beneficial owners of foreign reporting companies satisfies the 
``good cause'' exception in 5 U.S.C. 553(b)(B). The Administrative 
Procedure Act (APA) authorizes agencies to issue regulations without 
notice and public comment when an agency finds, for good cause, that 
notice and comment is ``impracticable, unnecessary, or contrary to the 
public interest,'' 5 U.S.C. 553(b)(B). Reporting companies and their 
beneficial owners were, under existing regulations, required to comply 
with the BOI reporting requirements by January 1, 2025. Now, in 
response to developments in ongoing litigation, they currently face a 
March 21, 2025, deadline to comply with BOI reporting requirements. The 
purpose of this rule is to exempt domestic reporting companies and U.S. 
persons who are beneficial owners of foreign reporting companies from 
those requirements. Although public comment will be solicited and a 
final rule will be issued this year, soliciting public comment before 
providing the exemptions would be impractical, as FinCEN could not--and 
would not have been able to--provide notice, solicit public comments, 
and review those comments before the March 21, 2025, deadline. 
Providing prior public notice would therefore subject domestic 
reporting companies and U.S. persons who are beneficial owners of 
foreign reporting companies to compliance costs during the pendency of 
this rulemaking that could ultimately prove unnecessary when the rule 
is finalized, which would frustrate the purpose of this rule.
    However, this rulemaking still accommodates the principles of 
public participation because the Secretary and FinCEN intend to review 
the public comments, assess the exemptions, as appropriate, in light of 
those comments, and issue a final rule this year, within the existing 
statutory period that the CTA affords for FinCEN to set reporting 
deadlines. The CTA provides FinCEN discretion to extend the BOI 
reporting deadlines for most reporting companies until two years after 
the January 1, 2024, effective date of the Reporting Rule--as far out 
as January 1, 2026.\34\ The exemption for domestic reporting companies 
provided in this interim final rule therefore serves to suspend any 
reporting requirements within this statutorily authorized period while 
the rule is finalized during that period. This suspension must be 
effective immediately to prevent companies from being required to 
report before a final rule is issued.
---------------------------------------------------------------------------

    \34\ See 31 U.S.C. 5336(b)(1)(B).
---------------------------------------------------------------------------

    In addition, FinCEN finds that prior notice and public comment are 
unnecessary because this interim final rule does not impose new 
burdens, but rather exempts domestic reporting companies and U.S. 
persons who are beneficial owners of foreign reporting companies from 
reporting requirements.
    Finally, FinCEN finds that proceeding through an interim final rule 
will most appropriately address the public confusion about the 
Reporting Rule's deadlines that has arisen because the Reporting Rule's 
deadlines had been stayed by court order when they originally passed. 
FinCEN thus determines that the most appropriate mechanism to provide 
for the exemptions just discussed pending issuance of a final rule in 
light of the pressing deadline, to avoid imposing immediate compliance 
costs on domestic reporting companies and U.S. persons in contradiction 
to the rule's purpose, and to minimize and expeditiously resolve this 
period of confusion, while still allowing for public participation, is 
this interim final rule providing for 60 days for public comment 
thereafter.
    FinCEN invites interested parties to submit comments on the issues 
raised in this interim final rule within 60 days of its publication to 
the extent that public comment is needed to inform whether domestic 
reporting companies and U.S. persons who are beneficial owners of 
foreign reporting companies should be exempted from the BOI reporting 
requirements. Comments submitted in response to this interim final rule 
will be considered and addressed when a final rule, with changes if 
warranted, is issued.

IV. Effective Date

    This rule does not impose any new obligations, but rather exempts 
domestic reporting companies and U.S. persons who are beneficial owners 
of foreign reporting companies from the Reporting Rule requirements, 
and it relaxes the deadlines for reporting obligations for foreign 
reporting companies. Thus, this rule may be immediately effective under 
5 U.S.C. 553(d)(1) as a ``substantive rule which grants or recognizes 
an exemption or relieves a restriction.'' For the same reason, a 
delayed effective date is unnecessary: because this interim final rule 
exempts domestic reporting companies and U.S. persons who are 
beneficial owners of foreign reporting companies from the Reporting 
Rule requirements, rather than imposes obligations, the public does not 
need time to prepare to comply with it. Moreover, as explained in 
Section III, delaying the effective date of this rule would be 
impractical and unnecessary. FinCEN therefore finds good cause for 
making this rule effective immediately upon publication in the Federal 
Register, as permitted by 5 U.S.C. 553(d)(3).

V. Compliance With Other Authorities

A. Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, and public health and 
safety effects; distributive impacts; and equity). Executive Order 
13563 emphasizes the importance of quantifying both costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility. It has 
been determined that this regulation is an economically significant 
regulatory action as defined in section 3(f)(1) of Executive Order 
12866. Accordingly, this interim final rule has been reviewed by OMB.
    As discussed above, FinCEN remains mindful of the ``delicate 
balance'' \35\ that exists between the anticipated benefits and the 
costs imposed by requirements to report BOI. In promulgating this 
interim final rule, FinCEN anticipates certain changes, of varying 
magnitude, to both expected benefits and costs--with some easier to 
quantify than others. Each are discussed in turn below.
---------------------------------------------------------------------------

    \35\ See supra note 25.
---------------------------------------------------------------------------

    FinCEN further notes that, because portions of its regulatory 
impact

[[Page 13694]]

analysis consider economic benefits and costs across the various 
parties it can reasonably expect to be affected by the rule,\36\ 
whereas other portions limit the analysis of costs incurred to specific 
regulatory stakeholders,\37\ certain differences in the accounting 
treatment of costs may arise.\38\ Where relevant to the analysis, the 
discussion below makes note of the distinctions in treatment of costs.
---------------------------------------------------------------------------

    \36\ See, e.g., Sections V.A and C.
    \37\ See, e.g., infra Section V.D.
    \38\ For example, to the extent that the costs to collect BOI 
that would have been borne by a reporting company would be foregone, 
but the information would nevertheless need to be collected for 
business purposes (such as the opening of a bank account or other 
covered financial transaction) the cost of information production 
would only decrease, in an economic sense, if the party completing 
the work instead can do so at lower cost than the originally 
assigned party.
---------------------------------------------------------------------------

1. Anticipated Changes to Expected Benefits
    FinCEN has historically considered the benefits of BOI reporting to 
a variety of affected parties, including law enforcement, other users 
of BOI data, and the general macroeconomy,\39\ and has taken into 
consideration the extent to which benefits may change as a consequence 
of the interim final rule's reduction in scope.\40\
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    \39\ See FinCEN, Beneficial Ownership Information Reporting 
Requirements, 87 FR 59498 (Sept. 30, 2022); see also FinCEN, Notice 
of Proposed Rulemaking, Beneficial Ownership Information Access and 
Safeguards, and Use of FinCEN Identifiers for Entities, 87 FR 77404, 
77425 (Dec. 16, 2022).
    \40\ To the extent that certain parties would have incurred 
direct costs in connection with reporting their BOI and would no 
longer be required to do so under the interim final rule, the 
estimated value of this private benefit is not treated as benefit of 
the IFR, but is included in the discussion of changes to expected 
costs below and further described in Section V.D.
---------------------------------------------------------------------------

    FinCEN acknowledges that, while more intelligence might be 
collected in the absence of this deregulatory effort, it is unclear 
that the marginal benefits of the BOI that will no longer be reported 
would be comparable to the value of similar entities to which the 
reporting requirements still apply. As FinCEN has not yet been able to 
conduct the kinds of robust quantitative analysis necessary to estimate 
the incremental value of such intelligence, it recognizes that its 
estimated values to date have been partially speculative, albeit 
informed by feedback from both domestic and international partners in 
law enforcement and national security.
    FinCEN anticipates that other parties may experience reduced 
benefits as a consequence of the change in scope. This would include 
parties, such as financial institutions and other affected parties \41\ 
whose access to BOI data would consequently provide information about 
fewer legal entities. The extent to which reducing the scope of 
reporting companies would reduce the benefits of access to BOI data 
would, to some extent, depend on the relative informational value of 
the companies that would be newly exempt from reporting versus the 
informational value that would continue to be reported. Similarly, the 
reduction in expected benefits may, in some cases, be attenuated by the 
availability of alternative sources of similar beneficial ownership 
information (e.g., commercially available information) to the extent 
that such sources can be treated as substitutes as opposed to 
complements.\42\ FinCEN invites comments, particularly those including 
data, descriptions of costs and business practices, and studies, that 
would facilitate quantitative estimates of these economic benefits.
---------------------------------------------------------------------------

    \41\ See FinCEN, Notice of Proposed Rulemaking, Beneficial 
Ownership Information Access and Safeguards, and Use of FinCEN 
Identifiers for Entities, 87 FR 77404, 77425 (Dec. 16, 2022).
    \42\ The Reporting Rule did not provide an estimate of the 
relative value of alternative sources relative to the BOI data 
required to be reported by the Reporting Rule.
---------------------------------------------------------------------------

2. Anticipated Changes to Expected Costs
    By reducing the number of companies that would be required to 
report their BOI to FinCEN, the corresponding costs associated with 
original reports, associated applications for FinCEN identifiers (both 
company and personal), and subsequent revisions or updates would be 
significantly reduced. FinCEN expects the primary value of the 
modification in scope provided by this interim final rule to be 
realized in the form of reduced costs.
    As noted above, the expected costs of the rule originally included, 
but were not limited to: $21.7 billion in initial reporting costs in 
year 1 ($3.3 billion annually on average in each subsequent year) and 
$1.0 billion in year 1 updating costs ($2.3 billion expected to be 
incurred for similar activities in each subsequent year). 
Correspondingly, estimates for the five-year average cost per year were 
$6,996,732,512 for initial reports and $2,033,391,518 for updated 
reports. Because these costs applied a different framework under which 
pro forma accounting costs were expected to accrue, it is therefore 
necessary for FinCEN to account for the sunk costs of companies that 
have already reported their BOI when estimating the expected reduction 
in future costs. Based on calendar year 2024 data, FinCEN estimates 
that approximately 40 percent of expected year 1 costs have already 
accrued; therefore, the maximum reduction in costs that the interim 
final rule would enable is approximately $13.6 billion associated with 
first year activities of coming into reporting compliance. On a going-
forward basis, FinCEN estimates that, on average the costs associated 
with the interim final rule would be approximately $9 billion lower per 
year.\43\
---------------------------------------------------------------------------

    \43\ See Section V.D.
---------------------------------------------------------------------------

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), Public Law 96-354, applies 
only to rules for which an agency publishes a general notice of 
proposed rulemaking (NPRM) pursuant to 5 U.S.C. 553(b).\44\ This rule 
is being immediately published as an interim final rule; it was not 
preceded by an NPRM. Therefore, the RFA does not apply to it.
---------------------------------------------------------------------------

    \44\ See generally 5 U.S.C. 601 et seq.
---------------------------------------------------------------------------

    Furthermore, because this rule exempts legal entities that would 
otherwise have been domestic reporting companies and U.S. persons who 
otherwise would have been required to report BOI, the compliance 
burdens originally estimated in connection with BOI reporting 
requirements will no longer apply to a substantial number of U.S. 
businesses \45\ or to certain U.S. persons in their individual 
capacities as beneficial owners of foreign reporting companies. The RFA 
would not apply to regulatory burdens incurred in this capacity.\46\
---------------------------------------------------------------------------

    \45\ RFA analysis is only required if a regulation meets both of 
two criteria: (1) the impact of the rule must be economically 
significant; and (2) the rule must affect a substantial number of 
small U.S. entities.
    \46\ The RFA applies to regulatory effects on only three types 
of entities: (1) small businesses; (2) small nonprofits; and (3) 
small governmental jurisdictions. Individuals impacted in their 
capacity as natural persons are not included in these categories.
---------------------------------------------------------------------------

C. Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA), 
Public Law 104-4, requires that an agency prepare a budgetary impact 
statement before promulgating a rule that includes a Federal mandate 
that may result in new, incremental expenditures by State, local, and 
Tribal governments, in the aggregate, or by the private sector, of $184 
million or more in any one year.\47\ FinCEN has

[[Page 13695]]

determined that this rule will not result in increased expenditures by 
State, local, and Tribal governments, or by the private sector, of $184 
million or more. Accordingly, FinCEN has not prepared a budgetary 
impact statement or specifically addressed regulatory alternatives.
---------------------------------------------------------------------------

    \47\ The U.S. Bureau of Economic Analysis reported the annual 
value of the gross domestic product deflator in 1995 (the year in 
which UMRA was enacted) as 66.939; and in 2023 as 123.273. See U.S. 
Bureau of Economic Analysis, ``Table 1.1.9. Implicit Price Deflators 
for Gross Domestic Product'' (accessed Sept. 16, 2024). Thus, the 
inflation adjusted estimate for $100 million is 123.273 divided by 
66.939 and then multiplied by 100, or $184.157 million.
---------------------------------------------------------------------------

D. Paperwork Reduction Act

    The provisions of the Paperwork Reduction Act of 1995 (PRA), Public 
Law 104-13, and its implementing regulations imposes certain 
requirements on federal agencies in connection with their conducting or 
sponsoring any collection of information as defined by the PRA. Under 
the PRA, an agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless it displays 
a valid OMB control number.\48\
---------------------------------------------------------------------------

    \48\ 44 U.S.C. Chapter 35; 5 CFR part 1320.
---------------------------------------------------------------------------

    The reporting requirements contained in the Reporting Rule were 
approved by OMB in accordance with the PRA under OMB control number 
1506-0076. In this interim final rule, FinCEN is exercising the 
authority under 31 U.S.C. 5336(a)(11)(B)(xxiv) to exempt domestic 
reporting companies from BOI reporting requirements and the authority 
under 31 U.S.C. 5318(a)(7) to exempt foreign reporting companies from 
having to report the BOI of any U.S. persons who are beneficial owners 
of the foreign reporting company, as well as to exempt U.S. persons 
from having to provide such information to the foreign reporting 
companies for which they are a beneficial owners. Related to the second 
exemption, FinCEN is also exercising the authority under 31 U.S.C. 
5318(a)(7) to revise the special rule associated with foreign pooled 
investment vehicles to exempt such entities from having to report the 
BOI of U.S. persons who exercise substantial control over the entity.
    FinCEN has revised estimates for the reporting requirements in the 
Reporting Rule based on the changes made by this interim final rule.
1. BOI Reports
    OMB Control Number: 1506-0076.
    Reporting Requirements: In accordance with the CTA, the rule 
retains a reporting requirement on foreign reporting companies to file 
with FinCEN reports that identify the entities' beneficial owners, and 
in certain cases their company applicants.\49\ The report must also 
contain information about the entity itself. The reporting company must 
certify that the report is true, correct, and complete. The rule also 
continues to require foreign reporting companies to update the 
information in these reports as needed, and correct any previous 
incorrectly reported information, within specific timeframes. The 
collected information will be maintained by FinCEN and made accessible 
to authorized users.
---------------------------------------------------------------------------

    \49\ 31 U.S.C. 5336(b); 31 CFR 1010.380(b).
---------------------------------------------------------------------------

    Frequency: As required.\50\
---------------------------------------------------------------------------

    \50\ For BOI reports, there is an initial filing and subsequent 
filings; the latter are required as information changes or if 
previously reported information was incorrect.
---------------------------------------------------------------------------

    Description of Affected Public: Entities that are: (1) 
corporations, limited liability companies, or other entities; (2) 
formed under the law of a foreign country; and (3) registered to do 
business in any State or Tribal jurisdiction by the filing of a 
document with a secretary of state or any similar office under the laws 
of a State or Indian tribe. The rule does not require corporations, 
limited liability companies, or other entities that are described in 
any of 24 specific exemptions to file BOI reports.
    Estimated Number of Respondents: 11,667 reporting companies per 
year, on average.\51\
---------------------------------------------------------------------------

    \51\ This estimate is based on a three-year average that assumes 
all reporting companies that were previously expected to have a 
reporting obligation, and would retain an obligation under the 
interim final rule, but did not already file a BOIR with FinCEN in 
calendar year 2024 (approximately 0.6 percent of the total original 
population, or 20,000 reporting companies) would come into 
compliance in year one and that approximately 5,000 new reporting 
companies would file their first report in each of years one through 
three.
---------------------------------------------------------------------------

    Estimated Time per Respondent: As discussed in the Reporting Rule, 
the time burden for filing initial BOI reports will vary depending on 
the complexity of the reporting company's structure. FinCEN therefore 
estimates a range of time burden associated with filing an initial BOI 
report to account for the likely variance among reporting companies. 
FinCEN estimates the average burden of reporting BOI as 90 minutes per 
response for reporting companies with simple beneficial ownership 
structures (40 minutes to read the form and understand the requirement, 
30 minutes to identify and collect information about beneficial owners 
and company applicants, 20 minutes to fill out and file the report, 
including attaching an image of an acceptable identification document 
for each beneficial owner and company applicant). FinCEN estimates the 
average burden of reporting BOI as 650 minutes per response for 
reporting companies with complex beneficial ownership structures (300 
minutes to read the form and understand the requirement, 240 minutes to 
identify and collect information about beneficial owners and company 
applicants, 110 minutes to fill out and file the report, including 
attaching an image of an acceptable identification document for each 
beneficial owner and company applicant). FinCEN estimates the average 
burden of updating such reports for reporting companies with simple 
beneficial ownership structures as 40 minutes per update (20 minutes to 
identify and collect information about beneficial owners or company 
applicants and 20 minutes to fill out and file the update). FinCEN 
estimates the average burden of updating such reports for reporting 
companies with complex beneficial ownership structures as 170 minutes 
per update (60 minutes to identify and collect information about 
beneficial owners or company applicants and 110 minutes to fill out and 
file the update). FinCEN also assesses that reporting companies with 
intermediate beneficial ownership structures will have a time burden 
that is the average of the time burden for reporting companies with 
simple and complex structures.
    Estimated Aggregate Reporting Burden Hours: 51,569 hours per year, 
on average.
    FinCEN estimates that during Year 1, the filing of initial BOI 
reports will result in approximately 91,050 burden hours for reporting 
companies. In Year 2 and beyond, FinCEN estimates that the filing of 
initial BOI reports will result in 18,210 burden hours annually for new 
reporting companies. The three-year average of burden hours for initial 
BOI reports is 42,490 hours. FinCEN estimates that filing BOI updated 
reports in Year 1 would result in approximately 5,814 burden hours for 
reporting companies. In Year 2 and beyond, the estimated number of 
burden hours is 10,711. The three-year average of burden hours for 
updated BOI reports is 9,079 hours. The total three-year average of 
burden hours for BOI reports is 51,569.
    Estimated Aggregate Reporting Cost: $20,735,713.46 per year, on 
average.
    FinCEN estimated a range of costs associated with filing an initial 
BOI report to account for the likely variance among reporting 
companies. FinCEN estimates the average cost of filing an initial BOI 
report per reporting company to be a range of $82.06-$2,592.67. FinCEN 
estimates the average cost of filing an updated BOI report per 
reporting company to be $36.47-$155.01.

[[Page 13696]]

    For initial BOI reports, the range of total costs in Year 1, 
assuming for the lower bound that all reporting companies are simple 
structures and assuming for the upper bound that all reporting 
companies are complex structures, is $2.5 million-$64.8 million. 
Applying the distribution of reporting companies' structure explained 
in connection with Table 1 of the original rule, FinCEN calculates 
total costs in Year 1 of initial BOI reports to be $16.4 million. In 
Year 2 and onwards, in which FinCEN assumes that initial BOI reports 
will be filed by newly created entities, the range of total costs is 
$410 thousand-$12.9 million annually. Applying the reporting companies' 
structure distribution explained in the original rule, the estimated 
total cost of initial BOI reports annually in Year 2 and onwards is 
$22.1 million.
    For updated BOI reports, the range of total costs in Year 1, 
assuming for the lower bound that all reporting companies are simple 
structures and assuming for the upper bound that all reporting 
companies are complex structures is $173 thousand-$736 thousand. 
Applying the distribution of reporting companies' structure, FinCEN 
calculates total costs in Year 1 of updated BOI reports to be $318 
thousand. In Year 2 and onwards, the range of total costs is $319 
thousand-$1.35 million annually. Applying the reporting companies' 
structure distribution, the estimated total cost of updated BOI reports 
annually in Year 2 and onwards is $585 thousand. The three-year average 
cost for initial reports is $20,239,042 and $496,672 for updated 
reports.
    There are no non-labor costs associated with these collections of 
information because FinCEN assumes that reporting companies already 
have the necessary equipment and tools to comply with the regulatory 
requirements.
2. Individual FinCEN Identifiers
    OMB Control Number: 1506-0076.
    Reporting Requirements: The rule continues to require the 
collection of information from individuals in order to issue them a 
FinCEN identifier.\52\ This is a voluntary collection. The rule 
requires individuals to report to FinCEN certain information about 
themselves to receive a FinCEN identifier, in accordance with the 
CTA.\53\ An individual is also required to submit updates of their 
identifying information as needed. FinCEN stores such information in 
its BOI database for access by authorized users.
---------------------------------------------------------------------------

    \52\ FinCEN is not separately calculating a cost estimate for 
entities requesting a FinCEN identifier because FinCEN assumes this 
would already be accounted for in the process and cost of submitting 
the BOI reports.
    \53\ 31 U.S.C. 5336(b)(3)(A)(i); 31 CFR 1010.380(b)(4).
---------------------------------------------------------------------------

    Frequency: As required.
    Description of Affected Public: Individuals associated with foreign 
reporting companies that elect to request an identifier independent of 
the FinCEN identifier requested by the associated company as part of 
its BOIR submission.
    For individuals requesting FinCEN identifiers, FinCEN acknowledges 
that anyone who meets the statutory criteria could apply for a FinCEN 
identifier under the rule. However, the primary incentives for 
individual beneficial owners to apply for a FinCEN identifier are 
likely data security (an individual may see less risk in submitting 
personal identifiable information to FinCEN directly and exclusively 
than doing so indirectly through one or more individuals at one or more 
foreign reporting companies) and administrative efficiency (where an 
individual is likely to be identified as a beneficial owner of numerous 
foreign reporting companies). Company applicants that are responsible 
for registering many foreign reporting companies may have a similar 
incentive to request a FinCEN identifier in order to limit the number 
of companies with access to their personal information. This reasoning 
assumes that there is a one-to-many relationship between the company 
applicant and foreign reporting companies.
    Estimated Number of Respondents: 123,733 filers per year, on 
average.\54\
---------------------------------------------------------------------------

    \54\ This estimate is based on a three-year average that 
assumes, based on data from foreign reporting company BOIRs received 
in calendar year 2024, that there would be eight personal FinCEN 
identifiers associated with each new reporting company, and that 
updates would accrue at the same rate as estimated in the previous 
final Reporting Rule.
---------------------------------------------------------------------------

    Estimated Time per Respondent: As discussed in the Reporting Rule, 
FinCEN anticipates that initial FinCEN identifier applications would 
require approximately 20 minutes (10 minutes to read the form and 
understand the information required and 10 minutes to fill out and file 
the request, including attaching an image of an acceptable 
identification document), given that the information to be submitted to 
FinCEN would be readily available to the person requesting the FinCEN 
identifier. FinCEN estimates that updates would require 10 minutes (10 
minutes to fill out and file the update).
    Estimated Aggregate Reporting Burden Hours: 32,3802 hours per year, 
on average.
    Estimated Aggregate Reporting Cost: $1,771,465.04 per year, on 
average.
3. Totals
    Estimated Total Reporting Burden Hours: 83,949 hours per year, on 
average.
    Estimated Total Reporting Cost: $22,507,178.50 per year, on 
average.
    Estimated Change in Total Reporting Burden Hours: -91,538,379 hours 
per year, on average.
    Estimated Change in Total Reporting Cost: $(9,011,817,866.50) per 
year, on average.

E. Congressional Review Act

    Pursuant to Subtitle E of the Small Business Regulatory Enforcement 
and Fairness Act of 1996 (also known as the Congressional Review Act or 
CRA), OMB's Office of Information and Regulatory Affairs has designated 
this rule a ``major rule,'' for purposes of the CRA.\55\
---------------------------------------------------------------------------

    \55\ 5 U.S.C. 804(2).
---------------------------------------------------------------------------

    Under the CRA, such a rule generally may take effect no earlier 
than 60 days after the rule is published in the Federal Register.\56\ 
Notwithstanding this requirement, the CRA allows agencies to dispense 
with the requirements of section 801 when the agency for good cause 
finds that ``notice and public procedure'' regarding the rule would be 
impracticable, unnecessary, or contrary to the public interest. If the 
agency finds such good cause, the rule shall take effect at such time 
as the agency promulgating the rule determines.\57\ Pursuant to section 
808(2), for the reasons discussed above, FinCEN for good cause finds 
that providing public notice or allowing for public comment before this 
interim final rule takes effect is impracticable, unnecessary, and 
contrary to the public interest.
---------------------------------------------------------------------------

    \56\ 5 U.S.C. 801(a)(3).
    \57\ 5 U.S.C. 808(2).
---------------------------------------------------------------------------

List of Subjects in 31 CFR Part 1010

    Administrative practice and procedure, Aliens, Authority 
delegations (Government agencies), Banks, banking, Brokers, Business 
and industry, Citizenship and naturalization, Commodity futures, Crime, 
Currency, Electronic filing, Federal savings associations, Federal-
State relations, Fiduciaries, Foreign banking, Foreign currencies, 
Foreign persons, Gambling, Holding companies, Indians, Indians--law, 
Indians--tribal government, Insurance companies, Investigations, 
Investment companies,

[[Page 13697]]

Law enforcement, Penalties, Reporting and recordkeeping requirements, 
Savings associations, Securities, Small business, Terrorism, Time.

    For the reasons set forth in the preamble, the Department of 
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. 457; sec. 701 Pub. L. 114-74, 
129 Stat. 599; sec. 6403, Pub. L. 116-283, 134 Stat. 3388.


0
2. Section 1010.380 is amended by:
0
a. Revising paragraph (a)(1)(i) and (ii);
0
b. Removing paragraph (a)(1)(iii);
0
c. Redesignating paragraph (a)(1)(iv) as (a)(1)(iii);
0
d. Adding paragraph (a)(2)(vi);
0
e. Redesignating paragraph (a)(3) as (a)(3)(i) and adding paragraph 
(a)(3)(ii);
0
f. Revising paragraph (b)(1)(i)(D) through (F);
0
g. Revising paragraph (b)(2)(iii);
0
h. Revising paragraph (c)(1);
0
i. Adding paragraph (c)(2)(xxiv);
0
j. Revising paragraph (d)(3)(i);
0
k. Adding paragraph (d)(4); and
0
l. Reserving paragraph (e)(1) and revising paragraphs (e)(2) and (3).
    The revisions and additions read as follows::


Sec.  1010.380   Reports of beneficial ownership information.

    (a) * * *
    (1) * * *
    (i) Any entity that becomes a reporting company on or after March 
26, 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 reporting company has been registered to 
do business.
    (ii) Any entity that became a reporting company before March 26, 
2025 shall file a report no later than April 25, 2025.
* * * * *
    (2) * * *
    (vi) Paragraphs (a)(2)(i) through (v) of this section shall only 
apply to reporting companies after March 26, 2025.
    (3)(i) * * *
    (ii) Paragraph (a)(3)(i) of this section shall only apply to 
reporting companies after March 26, 2025.
* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (D) The foreign jurisdiction of formation of the reporting company;
    (E) The State or Tribal jurisdiction where the reporting company 
first registers; and
    (F) The Internal Revenue Service (IRS) Taxpayer Identification 
Number (TIN) (including an Employer Identification Number (EIN)) of the 
reporting company, or where a reporting company has not been issued a 
TIN, a tax identification number issued by a foreign jurisdiction and 
the name of such jurisdiction;
* * * * *
    (2) * * *
    (iii) Foreign pooled investment vehicle. If an entity would be a 
reporting company but for paragraph (c)(2)(xviii) of this section, and 
is formed under the laws of a foreign country, such entity shall be 
deemed a reporting company for purposes of paragraphs (a) and (b) of 
this section, except the report shall include the information required 
under paragraph (b)(1) of this section solely with respect to an 
individual who exercises substantial control over the entity if that 
individual is not a United States person. If more than one individual 
exercises substantial control over the entity and at least one of those 
individuals is not a United States person, the entity shall report 
information with respect to the individual who is not a United States 
person who has the greatest authority over the strategic management of 
the entity.
* * * * *
    (c) Reporting company--(1) Definition of reporting company. For 
purposes of this section, the term ``reporting company'' means:
    (i) [Reserved]
    (ii) Any entity that is:
    (A) A corporation, limited liability company, or other entity;
    (B) Formed under the law of a foreign country; and
    (C) Registered to do business in any State or tribal jurisdiction 
by the filing of a document with a secretary of state or any similar 
office under the law of that State or Indian tribe.
    (2) * * *
    (xxiv) Domestic entity. Any entity that is:
    (A) A corporation, limited liability company, or other entity; and
    (B) Created by the filing of a document with a secretary of state 
or any similar office under the law of a State or Indian tribe.
    (d) * * *
    (3) * * *
    (i) A minor child, as defined under the law of the State or Indian 
tribe in which a reporting company is first registered, provided the 
reporting company reports the required information of a parent or legal 
guardian of the minor child as specified in paragraph (b)(2)(ii) of 
this section;
* * * * *
    (4) Exemptions. (i) Reporting companies are exempt from the 
requirement in 31 U.S.C. 5336 and this section to report the beneficial 
ownership information of any United States persons who are beneficial 
owners.
    (ii) United States persons are exempt from the requirements in 31 
U.S.C. 5336 and this section to provide beneficial ownership 
information with respect to any reporting company for which they are a 
beneficial owner.
    (e) * * *
    (1) [Reserved]
    (2) The individual who directly files the document that first 
registers the reporting company as described in paragraph (c)(1)(ii) of 
this section; and
    (3) The individual who is primarily responsible for directing or 
controlling such filing if more than one individual is involved in the 
filing of the document.
* * * * *

Andrea M. Gacki,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2025-05199 Filed 3-25-25; 8:45 am]
BILLING CODE 4810-02-P