On March 26, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule (RIN 1506-AB49) narrowing the applicability of the beneficial ownership information (BOI) rule to foreign reporting companies.

The Corporate Transparency Act (CTA) includes the BOI rule, a provision that requires companies to report identifying information on their owners. The BOI rule was at first to be widely applied to both domestic and foreign companies. It was designed as a tool to fight money-laundering. However, after considerable controversy, the rule as it was first articulated was found to be overbroad, impacting domestic companies that were not necessarily at risk for being used to launder illegal funds. Even under the original rule, licensed agencies and advisors were exempt.

Under the new interim final rule, the BOI requirement will apply only to foreign reporting companies. The rule specifically exempts domestic reporting companies from the reporting requirements.

The rule also clarifies the rules with respect to the foreign companies that are impacted by them, and extends the reporting deadlines to file initial BOI reports and/or to update or correct previously filed BOI reports. One clarification that could be important is the one that exempts foreign reporting companies from having to report identifying ownership information on U.S. persons who are beneficial owners of the foreign reporting company.

The new interim final rule is effective as of March 26, 2025. FinCEN is requesting comments on it. Comments are due by May 27, 2025.

Prospects: The CTA, including its BOI rule, was enacted five years ago by a wide bipartisan margin. It is viewed as an important anti-money-laundering tool. However, its BOI rule has come be to be viewed as an overreach that must be corrected. It is expected that FinCEN will finalize the interim final rule later this year, after the agency considers the comments it receives by the close of the comment period in late May. Court challenges are likely.

NAIFA Staff Contacts: Diane Boyle – Senior Vice President – Government Relations, at dboyle@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org; or Mike Hedge – Senior Director – Government Relations, at mhedge@naifa.org.