The Global Wait for the U.S. Beneficial Ownership Reporting Implementation

Since the adoption of the Corporate Transparency Act (the “CTA”) in 2021, there has been ongoing discourse around the constitutionality of the beneficial ownership information reports (the “BOIR”) rule given the resulting burden for smaller entities and privacy concerns. Financial Crimes Enforcement Network (“FinCEN”) initially released a statement confirming they would not enforce penalties for those who fail to file the BOIR. On March 21, 2025 FinCEN issued the Interim Final Rule, amending the Beneficial Ownership Reporting Rule (the “Rule”) removing the requirement for U.S. companies and U.S. persons to report BOI to FinCEN under the CTA, potentially quieting the legal challenges. With the revision of the Rule now, we can consider whether this places the US in alignment with the approaches being taken by other Financial Action Taskforce (the “FATF”) member states.  

The Beneficial Ownership regimes we have seen emerge across the FATF member states are a result of the FATF’s Recommendation 24 (“R24”). This recommendation focuses on the states implementing measures to adequately identify the ultimate beneficial owners (“UBOs”) behind entities. In 2022 and 2024, R24 was updated to curb escalating global money laundering, tax evasion and terrorist financing activities (“Financial Threats”) by introducing more measures that could be implemented to have greater transparency around beneficial owners. Following a 2016 FATF mutual evaluation, the U.S. was amongst the states found to have R24 deficiencies. Whilst deficient states were placed on the FATF grey list until they could address their deficiencies, the U.S. was scheduled for an enhanced follow-up specifically for non-compliance with R24. This was despite the fact the U.S. had historically faced scrutiny around its lack of action to combat Financial Threats. Their status was upgraded to largely compliant following the March 2024 re-rating report issuance (see here). This rating upgrade was due to the adoption of the CTA.  

The current Trump Administration’s proposed shift to have the BOIR focused on foreign owned companies does not deviate too far from some of the FATF states’ position on exempting locally owned or exclusively local operating companies (“Domestic Companies”), despite debates on unfair targeting of foreign ownership. The term “locally owned” in these contexts is inclusive of entities with beneficial owners who are lawful residents, citizens and indigenous persons or only conduct business locally. This exemption makes sense in jurisdictions like Guernsey where they have sufficient knowledge through local regulatory channels to identify the UBOs behind the Domestic Company and the entity is declared to not engage in activities outside the territory. Additionally, these BOIR are also not publicly available and access to the UBO data is limited to government authorities or those with approved access in narrow circumstances. The current CTA shares the same parameters around BOIR data access and sharing. 

We can see that member states that adopted BOIR regimes early have since continued to strengthen their measures to ensure alignment with global standards, despite the additional compliance cost impact on entities. For example, popular offshore jurisdictions like the British Virgin Islands and the Cayman Islands have moved to make amendments to further enhance transparency and clarify scope (see here and here, respectively). The amendments emerging include the following: 

• requesting more data on the UBOs;

• narrowing of notification periods for registrations and changes to UBOs;

• an entity’s duty to investigate beneficiaries and to record any actions taken to identify UBOs;

• expansion of the list of in scope entities; and

• clarification on actions for exempted regulated entities i.e. investment funds.

The growing acceptance and development of BOIR regimes suggest the case for adoption is strong. The member states adopting reciprocal standards and enforcement has mutual benefits, helping keep the bad actors from transacting freely across borders, avoiding compliance screenings. Given the U.S. global economic influence and past pressure to have high AML standards, onlookers are waiting to see the U.S. fully implement a BOIR regime that remains well aligned with the established global standards.