The Financial Crimes Enforcement Network (FinCEN) has declared it will not impose fines or penalties in connection to the violations of the Beneficial Ownership Information (BOI) compliance with the Corporate Transparency Act (CTA). This announcement was made in light of the agency recognizing the need for greater clarity as the regulatory framework around BOI is still evolving. Under the CTA, which took effect on January 1, 2024, corporations and limited liability companies must report their beneficial owners to FinCEN. The absence of designated penalties reflects FinCEN’s intention to support compliance over enforcement, especially as companies navigate this new and complex regulatory landscape. They conveyed this sentiment in a statement emphasizing their commitment to allow companies to meet the requirements without the fear of immediate penalties. Further, FinCEN’s approach does not indicate leniency towards anti-money laundering (AML) obligations but is rather aimed at ensuring that businesses understand and adhere to the new reporting protocols. The change also aligns with the recent updates issued by the U.S. Treasury Department, which has similarly indicated a flexible enforcement approach towards the extended deadlines related to the CTA filings. In a related announcement, the Treasury Department confirmed it will not enforce the yet-to-be-established filing deadlines for the beneficial ownership information as it allows firms additional time to gather necessary information. This decision was welcomed by industry leaders as it alleviates immediate compliance pressures, facilitating a smoother transition for entities adjusting to the new rules.
