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FinCEN clarifies Beneficial Ownership Reporting requirements for the USA and Puerto Rico
The Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) has issued additional guidelines relating to the upcoming beneficial ownership reporting requirements, set to come into force on the 1st of January 2024.
The requirements apply to Domestic and Foreign Reporting Companies and will also be applicable in Puerto Rico.
Reporting companies with incorporation date prior to January 1, 2024, will have until January 1, 2025 to file its initial beneficial ownership information report.
Newly formed entities (incorporated after January 1, 2024) will have to comply with the same requirement within 30 days after the company receives actual notice that its creation or registration is effective, or after a secretary of state or similar office first provides public notice of its creation or registration, whichever is earlier.
FinCEN will begin accepting beneficial ownership information reports on January 1, 2024. Companies will need to submit a specific form through a secure filing system.
However, the system is still under development and the form companies will need to complete is not yet available.
Further instruction and guidance from FinCEN is expected to be in place early in 2024.
The risk of non-compliance
Failure to comply with the reporting requirements may be subject to:
- Civil penalties of up to USD 500 for each day that the violation continues;
- Criminal penalties including imprisonment for up to two (2) years and/or a fine of up to USD 10,000.