The information contained in this document is marketing material and for informational purposes only. The information contained in this document is presented without any warranty or representation as to its accuracy or completeness and all implied representations or warranties of any kind are hereby disclaimed. Recipients of this document, whether clients or otherwise, should not act or refrain from acting on the basis of any information included in this document without seeking appropriate professional advice. The provision of the information contained in this document does not establish any express or implied duty or obligation between Citco and any recipient and neither Citco nor any of its shareholders, members, directors, principals or personnel shall be responsible or liable for results arising from the use or reliance of the information contained in this document including, without limitation, any loss (whether direct, indirect, in contract, tort or otherwise) arising from any decision made or action taken by any party in reliance upon the information contained in this document. © The Citco Group Limited, December 2023.
New updates for requirements to register UBO in the USA
On the 1st of January 2021, the Corporate Transparency Act (CTA) took effect in the United States of America (USA).
The first Ultimate Beneficial Owner (UBO) provisions of CTA raised some questions, and the Financial Crimes Enforcement Network (FinCEN) recently released final regulations that address those questions and offer explanations and advice.
On the 29th of September 2022, the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced the final regulations on UBO reporting requirements. The regulations will become operative on the 1st of January 2024 and before that date, no Beneficial Ownership Information (BOI) will be accepted.
The requirements apply to domestic reporting companies (formed by filing paperwork with a US state that is a corporation, LLC) and foreign reporting companies (created under the laws of a different nation and registered to conduct business in the US by submitting paperwork to a US state).
Exemptions from UBO requirements:
- Large operating companies;
- Businesses in highly regulated sectors (banks, insurance providers, etc.);
- Subsidiary companies wholly owned by other exempt organizations;
- Entities that haven’t conducted active business or possessed significant assets in the 12 months previous to the 1st of January 2020.
The UBO information will not be publicly available and any flagrant breach of the UBO reporting requirements is punishable by civil or criminal sanctions, including civil fines of up to $500 per day of violation and criminal fines of up to $10,000 and/or two years in prison, or both.