The US Treasury has finalised a rule exempting American companies and people from reporting beneficial ownership information to its financial crimes unit.
The latest ruling from the Financial Crimes Enforcement Network repeals reporting requirements that were previously under the Corporate Transparency Act, which was signed by former president Joe Biden in 2021 to battle illicit activity including money laundering and terrorism financing.
A beneficial owner is someone who owns or controls at least 25 per cent of a legal entity, or who exercises “ultimate effective control over a legal person or arrangement”.
Foreign companies and pooled investment vehicles – such as hedge funds – will still be required to report information about foreign owners.
However, the updated ruling exempts them from reporting Americans who helped them register to do business in the US, according to a Treasury statement released alongside the notice.
“FinCen has effectively repealed much of the framework without completely slashing and burning the entire thing,” said Farhad Alavi, managing partner of Akrivis Law Group.
The Corporate Transparency Act was enacted by the Anti-Money Laundering Act of 2020, which aimed to update the US's anti-money laundering laws.
“These requirements were in response to the belief held by many that US had many open-ended corporate registration rules and regulations that were or are still very loose compared to the frameworks in many other countries,” Mr Alavi said.
The Corporate Transparency Act took effect in 2024. The new measure makes permanent an interim rule first announced in March 2025 that suspended reporting requirements for US businesses and owners of foreign companies.
“Importantly, in developing the final rule, Treasury considered that there are alternative sources of information to mitigate the risks posed by domestic entities," Treasury said.
"When investigating potential illicit activity, Treasury, law enforcement, and other authorities continue to have a variety of tools available to them to obtain information on domestic companies."
The move is part of broader deregulatory efforts by President Donald Trump's administration.
“President Trump promised to cut red tape and this final rule delivers. Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security,” Treasury Secretary Scott Bessent said in a statement.
Tuesday's move was met with mixed reactions. The Republican-controlled US Senate banking committee thanked Mr Trump for “standing up for job creators”.
But Senator Elizabeth Warren, the top Democrat on the committee, called the ruling a “gift to cartels, criminals and US adversaries that exploit shell companies to move millions through our financial system”.
