Experts are questioning FinCEN's delay in implementing the Corporate Transparency Act, according to reporting by the International Consortium of Investigative Journalists ("ICIJ"). ICIJ's previous reporting (which was nominated for a Pulitzer Prize) was the work product of more than 400 journalists from 88 countries.
The reporting quotes Gary Kalman, the director of Transparency International's U.S. office to say, "This is all taking way too long, much longer than expected, and FinCEN underfunding slowed the process. FinCEN got a bump in funding this year, but more is needed. Still, they should be able to complete this rulemaking process."
The Corporate Transparency Act was adopted by Congress in December 2020. The statute required FinCEN to adopt implementing regulations no later than December 31, 2021. And yet, nine months after that deadline, FinCEN has not announced final regulations.
When pressed by Congress to explain why FinCEN had missed the statutory deadline, FinCEN's executive director blamed a lack of funding and other priorities. He testified, "As you are aware, we are missing deadlines. To be blunt, we will likely continue to do so because our budget situation has required us to make significant trade-offs among competing priorities."
In response, a bipartisan group of Senators wrote to FinCEN's executive director, urging him to prioritize the completion of FinCEN's CTA regulations.
ICIJ's latest reporting decries these continuing delays. "There is a lot of anxiety that the Biden administration will take the whole four years to finalize the rules setting up the beneficial ownership registry," Elise Bean, an anti-corruption expert and former chief counsel of the U.S. Senate Permanent Subcommittee on Investigations, said. "It is hard to understand what is taking so long."
About The Author
Jonathan Wilson is the co-founder of FinCEN Report Company with 31 years of experience in corporate, M&A and securities matters. He is the author of The Corporate Transparency Act Compliance Guide (to be published by Lexis Nexis in the summer of 2023) and the Lexis Practical Guidance Practice Note on the Corporate Transparency Act.