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The How-To Process of Reporting to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN)

How will Reporting Company’s Report Relevant Information to FinCEN?

Although not currently available, FinCEN will accept all reporting information electronically through a secure filing system to be made available on FinCEN’s website. FinCEN is required by federal law to implement protocols to safeguard beneficial ownership information, to build a secure IT system to store the information, and to establish processes and procedures to ensure that only authorized users have access to beneficial ownership information for authorized purposes. Unauthorized disclosure or use of reported information can result in significant penalties including up to $500 per day a violation continues up to $250,000, up to five (5) years in jail, or both and if the violation occurs in the course of violating another law of the United States or as part of a pattern of any illegal activity involving more than $100,000 in a twelve (12) month period, the penalties can be up to $500,000, up to ten (10) years in jail, or both.

Are Updates To Beneficial Owner Reports Required?

Yes, updates are required within thirty (30) days after any change to beneficial owner information and within thirty (30) days from discovery of an inaccuracy to file a correction to a previously filed report.

What Happens if a Non-Exempt Reporting Company Fails to Report?

Willfully providing false or fraudulent information or willfully failing to report complete or updated information may result in up to $500 for each day a violation continues up to $10,000 and/or two (2) years in prison. These harsh sanctions are the reason it is imperative all reporting companies closely follow the status of enactment of CTA and begin gathering responsive information from its beneficial owners.

Who Can Access Reported Information?

Information reported to FinCEN will be available to local, state, federal and Tribal agencies engaged in national security and law enforcement, foreign law enforcement and governmental agencies, financial institutions utilizing reported information to facilitate compliance with customer due diligence requirements with consent from the reporting company, federal regulatory agencies overseeing financial institutions for compliance with customer due diligence, and any U.S. Department of Treasury employee whose official duties require beneficial owner information inspection or disclosure or for tax administration.

What Should My Company Do in Preparation for CTA?

With an estimated 30,000,000 small business affected by CTA, businesses should closely monitor developments around CTA as we approach January 1, 2024 and be prepared to gather required information from beneficial owners and company applicants, as applicable. Reporting companies should be prepared for the significant time commitment needed to accurately report relevant information as it is estimated that reporting companies with simple ownership structures will require 90 minutes to report relevant information to FinCEN.

Should you wish to discuss CTA or its applicability to your company, please contact Patrick Rouse at 210-736-6600 or by email to