Learn about the new FinCEN guidelines and how to report Beneficial Ownership Information (BOI).
On March 24, 2023, the Financial Crimes Enforcement Network (FinCEN) published guidance regarding Beneficial Ownership Information (BOI) reporting, which comes into effect on January 1, 2024. The guidance aims to help small businesses adopt the reporting rule requirements issued in September 2022.
Sumsub has summarized the guidance with links to other essential materials.
The Financial Crimes Enforcement Network, or simply FinCEN, is part of the US Department of the Treasury. The agency oversees a variety of sectors (crypto, fintech, etc.), safeguarding the financial system from crimes such as money laundering and terrorism financing.
According to FinCEN, a “Beneficial Owner” is a person who “exercises substantial control” over a company, or a person who owns or controls at least 25% of a company. This threshold applies only in the US, as the exact ownership threshold for “Beneficial Ownership” status may vary by country.
Suggested read: UBO: Understanding the Ultimate Beneficial Owner
The changes introduced by FinCEN in September 2022 include:
Companies have to provide the following information about themselves:
Then, the reporting company has to provide the following information about each “Beneficial Owner” and/or “Company Applicant” (depending on the date of the company’s registration):
These reporting deadlines differ depending on the date of a company’s registration. If a company was established before January 1, 2024, it has to submit reports before January 1, 2025. If a company was registered after January 1, 2024, it has to send a report within 30 days after receiving notice of its creation or registration. If a company makes changes concerning previously-reported information, then it has to submit a revised version of its report within 30 days of making such changes.
As part of its guidance, FinCEN has issued a set of educational materials including:
The current reporting rule is just the first step taken by FinCEN to provide a more comprehensive legal framework. The next steps include introducing the Access Rule, as well as new rules on Customer Due Diligence (CDD) checks.
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