The U.S. Department of the Treasury on Tuesday permanently canceled the requirement that obliged companies registered in the United States to disclose information about their owners to federal agencies.
Meanwhile, foreign companies and collective investment funds (such as mutual funds or hedge funds) are still required to provide information about their foreign owners. However, according to the Treasury Department’s clarification, they no longer have to identify Americans who help them register businesses in the U.S. The Treasury will also delete all information it has already collected about American business owners, the statement said.
Controversial assessments of the decision
Treasury Secretary Scott Bessent in his statement noted that the new rule eliminates “a burdensome reporting requirement for millions of law-abiding business owners without harming our national security.” Republicans on the Senate Banking Committee quickly thanked the Treasury for “supporting job creators.”
However, Democrats and some national security experts criticized this step, stating that it will make it easier for drug cartels, human traffickers, and money launderers to use anonymous shell companies to avoid detection. Richard Nephew, who led anti-corruption efforts at the State Department during the Biden administration, called this decision “horrible, as it opens the U.S. to financial crimes, money laundering, and corruption.”
The reporting requirements were introduced in January 2024 during the tenure of former President Joe Biden as part of efforts to curb illegal financing under the Corporate Transparency Act, which was passed by Congress and signed by Biden in 2021. It required American and foreign companies doing business in the U.S. to report to the Financial Crimes Enforcement Network of the Treasury Department (FinCEN) information about “beneficial owners” — individuals who have “substantial control” over the company or own at least 25% of the company.
The Corporate Transparency Act was supported by law enforcement agencies, the American Bankers Association, and human rights advocates, who stated that it would help combat the use of anonymous companies in corruption schemes. However, the law immediately drew criticism from the National Small Business Association, which called on Congress to repeal it and sued the Treasury Department, arguing that the reporting requirements disproportionately affect small business owners.
In March 2025, the Trump administration announced a temporary suspension of reporting requirements for American companies, as well as for American owners of foreign companies. On Tuesday, the Treasury made this decision permanent. In the FAQ section regarding the new rule, the Treasury noted that FinCEN and federal law enforcement agencies have numerous alternative sources of information to prevent money laundering or terrorism financing by American companies, which are not available in the case of foreign companies.
Small Business Administration Administrator Kelly Loeffler praised this decision, writing on social media that it will save American companies 6.7 billion dollars in compliance costs over the next decade. Senator Elizabeth Warren (Massachusetts), the leading Democrat on the Senate Banking Committee, called this decision “a gift to cartels, criminals, and U.S. adversaries who use shell companies to move millions through our financial system.”
Source: The Washington Post
