Beneficial Ownership Information Reporting Requirements

Published date05 April 2021
Citation86 FR 17557
Record Number2021-06922
SectionProposed rules
CourtFinancial Crimes Enforcement Network,Treasury Department
17557
Federal Register / Vol. 86, No. 63 / Monday, April 5, 2021 / Proposed Rules
1
The CTA is Title LXIV of the National Defense
Authorization Act for Fiscal Year 2021, Public Law
116–283 (January 1, 2021). Section 6403 of the CTA,
among other things, amends the Bank Secrecy Act
Continued
therefore: (1) Is not a ‘‘significant
regulatory action’’ under Executive
Order 12866; (2) is not a ‘‘significant
rule’’ under Department of
Transportation (DOT) Regulatory
Policies and Procedures (44 FR 11034;
February 26, 1979); and (3) does not
warrant preparation of a regulatory
evaluation as the anticipated impact is
so minimal. Since this is a routine
matter that will only affect air traffic
procedures and air navigation, it is
certified that this proposed rule, when
promulgated, will not have a significant
economic impact on a substantial
number of small entities under the
criteria of the Regulatory Flexibility Act.
Environmental Review
This proposal will be subjected to an
environmental analysis in accordance
with FAA Order 1050.1F,
‘‘Environmental Impacts: Policies and
Procedures,’’ prior to any FAA final
regulatory action.
List of Subjects in 14 CFR Part 73
Airspace, Prohibited areas, Restricted
areas.
The Proposed Amendment
In consideration of the foregoing, the
Federal Aviation Administration
proposes to amend 14 CFR part 73 as
follows:
PART 73—SPECIAL USE AIRSPACE
1. The authority citation for part 73
continues to read as follows:
Authority: 49 U.S.C. 106(f), 106(g); 40103,
40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR,
1959–1963 Comp., p. 389.
§ 73.41 Massachusetts [Amended]
2. Section 73.41 is amended as
follows:
* * * * *
R–4102A Fort Devens, MA [Amended]
Boundaries. Beginning at lat. 42°3111N,
long. 71°3829W; to lat. 42°3055N, long.
71°3751W; to lat. 42°3012N, long.
71°3805W; to lat. 42°2938N, long.
71°3741W; to lat. 42°2821N, long.
71°3914W; to lat. 42°2811N, long.
71°3932W; to lat. 42°2811N, long.
71°3938W; to lat. 42°2815N, long.
71°3945W; to lat. 42°2825N, long.
71°4008W; to lat. 42°2854N, long.
71°4100W; to lat. 42°2908N, long.
71°4106W; to lat. 42°2952N, long.
71°4108W; to lat. 42°3017N, long.
71°4129W; to lat. 42°3019N, long.
71°4119W; to lat. 42°3037N, long.
71°4030W; to lat. 42°3043N, long.
71°4017W; to lat. 42°3052N, long.
71°4014W; to lat. 42°3054N, long.
71°4010W; to lat. 42°3053N, long.
71°4002W; to lat. 42°3048N, long.
71°3957W; to lat. 42°3047N, long.
71°3945W; to lat. 42°3055N, long.
71°3931W; to lat. 42°3058N, long.
71°3918W; to lat. 42°3057N, long.
71°3909W; to lat. 42°3052N, long.
71°3842W; to lat. 42°3058N, long.
71°3833W; to lat. 42°3106N, long.
71°3837W; thence to the point of
beginning. Designated altitudes. Surface to,
but not including, 2,000 feet MSL. Time of
designation. Intermittent, 0730–2200 local
time, daily; other times by NOTAM issued 24
hours in advance. Controlling agency. FAA,
Boston Approach Control. Using agency.
Commander, U.S. Army Garrison, Fort
Devens, MA.
R–4102B Fort Devens, MA [Amended]
Boundaries. Beginning at lat. 42°3111N,
long. 71°3829W; to lat. 42°3055N, long.
71°3751W; to lat. 42°3012N, long.
71°3805W; to lat. 42°2938N, long.
71°3741W; to lat. 42°2821N, long.
71°3914W; to lat. 42°2811N, long.
71°3932W; to lat. 42°2811N, long.
71°3938W; to lat. 42°2815N, long.
71°3945W; to lat. 42°2825N, long.
71°4008W; to lat. 42°2854N, long.
71°4100W; to lat. 42°2908N, long.
71°4106W; to lat. 42°2952N, long.
71°4108W; to lat. 42°3017N, long.
71°4129W; to lat. 42°3019N, long.
71°4119W; to lat. 42°3037N, long.
71°4030W; to lat. 42°3043N, long.
71°4017W; to lat. 42°3052N, long.
71°4014W; to lat. 42°3054N, long.
71°4010W; to lat. 42°3053N, long.
71°4002W; to lat. 42°3048N, long.
71°3957W; to lat. 42°3047N, long.
71°3945W; to lat. 42°3055N, long.
71°3931W; to lat. 42°3058N, long.
71°3918W; to lat. 42°3057N, long.
71°3909W; to lat. 42°3052N, long.
71°3842W; to lat. 42°3058N, long.
71°3833W; to lat. 42°3106N, long.
71°3837W; thence to the point of
beginning.
Designated altitudes. 2,000 feet MSL to
3,995 feet MSL.
Time of designation. Intermittent, 0730–
2200 local time, daily; other times by
NOTAM issued 24 hours in advance.
Controlling agency. FAA, Boston Approach
Control.
Using agency. Commander, U.S. Army
Garrison, Fort Devens, MA.
* * * * *
Issued in Washington, DC, on March 29,
2021.
George Gonzalez,
Acting Manager, Rules and Regulations
Group.
[FR Doc. 2021–06739 Filed 4–2–21; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
31 CFR Part 1010
RIN 1506–AB49
Beneficial Ownership Information
Reporting Requirements
AGENCY
: Financial Crimes Enforcement
Network (FinCEN), Treasury.
ACTION
: Advance notice of proposed
rulemaking.
SUMMARY
: FinCEN is issuing this
advance notice of proposed rulemaking
(ANPRM) to solicit public comment on
questions pertinent to the
implementation of the Corporate
Transparency Act (CTA), enacted into
law as part of the National Defense
Authorization Act for Fiscal Year 2021
(NDAA). This ANPRM seeks initial
public input on procedures and
standards for reporting companies to
submit information to FinCEN about
their beneficial owners (the individual
natural persons who ultimately own or
control the reporting companies) as
required by the CTA. This ANPRM also
seeks initial public input on FinCEN’s
implementation of the related
provisions of the CTA that govern
FinCEN’s maintenance and disclosure of
beneficial ownership information
subject to appropriate protocols.
DATES
: Written comments on this
ANPRM must be received on or before
May 5, 2021.
ADDRESSES
: Comments may be
submitted by any of the following
methods:
Federal E-rulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
Refer to Docket Number FINCEN–2021–
0005 and RIN 1506–AB49.
Mail: Policy Division, Financial
Crimes Enforcement Network, P.O. Box
39, Vienna, VA 22183. Refer to Docket
Number FINCEN–2021–0005 and RIN
1506–AB49.
FOR FURTHER INFORMATION CONTACT
: The
FinCEN Regulatory Support Section at
1–800–767–2825 or electronically at
frc@fincen.gov.
SUPPLEMENTARY INFORMATION
:
I. Scope of ANPRM
This ANPRM seeks comment on
FinCEN’s implementation of certain
provisions in Section 6403 of the CTA.
1
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by adding a new Section 5336, Beneficial
Ownership Information Reporting Requirements, to
Subchapter II of Chapter 53 of Title 31, United
States Code. To the greatest extent possible, this
ANPRM will cite to new 31 U.S.C. 5336.
2
Section 6003(1) of the Anti-Money Laundering
Act of 2020, Division F of the National Defense
Authorization Act for Fiscal Year 2021, Public Law
116–283 (January 1, 2021), which includes the CTA,
defines the Bank Secrecy Act as comprising Section
21 of the Federal Deposit Insurance Act (12 U.S.C.
1829b), Chapter 2 of Title I of Public Law 91–508
(12 U.S.C. 1951 et seq.), and Subchapter II of
Chapter 53 of Title 31, United States Code.
3
31 U.S.C. 5311(1), (5).
4
Treasury Order 180–01 (Jan. 14, 2020).
5
31 U.S.C. 5318(a)(2).
6
CTA Section 6402(3).
7
CTA Section 6402(4).
8
Notice of Proposed Rulemaking: Customer Due
Diligence Requirements for Financial Institutions,
79 FR 45151, 45153 (August 4, 2014).
9
U.S. Department of the Treasury, National
Money Laundering Risk Assessment (2018) (2018
NMLRA), pp. 28–30, https://home.treasury.gov/
system/files/136/2018NMLRA_12-18.pdf.
10
U.S. Department of the Treasury, National
Strategy for Combating Terrorist and Other Illicit
Financing (2020) (2020 National Strategy), p. 14,
https://home.treasury.gov/system/files/136/
National-Strategy-to-Counter-Illicit-Financev2.pdf.
11
Testimony of Steven M. D’Antuono, Acting
Deputy Assistant Director, Criminal Investigative
Section 6403 requires reporting
companies (corporations, limited
liability companies (LLCs), and similar
entities, subject to certain statutory
exemptions) to submit to FinCEN
specified information on their beneficial
owners—the individual natural persons
who own or control them—as well as
specified information about the persons
who form or register those reporting
companies. Section 6403 further
requires FinCEN to maintain this
information in a confidential, secure,
and non-public database, and it
authorizes FinCEN to disclose the
information to certain government
agencies for certain purposes specified
in the CTA, and to financial institutions
to assist in meeting their customer due
diligence obligations. In both cases,
these disclosures are subject to
appropriate protocols to protect
confidentiality. This ANPRM seeks
comment on numerous questions as
FinCEN begins to develop proposed
regulations implementing these
provisions. While only the regulations
implementing the reporting
requirements must be promulgated by
January 1, 2022, with an effective date
to be determined, FinCEN also seeks
comment at this time on its
implementation of the related database
maintenance use and disclosure
provisions. Section 6403’s mandate that
the final rule on customer due diligence
requirements for financial institutions
be revised will be the subject of a
separate rulemaking, about which the
public will receive notice and
opportunity to comment.
II. Background
A. The Bank Secrecy Act
Enacted in 1970 and amended most
recently by the Anti-Money Laundering
Act of 2020, which includes the CTA,
the Bank Secrecy Act (BSA) aids in the
prevention of money laundering,
terrorism financing, and other illicit
activity.
2
The purposes of the BSA
include, among other things,
‘‘requir[ing] certain reports or records
that are highly useful in—(A) criminal,
tax, or regulatory investigations, risk
assessments, or proceedings; or (B)
intelligence or counterintelligence
activities, including analysis, to protect
against terrorism’’ and ‘‘establish[ing]
appropriate frameworks for information
sharing’’ among financial institutions
and government authorities.
3
Congress has authorized the Secretary
of the Treasury (the Secretary) to
administer the BSA. The Secretary has
delegated to the Director of FinCEN the
authority to implement, administer, and
enforce compliance with the BSA and
associated regulations.
4
FinCEN is
authorized to require financial
institutions or nonfinancial trades or
businesses to maintain procedures to
ensure compliance with the BSA and
the regulations promulgated thereunder
and to guard against money laundering,
the financing of terrorism, and other
forms of illicit finance.
5
B. Beneficial Ownership of Legal
Entities
Legal entities such as corporations
and LLCs play an important role in the
U.S. economy. By limiting individual
liability, corporations and LLCs allow
owners to manage the risks associated
with participating in business ventures.
They also facilitate the formation of
capital, making it easier to finance large
business projects and structure the
relationships among individuals
engaged in an enterprise. They often can
be formed with relatively few
formalities and abbreviated (if any)
regulatory review and approval, and
their availability can be viewed as a
stimulus to investment,
entrepreneurship, and economic
activity.
At the same time, legal entities can be
misused to conceal and facilitate illicit
activity. As Congress recognized in the
CTA, ‘‘malign actors seek to conceal
their ownership of corporations, limited
liability companies, or other similar
entities in the United States to facilitate
illicit activity, including money
laundering, the financing of terrorism,
proliferation financing, serious tax
fraud, human and drug trafficking,
counterfeiting, piracy, securities fraud,
financial fraud, and acts of foreign
corruption[.]’’
6
Furthermore, Congress
underscored that ‘‘money launderers
and others involved in commercial
activity intentionally conduct
transactions through corporate
structures in order to evade detection,
and may layer such structures . . .
across various secretive jurisdictions
such that each time an investigator
obtains ownership records for a
domestic or foreign entity, the newly
identified entity is yet another corporate
entity, necessitating a repeat of the same
process.’’
7
The ability to engage in
activity and obtain financial services in
the name of a legal entity without
disclosing the identities of the natural
persons who own or control the entity—
the natural persons whose interests the
legal entity most directly serves—
enables those natural persons to conceal
their interests. As FinCEN has
previously highlighted, such
concealment ‘‘facilitates crime,
threatens national security, and
jeopardizes the integrity of the financial
system.’’
8
U.S. government reports have
consistently identified the ability to
operate through legal entities without
ready identification of their beneficial
owners as a key illicit finance risk for
the U.S. financial system. The 2018
National Money Laundering Risk
Assessment noted that legal entities are
misused by illicit actors to disguise
criminal proceeds, and that the lack of
readily available beneficial ownership
information hampers law enforcement
investigations, asset seizures and
forfeitures, and international
cooperation, as well as the ability of
financial institutions to conduct
customer due diligence (CDD) and
identify suspicious activity.
9
Further,
the 2020 National Strategy to Combat
Terrorist and Other Illicit Financing
(2020 National Strategy) found that
large-scale schemes that generate
substantial proceeds for perpetrators
and smaller white-collar cases alike
routinely involve shell companies.
10
As
the Federal Bureau of Investigation (FBI)
stated in recent Congressional
testimony, the strategic use of shell
companies ‘‘makes investigations
exponentially more difficult and
laborious. The burden of uncovering
true beneficial owners can often
handicap or delay investigations,
frequently requiring duplicative, slow-
moving legal process in several
jurisdictions to gain the necessary
information.’’
11
Moreover, as the 2020
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Division, Federal Bureau of Investigation, before the
Senate Banking, Housing, and Urban Affairs
Committee, May 21, 2019.
12
2020 National Strategy, p. 14.
13
31 U.S.C. 5318(i)(2), added by Section 312(a) of
the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA PATRIOT) Act of
2001 (Pub. L. 107–56).
14
81 FR 29398 (May 11, 2016).
15
31 CFR 1010.230.
16
See U.S. Money Laundering Threat Assessment
Working Group, U.S. Money Laundering Threat
Assessment, pp. 48–49 (2005), https://
www.treasury.gov/resource-center/terrorist-illicit-
finance/documents/mlta.pdf. See also Miller, Rena
S. and Rosen, Liana W., Beneficial Ownership
Transparency in Corporate Formation, Shell
Companies, Real Estate, and Financial Transactions,
Congressional Research Service (July 8, 2019),
https://crsreports.congress.gov/product/pdf/R/
R45798. In promulgating the CDD Rule, FinCEN
noted that the beneficial ownership collection and
verification requirements imposed on financial
institutions at the account opening stage for legal
entities was one part of a strategy that also involved
the collection of beneficial ownership information
at the time of incorporation. See 81 FR 29398,
29401 (‘‘[C]larifying and strengthening CDD is an
important component of Treasury’s broader three-
part strategy to enhance financial transparency of
legal entities. Other key elements of this strategy
include: (i) . . . the collection of beneficial
ownership information at the time of the legal
entity’s formation and (ii) facilitating global
implementation of international standards
regarding CDD and beneficial ownership of legal
entities’’).
17
CTA Section 6402(5)(B). See 2020 National
Strategy, p. 40; 2018 NMLRA, pp. 28–30. See also
Miller, Rena S. and Rosen, Liana W., Beneficial
Ownership Transparency in Corporate Formation,
Shell Companies, Real Estate, and Financial
Transactions, Congressional Research Service (July
8, 2019), https://crsreports.congress.gov/product/
pdf/R/R45798.
18
The FATF is an international, inter-
governmental task force whose purpose is the
development and promotion of international
standards and the effective implementation of legal,
regulatory, and operational measures to combat
money laundering, terrorist financing, the financing
of proliferation, and other related threats to the
integrity of the international financial system.
Among other things, it has established standards on
transparency and beneficial ownership of legal
persons, so as to deter and prevent the misuse of
corporate vehicles. The FATF Recommendations
require countries to ensure that ‘‘adequate, accurate,
and timely information on the beneficial ownership
and control’’ of corporate vehicles is available and
can be accessed by the competent authorities in a
timely fashion. See FATF Recommendation 24,
Transparency and Beneficial Ownership of Legal
Persons, The FATF Recommendations:
International Standards on Combating Money
Laundering and the Financing of Terrorism and
Proliferation (updated October, 2020), http://
www.fatf-gafi.org/publications/
fatfrecommendations/documents/fatf-
recommendations.html; FATF Guidance,
Transparency and Beneficial Ownership at par. 3
(October 2014), https://www.fatf-gafi.org/media/
fatf/documents/reports/Guidance-transparency-
beneficial-ownership.pdf.
19
See FATF, Mutual Evaluation of the United
States (2016), p. 4 (key findings) and Ch. 7.
20
FATF-Egmont Group, Concealment of
Beneficial Ownership (2018), https://
www.egmontgroup.org/sites/default/files/filedepot/
Concealment_of_BO/FATF-Egmont-Concealment-
beneficial-ownership.pdf.
21
See, e.g., United States G–8 Action Plan for
Transparency of Company Ownership and Control
(June 2013), https://obamawhitehouse.archives.gov/
the-press-office/2013/06/18/united-states-g-8-
action-plan-transparency-company-ownership-and-
control; G8 Lough Erne Declaration (July 2013),
https://www.gov.uk/government/publications/g8-
lough-erne-declaration; G20 High Level Principles
on Beneficial Ownership (2014), http://
www.g20.utoronto.ca/2014/g20_high-level_
principles_beneficial_ownership_transparency.pdf;
United States Action Plan to Implement the G–20
High Level Principles on Beneficial Ownership
(Oct. 2015), https://obamawhitehouse.archives.gov/
blog/2015/10/16/us-action-plan-implement-g-20-
high-level-principles-beneficial-ownership.
National Strategy noted, ‘‘while some
federal law enforcement agencies may
have the resources required to
undertake complex (and costly)
investigations [of this sort], the same is
often not true for state, local, and tribal
law enforcement.’’
12
The burden
imposed on investigations by the
concealment of beneficial ownership
information and the difficulty of
obtaining accurate beneficial ownership
information thus significantly hampers
U.S. anti-money laundering (AML) and
countering the financing of terrorism
(CFT) efforts.
The United States has taken steps to
increase corporate transparency. For
example, in October 2001, Congress
began requiring U.S. financial
institutions that maintain correspondent
accounts for certain categories of foreign
banks to obtain beneficial ownership
information about those banks,
including ‘‘the identity of each of the
owners of the foreign bank, and the
nature and extent of the ownership
interest of each such owner.’’
13
In 2016,
FinCEN promulgated the CDD Rule,
14
which, among other things, requires
banks, broker-dealers, mutual funds,
futures commission merchants, and
introducing brokers in commodities to
collect beneficial ownership
information at the time they open new
accounts for legal entity customers,
including corporations and LLCs.
15
But these steps are only a partial
solution.
16
For example, U.S. legal
entities could make payments through
foreign accounts to acquire U.S.-based
assets and then use those assets to
engage in illicit activity without ever
undergoing CDD. Further, U.S. legal
entities without any U.S.-based
accounts could be engaged in illicit
activity outside the United States
without having ever been subjected to
CDD.
Moreover, requiring financial
institutions to obtain beneficial
ownership information at the time of
account opening, as the CDD Rule
requires, does not make beneficial
ownership information about U.S. legal
entities available to law enforcement
before an account is opened. Because
states have different practices governing
the formation of legal entities in the
United States, the extent to which
information about the beneficial owners
of a U.S. legal entity may be otherwise
available to law enforcement can vary
widely from state to state.
The U.S. government has long
recognized that the difficulty of
obtaining accurate, up-to-date beneficial
ownership information constitutes a
fundamental risk that due diligence by
U.S. financial institutions cannot
completely mitigate. Consequently, the
U.S. government has identified this
deficiency as the top priority for
strengthening the U.S. AML/CFT
regime, which, as Congress has noted, is
essential to protect U.S. national
security.
17
The Financial Action Task
Force (FATF), the intergovernmental
organization that sets the international
standards for combatting money
laundering and the financing of
terrorism and proliferation, of which the
United States is a founding member, has
set minimum standards for beneficial
ownership transparency, against which
over 200 jurisdictions are assessed.
Many countries, including the United
Kingdom and all member states of the
European Union, have incorporated
elements derived from these standards
into their domestic legal and/or
regulatory frameworks.
18
The 2016
FATF Mutual Evaluation Report of the
United States underscored the
seriousness of this deficiency as the lack
of beneficial ownership transparency
was one of the main reasons for the
United States’ failing grade regarding
the effectiveness of the transparency of
its beneficial ownership regime.
19
FATF
has also collaborated with the Egmont
Group of Financial Intelligence Units on
a study that identifies key techniques
used to conceal beneficial ownership
and identifies issues for consideration
that include coordinated national action
to limit the misuse of legal entities.
20
Furthermore, the United States and
other major economies have made
commitments to enhance beneficial
ownership transparency through the
then-Group of Eight (G8) and Group of
Twenty (G20).
21
The CTA addresses that
commitment.
C. The CTA
The CTA, which Congress enacted on
January 1, 2021, establishes a new
framework for the reporting,
maintenance, and disclosure of
beneficial ownership information to:
Set a clear federal standard for
incorporation practices;
Protect vital U.S. national security
interests;
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22
CTA Section 6402(5).
23
See 31 U.S.C. 5336(b)(5), added by CTA
Section 6403(a). How FinCEN will issue these
identifiers, whether individuals and legal entities
will use (and will need to be issued) different types
of identifiers, and whether other types of identifiers
may be useable as FinCEN identifiers are among the
issues about which the CTA is silent. This ANPRM
accordingly includes some questions relating to the
FinCEN identifier.
24
CTA Section 6402(7)(A), (8)(C). The Federal
functional regulators are the Board of Governors of
the Federal Reserve System, the Federal Deposit
Insurance Corporation, the National Credit Union
Administration, the Office of the Comptroller of the
Currency, and the Securities and Exchange
Commission, and any other federal regulator that
examines financial institutions for compliance with
the BSA. CTA Section 6003(3) (citing 15 U.S.C.
6809).
25
The CTA requires FinCEN to undertake a
separate process, subsequent to the issuance of a
final rule on legal entity beneficial ownership
reporting, to revise CDD requirements for financial
institutions in light of the new legal entity reporting
requirements. While FinCEN welcomes comments
in response to this ANPRM that address the effects
of different design choices with respect to legal
entity reporting on the ultimate shape of financial
institution CDD requirements, persons wishing to
comment on such issues should be aware that they
will have another opportunity at a later time to
comment on the revision of CDD requirements,
when FinCEN undertakes that separate process.
26
Defined at 31 U.S.C. 5336(a)(11), added by CTA
Section 6403(a).
27
Defined at 31 U.S.C. 5336(a)(3), added by CTA
Section 6403(a).
28
Defined at 31 U.S.C. 5336(a)(2), added by CTA
Section 6403(a).
29
31 U.S.C. 5336(b)(1), (2)(A), added by CTA
Section 6403(a).
30
31 U.S.C. 5336(b)(2)(A), added by CTA Section
6403(a).
31
31 U.S.C. 5336(a)(3), added by CTA Section
6403(a). The definition contains certain exceptions,
including, under certain circumstances: (i) Minors
whose parent or guardian file their own beneficial
ownership information; (ii) individuals who act as
nominees, intermediaries, custodians, or agents;
(iii) individuals acting solely as employees of an
entity; (iv) individuals with interests through rights
of inheritance; and (v) individuals who are
creditors. See 31 U.S.C. 5336(a)(3)(B), added by
CTA Section 6403(a).
32
31 U.S.C. 5336(a)(11)(B), added by CTA Section
6403(a). The definition of reporting company
specifically exempts 24 categories of entities,
including certain types of registered entities (e.g.,
various companies registered under federal
securities laws and the Commodity Exchange Act,
FinCEN-registered money transmitters, and
registered public accounting firms); banks; credit
unions; public utility companies; certain tax
exempt entities; entities with specified levels of
operations in the United States; entities owned or
controlled by other entities that qualify for one of
several other specified exemptions; and certain
kinds of dormant entities, among others. The
Secretary, with the concurrence of the Attorney
General and the Secretary of Homeland Security,
may by regulation also exempt additional categories
of entities.
33
31 U.S.C. 5336(b)(2)(A)(iv), (b)(3), added by
CTA Section 6403(a).
34
31 U.S.C. 5336(a)(6), (b)(2)(A)(iv), (b)(3), added
by CTA Section 6403(a).
35
31 U.S.C. 5336(c)(1), added by CTA Section
6403(a); CTA Section 6402(7).
36
31 U.S.C. 5336(c)(2)(A), added by CTA Section
6403(a).
37
31 U.S.C. 5336(c)(2)(B)(i)(I), added by CTA
Section 6403(a).
38
31 U.S.C. 5336(c)(2)(B)(i)(II), added by CTA
Section 6403(a).
39
31 U.S.C. 5336(c)(2)(B)(ii), added by CTA
Section 6403(a).
40
31 U.S.C. 5336(c)(2)(B)(iii), added by CTA
Section 6403(a).
Protect interstate and foreign
commerce;
Better enable critical national
security, intelligence, and law
enforcement efforts to counter money
laundering, the financing of terrorism,
and other illicit activity; and
Bring the United States into
compliance with international AML/
CFT standards.
22
Section 6403 of the
CTA amends the BSA by adding a new
section at 31 U.S.C. 5336 that requires
the reporting of beneficial ownership
information at the time of formation or
registration, along with protections to
ensure that the reported beneficial
ownership information is maintained
securely and accessed only by
authorized persons for limited uses. The
CTA requires the Secretary to
promulgate implementing regulations
that prescribe procedures and standards
governing the reporting and use of such
information, to include procedures
governing the issuance of ‘‘FinCEN
identifiers’’ for beneficial ownership
information reporting.
23
The CTA
requires FinCEN to maintain beneficial
ownership information in a secure, non-
public database that is highly useful to
national security, intelligence, and law
enforcement agencies, as well as federal
functional regulators.
24
Through this ANPRM, FinCEN seeks
input on how best to implement the
reporting requirements of the CTA, as
well as the CTA’s provisions regarding
FinCEN’s maintenance and disclosure of
reported information, from regulated
parties; the governments of the states,
U.S. possessions, local jurisdictions,
and Indian tribes; law enforcement;
regulatory agencies; other consumers of
BSA data; and any other interested
parties. FinCEN sets forth below specific
questions based upon the statutory
requirements and welcomes comments
on any other issues relevant to the
implementation of the CTA.
25
III. Requirements of the CTA
In general, the CTA requires a
reporting company
26
—in accordance
with rules to be issued by FinCEN—to
submit to FinCEN information that
identifies the beneficial owner(s)
27
and
applicant(s)
28
of the reporting
company.
29
Specifically, reporting
companies must report, for each
identified beneficial owner and
applicant, the following information: (i)
Full legal name; (ii) date of birth; (iii)
current residential or business street
address; and (iv) a unique identifying
number from an acceptable
identification document or the
individual’s FinCEN identifier.
30
The CTA defines a beneficial owner of
an entity as an individual who, directly
or indirectly, through any contract,
arrangement, understanding,
relationship, or otherwise (i) exercises
substantial control over the entity, or (ii)
owns or controls not less than 25
percent of the ownership interests of the
entity.
31
The CTA defines a reporting
company as a corporation, LLC, or other
similar entity that is (i) created by the
filing of a document with a secretary of
state or a similar office under the law of
a state or Indian tribe, or (ii) formed
under the law of a foreign country and
registered to do business in the United
States by the filing of a document with
a secretary of state or a similar office
under the laws of a state or Indian tribe.
The CTA exempts certain categories of
entities from the reporting
requirement.
32
The CTA also requires that FinCEN
issue a ‘‘FinCEN identifier’’ to an
individual or entity that has submitted
the required beneficial ownership
information, if the individual or entity
so requests.
33
A FinCEN identifier is to
be a unique identifier for each
individual or entity that may be used for
subsequent reporting to FinCEN in lieu
of providing certain other information.
34
The CTA requires FinCEN to maintain
the reported beneficial ownership
information in a secure, non-public
database for not fewer than five years
after the date on which the reporting
company terminates.
35
The CTA prohibits the unauthorized
disclosure of beneficial ownership
information collected by FinCEN,
including authorized recipients’
subsequent disclosures for unauthorized
purposes.
36
Pursuant to the CTA,
FinCEN may disclose beneficial
ownership information upon receipt of:
(i) A request, through appropriate
protocols, from a federal agency engaged
in national security, intelligence, or law
enforcement activity, for use in
furtherance of such activity;
37
(ii) a
request, through appropriate protocols,
from a non-federal law enforcement
agency with specified court
authorization;
38
(iii) a request from a
federal agency on behalf of certain
foreign requestors under specified
conditions;
39
(iv) a request by a
financial institution subject to CDD
requirements, with the consent of the
reporting company, to facilitate
compliance with CDD requirements
under applicable law;
40
and (v) a
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31 U.S.C. 5336(c)(2)(B)(iv), added by CTA
Section 6403(a).
42
31 U.S.C. 5336(c)(5), added by CTA Section
6403(a).
43
31 U.S.C. 5336(b)(5), added by CTA Section
6403(a).
44
31 U.S.C. 5336(b)(4)(A), added by CTA Section
6403(a).
45
31 U.S.C. 5336(b)(1)(A)–(C), (2)(A), added by
CTA Section 6403(a).
46
31 U.S.C. 5336(b)(1)(D), (3)(A)(ii), added by
CTA Section 6403(a).
47
31 U.S.C. 5336(b)(1)(B), (2)(D), (2)(E), added by
CTA Section 6403(a).
48
31 U.S.C. 5336(c)(2)(C), added by CTA Section
6403(a).
49
31 U.S.C. 5336(c)(3), added by CTA Section
6403(a)).
50
31 U.S.C. 5336(h)(3)(C), added by CTA Section
6403(a).
51
31 U.S.C. 5336(g), added by CTA Section
6403(a).
52
31 U.S.C. 5336(b)(1)(F), added by CTA Section
6403(a). FinCEN anticipates that fulfillment of these
requirements will involve in-depth engagement
with federal as well as state, local, and tribal
government agencies.
request by a Federal functional regulator
or other appropriate regulatory agency
under certain circumstances.
41
The CTA
also authorizes officers and employees
of the Department of the Treasury to
access beneficial ownership information
consistent with their official duties and
subject to procedures and safeguards
prescribed by the Secretary.
42
The CTA requires the Secretary to
promulgate regulations prescribing
procedures and standards governing
beneficial ownership reporting and the
FinCEN identifier by January 1, 2022.
43
These regulations will specify a
subsequent effective date, which will be
informed by information received
pursuant to the notice and comment
process. FinCEN intends to provide a
reasonable timeframe for stakeholders to
implement the regulations.
The regulations promulgated pursuant
to the CTA are required to specify
certain procedures, methods, and
standards. Some of these specifications
must be included in the regulations that
are to be promulgated within a year of
the CTA’s enactment:
Prescribing procedures and
standards governing reporting of
beneficial ownership information and
any FinCEN identifier;
44
Specifying the information required
to be reported and the reporting
method;
45
Specifying the method for reporting
changes in beneficial ownership (for
both entities and persons holding
FinCEN identifiers);
46
and
Specifying reporting requirements
for exempt subsidiaries and exempt
grandfathered entities that cease to be
exempt.
47
Others do not have to be included in the
CTA regulations required by January 1,
2022, but the specific requirements of
the reporting regulations that must be
finalized by that date may affect these
other specifications:
The form and manner in which
information shall be provided by
FinCEN to a financial institution for
CDD, and to certain regulatory agencies
for certain purposes;
48
Protocols to protect the security and
confidentiality of beneficial ownership
information, to include obligations on
requesting agencies;
49
and
Establishment of a safe harbor for
persons seeking to amend previously
submitted but inaccurate beneficial
ownership information.
50
Further, the CTA requires the Secretary
to take certain actions in developing
these regulations. This includes an
obligation to reach out to members of
the small business community and other
appropriate parties to ensure efficiency
and effectiveness of the process for the
entities subject to the requirements of
the CTA.
51
Additionally, in
promulgating the required regulations
prescribing procedures and standards
governing reporting of beneficial
ownership information and any FinCEN
identifier, the CTA requires FinCEN, to
the greatest extent practicable, to:
Establish partnerships with State,
local, and Tribal governmental agencies;
Collect required identity
information of beneficial owners
through existing federal, state, and local
processes and procedures;
Minimize burdens on reporting
companies associated with the
collection of the required information,
in light of the private compliance costs
placed on legitimate businesses,
including by identifying any steps taken
to mitigate the costs relating to
compliance with the collection of
information; and
Collect the required information in
a form and manner that ensures the
information is highly useful in (a)
facilitating important national security,
intelligence, and law enforcement
activities, and (b) confirming beneficial
ownership information provided to
financial institutions in order to
facilitate financial institutions’
compliance with AML, CFT, and CDD
requirements under applicable law.
52
IV. Questions for Comment
FinCEN invites comments on all
aspects of the CTA, but specifically
seeks comments on the questions listed
below. FinCEN encourages commenters
to reference specific question numbers
to facilitate FinCEN’s review of
comments.
Definitions
(1) The CTA requires reporting of
beneficial ownership information by
‘‘reporting companies,’’ which are
defined, subject to certain exceptions, as
including corporations, LLCs, or any
‘‘other similar entity’’ that is created by
the filing of a document with a secretary
of state or a similar office under the law
of a state or Indian tribe or formed
under the law of a foreign country and
registered to do business in the United
States by the filing of such a document.
a. How should FinCEN interpret the
phrase ‘‘other similar entity,’’ and what
factors should FinCEN consider in
determining whether an entity qualifies
as a similar entity?
b. What types of entities other than
corporations and LLCs should be
considered similar entities that should
be included or excluded from the
reporting requirements?
c. If possible, propose a definition of
the type of ‘‘other similar entity’’ that
should be included, and explain how
that type of entity satisfies the statutory
standard, as well as why that type of
entity should be covered. For example,
if a commenter thinks that state-
chartered non-depository trust
companies should be considered similar
entities and required to report, the
commenter should explain how, in the
commenter’s opinion, such companies
satisfy the requirement that they be
formed by filing a document with a
secretary of state or ‘‘similar office.’’
(2) The CTA limits the definition of
reporting companies to corporations,
LLCs, and other similar entities that are
‘‘created by the filing of a document
with a secretary of state or a similar
office under the law of a State or Indian
Tribe’’ or ‘‘registered to do business in
the United States by the filing of a
document with a secretary of state or a
similar office under the laws of a State
or Indian Tribe.’’
a. Does this language describe
corporate filing practices and the
applicable law of the states and Indian
tribes sufficiently clearly to avoid
confusion about whether an entity does
or does not meet this requirement?
b. If not, what additional clarifications
could make it easier to determine
whether this requirement applies to a
particular entity?
(3) The CTA defines the ‘‘beneficial
owner’’ of an entity, subject to certain
exceptions, as ‘‘an individual who,
directly or indirectly, through any
contract, arrangement, understanding,
relationship, or otherwise’’ either
‘‘exercises substantial control over the
entity’’ or ‘‘owns or controls not less
than 25 percent of the ownership
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31 U.S.C. 5336(a)(11)(B)(xxiv), added by CTA
Section 6403(a).
interests of the entity.’’ Is this
definition, including the specified
exceptions, sufficiently clear, or are
there aspects of this definition and
specified exceptions that FinCEN
should clarify by regulation?
a. To what extent should FinCEN’s
regulatory definition of beneficial owner
in this context be the same as, or similar
to, the current CDD rule’s definition or
the standards used to determine who is
a beneficial owner under 17 CFR
240.13d–3 adopted under the Securities
Exchange Act of 1934?
b. Should FinCEN define either or
both of the terms ‘‘own’’ and ‘‘control’’
with respect to the ownership interests
of an entity? If so, should such a
definition be drawn from or based on an
existing definition in another area, such
as securities law or tax law?
c. Should FinCEN define the term
‘‘substantial control’’? If so, should
FinCEN define ‘‘substantial control’’ to
mean that no reporting company can
have more than one beneficial owner
who is considered to be in substantial
control of the company, or should
FinCEN define that term to make it
possible that a reporting company may
have more than one beneficial owner
with ‘‘substantial control’’?
(4) The CTA defines the term
‘‘applicant’’ as an individual who ‘‘files
an application to form’’ or ‘‘registers or
files an application to register’’ a
reporting company under applicable
state or tribal law. Is this language
sufficiently clear, in light of current law
and current filing and registration
practices, or should FinCEN expand on
this definition, and if so how?
(5) Are there any other terms used in
the CTA, in addition to those the CTA
defines, that should be defined in
FinCEN’s regulations to provide
additional clarity? If so, which terms,
why should FinCEN define such terms
by regulation, and how should any such
terms be defined?
(6) The CTA contains numerous
defined exemptions from the definition
of ‘‘reporting company.’’ Are these
exemptions sufficiently clear, or are
there aspects of any of these definitions
that FinCEN should clarify by
regulation?
(7) In addition to the statutory
exemptions from the definition of
‘‘reporting company,’’ the CTA
authorizes the Secretary, with the
concurrence of the Attorney General
and the Secretary of Homeland Security,
to exempt any other entity or class of
entities by regulation, upon making
certain determinations.
53
Are there any
categories of entities that are not
currently subject to an exemption from
the definition of ‘‘reporting company’’
that FinCEN should consider for an
exemption pursuant to this authority,
and if so why?
(8) If a trust or special purpose vehicle
is formed by a filing with a secretary of
state or a similar office, should it be
included or excluded from the reporting
requirements?
(9) How should a company’s
eligibility for any exemption from the
reporting requirements, including any
exemption from the definition of
‘‘reporting company,’’ be determined?
a. What information should FinCEN
require companies to provide to qualify
for these exemptions, and what
verification process should that
information undergo?
b. Should there be different
information requirements for operating
companies and holding companies, for
active companies and dormant
companies, or are there other bases for
distinguishing between types of
companies?
c. Should exempt entities be required
to file periodic reports to support the
continued application of the relevant
exemption (e.g., annually)?
Reporting of Beneficial Ownership
Information
(10) What information should FinCEN
require a reporting company to provide
about the reporting company itself to
ensure the beneficial ownership
database is highly useful to authorized
users?
(11) What information should FinCEN
require a reporting company to provide
about the reporting company’s corporate
affiliates, parents, and subsidiaries,
particularly given that in some cases
multiple companies can be layered on
top of one another in complex
ownership structures?
(12) Should a reporting company be
required to provide information about
the reporting company’s corporate
affiliates, parents, and subsidiaries as a
matter of course, or only when that
information has a bearing on the
reporting company’s ultimate beneficial
owner(s)?
(13) What information, if any, should
FinCEN require a reporting company to
provide about the nature of a reporting
company’s relationship to its beneficial
owners (including any corporate
intermediaries or any other contract,
arrangement, understanding, or
relationship), to ensure that the
beneficial ownership database is highly
useful to authorized users?
(14) Persons currently obligated to file
reports with FinCEN overwhelmingly
do so electronically, either on a form-by-
form basis or in batches using
proprietary software developed by
private-sector technology service
providers.
a. Should FinCEN allow electronic
filing of required information about
reporting companies (including the
termination of such companies),
beneficial owners, and applicants under
the CTA?
b. Should FinCEN allow or support
any mechanisms other than direct
electronic filing?
c. Should FinCEN allow or support
direct batch filing of required
information?
d. Should there be any differences
among the mechanisms used for
different types of information or
different types of filers?
e. Should any additional or
alternative reporting system involve the
collection of information from the states
and Indian tribes, and if so how?
f. Should the filing mechanisms for
reporting companies be different for
entities that were previously exempt for
one reason or another (including exempt
subsidiaries and exempt grandfathered
entities under section 5336(b)(2)(D) and
(E)) and lose that exemption? If so how?
(15) Section 5336(b)(2)(C) requires
written certifications to be filed with
FinCEN by exempt pooled investment
vehicles described in section
5336(a)(11)(B)(xviii) that are formed
under the laws of a foreign country.
a. By what method should these
certifications be filed?
b. What information should be
included in these certifications?
c. Should there be a mechanism
through which such filings could be
made to foreign authorities and
forwarded to FinCEN, or should such
filings have to be made directly to
FinCEN?
d. What information should be
included in these certifications (e.g.,
what information would allow
authorities to follow up on certifications
containing false information)?
e. Should these certifications be
accessible to database users, and if so,
should they be accessible on the same
terms as beneficial ownership
information of reporting companies?
(16) What burdens do you anticipate
in connection with the new reporting
requirements? Please identify any
burdens with specificity, and estimate
the dollar costs of these burdens if
possible. How could FinCEN minimize
any such burdens on reporting
companies associated with the
collection of beneficial ownership
information in a manner that ensures
the information is highly useful in
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31 U.S.C. 5336(b)(3)(A)(ii), added by CTA
Section 6403(a).
55
For example, this could happen when different
employees of the same organization, without
realizing, apply independently for a FinCEN
identifier, or when an individual applies more than
once using identity numbers from different forms of
identification mistakenly thinking it is necessary to
obtain a separate FinCEN identification for each
company of which the individual is a beneficial
owner.
facilitating important national security,
intelligence, and law enforcement
activities and confirming beneficial
ownership information provided to
financial institutions, consistent with its
statutory obligations under the CTA?
(17) Section 5336(e)(1) requires the
Secretary to take reasonable steps to
provide notice to persons of their
reporting obligations.
a. What steps should be taken to
provide such notice?
b. Should those steps include direct
communications such as mailed notices,
and if so to whom should notices be
mailed?
c. What type of information should be
included in such a notice, for example,
the purposes and uses of the data, and
how to access and correct the
information?
d. Should the notice be followed by
an explicit acknowledgement of the
reporting company, or consent of the
beneficial owner or applicant if the
owner or applicant is submitting the
information, to the handling of
beneficial ownership information as
stated in the notice and applicable law?
(18) Section 5336(e)(2) requires states
and Indian tribes, as a condition of
receiving certain funds, to have their
Secretary of State or a similar office in
each state or Indian tribe periodically
provide notice of reporting obligations
and a copy of, or internet link to, the
reporting company form created by
FinCEN.
a. How should this requirement be
implemented?
b. What form should the notice take?
c. Should this notice be provided
yearly, or on some other periodic
schedule?
(19) What should reporting companies
or individuals holding FinCEN
identifiers be required to do to satisfy
the requirement of section 5336(b)(1)(D)
that they update in a timely manner the
information they have submitted when
it changes, such as when beneficial
owners or holders of FinCEN identifiers
(i) transfer substantial control to other
individuals; (ii) change their legal
names or their reported residential or
business street addresses; or (iii) die; or
(iv) when a previously acceptable
identification document expires? For
example, should the reporting
companies or individuals be required to
file a new report, or provide notice only
of the information that has changed?
(20) Should reporting companies be
required to affirmatively confirm the
continuing accuracy of previously
submitted beneficial ownership
information on a periodic basis (e.g.,
annually)? How should such
confirmation be communicated to
FinCEN?
(21) For those reporting companies
without FinCEN identifiers, what
should be considered a ‘‘timely
manner’’
54
for updating a change in
beneficial ownership?
a. Should this period differ based on
the type of reporting company?
b. What factors should be taken into
account in determining this period?
c. How much time should reporting
companies be given to update beneficial
owner information upon a change of
ownership?
d. What are the benefits or drawbacks
of allowing a longer period to report a
change of beneficial ownership?
(22) Section 5336(h)(3)(C) contains a
safe harbor for persons who seek to
correct previously submitted but
inaccurate beneficial ownership
information pursuant to FinCEN
regulations. How should FinCEN’s
regulations define the scope of this safe
harbor? Should the nature of the
inaccuracy (e.g., a misspelled address
versus the complete omission of a
beneficial owner) be relevant to the
availability of the safe harbor?
(23) What steps should reporting
companies be required to take to
support and confirm the accuracy of
beneficial ownership information?
a. Should reporting companies be
required to certify the accuracy of their
information when they submit it?
b. If so, what should this certification
cover?
c. Should reporting companies be
required to submit copies of a beneficial
owner’s acceptable identification
document?
(24) What steps should FinCEN take
to ensure that beneficial ownership
information being reported is accurate
and complete?
a. With respect to other BSA reports,
FinCEN e-filing protocols prohibit
filings from being made with certain
blank fields, and automatically format
certain fields to ensure that letters are
not entered for numbers and vice versa,
etc. The filing protocols, however, do
not involve independent FinCEN
verification of information filed. Should
FinCEN take similar or additional steps
in connection with the filing of
beneficial ownership information?
b. If so, what similar or additional
steps should FinCEN take?
(25) Should a reporting company be
required to report information about a
company’s ‘‘applicant’’ or ‘‘applicants’’
(the individual or individuals who file
the application to form or register a
reporting company) in any report after
the reporting company’s initial report to
FinCEN? Why or why not?
FinCEN Identifier
(26) In what situations will an
individual or entity wish to use the
FinCEN identifier? How can FinCEN
best protect both the privacy interests
underlying an individual’s or entity’s
desire to use the FinCEN identifier, and
the identifying information that must be
provided to FinCEN by an individual or
entity wishing to obtain and use the
FinCEN identifier?
(27) What form should the FinCEN
identifier take?
a. How long should it be?
b. Should it be alphabetical, numeric,
or alphanumeric?
c. Should it contain embedded
information such as a filing year, a
geographic code, a sequential number,
or numbers shared among related
persons or entities, or should it be
generated independently for each
individual or entity?
d. Should it resemble or be derived
from another identifier provided by
another authority?
e. Should it resemble the document
numbers of other reports filed with
FinCEN under the BSA?
f. Should the form of FinCEN
identifiers for individuals and legal
entities be different? If so, how and
why?
(28) How can FinCEN best ensure a
one-to-one relationship between
individuals or entities and their FinCEN
identifiers, in light of the possibility that
individuals and entities may mistakenly
or intentionally attempt to apply for
more than one FinCEN identifier?
55
(29) How can FinCEN best protect
FinCEN identifiers from being used
without individuals’ and entities’
authorization? Should protections
include specific regulatory requirements
or prohibitions?
(30) As noted in the CTA, in some
cases multiple companies can be
layered on top of one another in
complex ownership structures. Given
that there may be multiple entities
within an ownership structure of a
reporting company that are identified by
FinCEN identifiers, how can FinCEN
implement the FinCEN identifier in a
way that reduces the burden to financial
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31 U.S.C. 5336(c)(2)(B)(iv), added by CTA
Section 6403(a).
institutions of using the FinCEN
database when reporting companies
with complex ownership structures seek
to open an account?
(31) What should the process be to
obtain a FinCEN identifier?
a. a) Should the FinCEN identifier be
secured by an applicant or beneficial
owner prior to filing an application to
form a corporation, LLC, or other similar
entity under the laws of a state or Indian
tribe?
b. b) How, if at all, should FinCEN
verify an individual’s identity before
providing a FinCEN identifier?
c. c) If an applicant or beneficial
owner chooses not to apply for a
FinCEN identifier, should FinCEN
create any limitations—in addition to
those in the statutory definition of
‘‘acceptable identification document’’—
on the types of unique identifying
numbers that can be submitted?
Security and use of Beneficial
Ownership and Applicant Information
(32) When a state, local, or tribal law
enforcement agency requests beneficial
ownership information pursuant to an
authorization from a court of competent
jurisdiction to seek the information in a
criminal or civil investigation, how, if at
all, should FinCEN authenticate or
confirm such authorization?
(33) Should FinCEN provide a
definition or criteria for determining
whether a court has ‘‘competent
jurisdiction’’ or has ‘‘authorized’’ such
an order? If so, what definition or
criteria would be appropriate?
(34) As a U.S. Government agency,
FinCEN is subject to strict security and
privacy laws, regulations, and other
requirements that will protect the
security and confidentiality of beneficial
ownership and applicant information.
What additional security and privacy
measures should FinCEN implement to
protect this information and limit its use
to authorized purposes, which includes
facilitating important national security,
intelligence, and law enforcement
activities as well as financial
institutions’ compliance with AML,
CFT, and CDD requirements under
applicable law? Would it be sufficient to
make misuse of such information
subject to existing penalties for
violations of the BSA and FinCEN
regulations, or should other protections
be put in place, and if so what should
they be?
(35) How can FinCEN make beneficial
ownership information available to
financial institutions with CDD
obligations so as to make that
information most useful to those
financial institutions?
a. Please describe whether financial
institutions should be able to use that
information for other customer
identification purposes, including
verification of customer information
program information, with the consent
of the reporting company?
b. Please describe whether FinCEN
should make financial institution access
more efficient by permitting reporting
companies to pre-authorize specific
financial institutions to which such
information should be made available?
c. In response to requests from
financial institutions for beneficial
ownership information, pursuant to 31
U.S.C. 5336(c)(2)(A), what is a
reasonable period within which FinCEN
should provide a response? Please also
describe what specific information
should be provided.
(36) How should FinCEN handle
updated reporting for changes in
beneficial ownership when beneficial
ownership information has been
previously requested by financial
institutions, federal functional
regulators, law enforcement, or other
appropriate regulatory agencies?
a. If a requestor has previously
requested and received beneficial
ownership information concerning a
particular legal entity, should the
requester automatically receive
notification from FinCEN that an update
to the beneficial ownership information
was subsequently submitted by the legal
entity customer?
b. If so, how should this notification
be provided?
c. Should a requesting entity have to
opt in to receive such notification of
updated reporting?
(37) One category of authorized access
to beneficial ownership information
from the FinCEN database involves ‘‘a
request made by a Federal functional
regulator or other appropriate regulatory
agency.’’
56
How should the term
‘‘appropriate regulatory agency’’ be
interpreted? Should it be defined by
regulation? If so, why and how?
(38) In what circumstances should
applicant information be accessible on
the same terms as beneficial ownership
information (i.e., to agencies engaged in
national security, intelligence, or law
enforcement; to non-federal law
enforcement agencies; to federal
agencies, on behalf of certain foreign
requestors; to federal functional
regulators or other agencies; and to
financial institutions subject to CDD
requirements). If financial institutions
are not required to consider applicant
information in connection with due
diligence on a reporting company
opening an account, for example,
should a financial institution’s terms of
access to applicant information differ
from the terms of its access to beneficial
ownership information?
Cost, Process, Outreach, and Partnership
(39) What specific costs would CTA
requirements impose—in terms of time,
money, and human resources—on small
businesses? Are those costs greater for
certain types of small businesses than
others? What specifically can FinCEN
do to minimize those costs, for all small
businesses or for some types in
particular?
(40) Are there alternatives to a single
reporting requirement for all reporting
companies that could create a less costly
alternative for small businesses?
(41) How can FinCEN best reach out
to members of the small business
community to ensure the efficiency and
effectiveness of the filing process for
entities subject to the requirements of
the CTA?
(42) Are there other business
constituencies to which FinCEN should
reach out, and if so, who are they?
(43) How can FinCEN best reach out
to financial institutions to ensure the
efficiency and effectiveness of the
process by which financial institutions
could potentially access the beneficial
ownership information held by FinCEN?
(44) What burdens would CTA
requirements impose on state, local, and
tribal governmental agencies? In
particular, what additional time, money,
and human resources would state, local,
and tribal governments have to secure
and expend—or reallocate from other
duties, and if the latter what duties
would be compromised or services
impaired? How, if at all, would any of
these burdens or allocations of time or
money vary according to the size or
other characteristics of a jurisdiction—
would smaller jurisdictions find it
easier or harder to handle the costs
associated with CTA requirements?
(45) How should FinCEN minimize
any burdens on state, local, and tribal
governmental agencies associated with
the collection of beneficial ownership
information, while still achieving the
purposes of the CTA?
(46) How can FinCEN best partner
with state, local, and tribal
governmental agencies to achieve the
purposes of the CTA?
(47) How can FinCEN collect the
identity information of beneficial
owners through existing Federal, state,
local, and tribal processes and
procedures?
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17565
Federal Register / Vol. 86, No. 63 / Monday, April 5, 2021 / Proposed Rules
a. Would FinCEN use of such
processes or procedures be practicable
and appropriate?
b. Would FinCEN use of or reliance
on existing processes and procedures
help to lessen the costs to state, local,
and tribal government agencies, or
would it increase those costs?
c. Would FinCEN use of existing
Federal, state, local, and tribal processes
and procedures help to lessen the costs
to small businesses affected by CTA
requirements, or would it increase those
costs?
(48) The process of forming legal
entities may have ramifications that
extend beyond the legal and economic
consequences for legal entities
themselves, and the reporting of
beneficial ownership information about
legal entities may have ramifications
that extend beyond the effect of
mobilizing such information for AML/
CFT purposes. How can FinCEN best
engage representatives of civil society
stakeholders that may not be directly
affected by a beneficial ownership
information reporting rule but that are
concerned for such larger ramifications?
V. Regulatory Planning and Review
This advance notice of proposed
rulemaking is a significant regulatory
action under Executive Order 12866 and
has been reviewed by the Office of
Management and Budget.
VI. Conclusion
Implementing an effective system to
identify, collect, and permit authorized
uses of beneficial ownership
information will strengthen U.S.
national security and the integrity of the
U.S. financial system, and protect
people from harm. With this ANPRM,
FinCEN seeks input on how FinCEN
should implement such a system,
consistent with the requirements of the
CTA, to maximize benefits while
minimizing burdens on reporting
companies. FinCEN seeks input from
the public on the questions set forth
above, including from regulated parties;
state, local, and Tribal governments; law
enforcement; regulators; other
consumers of BSA data; and any other
interested parties. FinCEN also
welcomes comments on all aspects of
the ANPRM and any other aspects of
implementation of the CTA. FinCEN
encourages all interested parties to
provide their views.
By the Department of the Treasury.
AnnaLou Tirol,
Deputy Director, Financial Crimes
Enforcement Network.
[FR Doc. 2021–06922 Filed 4–1–21; 8:45 am]
BILLING CODE 4810–02–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 165
[Docket Number USCG–2021–0131]
RIN 1625–AA87
Security Zone; Christina River,
Newport, DE
AGENCY
: Coast Guard, Department of
Homeland Security (DHS).
ACTION
: Notice of proposed rulemaking.
SUMMARY
: The Coast Guard is proposing
to establish a security zone for the
protection of Very Important Persons
(VIPs) as they transit by vehicle on the
route 141 bridge over the Christina
River near Newport, Delaware. The
security zone will be enforced
intermittently and only during times of
a protected VIP transit over the bridge
and will restrict vessel traffic while the
zone is being enforced. This proposed
rulemaking would prohibit persons and
vessels from entering or remaining
within the security zone unless
authorized by the Captain of the Port
Delaware Bay or a designated
representative. We invite your
comments on this proposed rulemaking.
DATES
: Comments and related material
must be received by the Coast Guard on
or before May 5, 2021.
ADDRESSES
: You may submit comments
identified by docket number USCG–
2021–0131 using the Federal
eRulemaking Portal at https://
www.regulations.gov. See the ‘‘Public
Participation and Request for
Comments’’ portion of the
SUPPLEMENTARY INFORMATION
section for
further instructions on submitting
comments.
FOR FURTHER INFORMATION CONTACT
: If
you have questions about this proposed
rulemaking, call or email Petty Officer
Jennifer Padilla, Sector Delaware Bay,
Waterways Management Division, U.S.
Coast Guard; telephone 215–271–4814,
Jennifer.L.Padilla@uscg.mil.
SUPPLEMENTARY INFORMATION
:
I. Table of Abbreviations
CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
§ Section
U.S.C. United States Code
VIPs Very Important Persons
II. Background, Purpose, and Legal
Basis
These VIP visits require the
implementation of heightened security
measures for protection of VIPs who
may travel on the route 141 bridge over
the Christina River in Newport,
Delaware. Due to the roadway passing
over the Christina River, this security
zone is necessary to protect VIPs, the
public, and the surrounding waterway.
To date in the year 2021 there have been
4 requests for security zones at this
location. As a result, the Coast Guard
had to issue numerous temporary
security zones. Continued requests for
this security zone are expected through
2024.
The purpose of this proposed
rulemaking is to protect the VIPs and
the public from destruction, loss, or
injury from sabotage, subversive acts, or
other malicious or potential terrorist
acts. The Coast Guard is proposing this
rulemaking under authority in 46 U.S.C.
70034 (previously 33 U.S.C. 1231).
III. Discussion of Proposed Rule
The Captain of the Port Delaware Bay
(COTP) is proposing to establish a
security zone for the protection of Very
Important Persons (VIPs) as they transit
by vehicle on the route 141 bridge over
the Christina River near Newport,
Delaware. This rule is necessary to
expedite the establishment and
enforcement of this security zone when
short notice is provided to the COTP for
VIPs traveling over the route 141 bridge.
The security zone is bounded on the
east by a line drawn from 39°42.55
North Latitude (N), 075°35.88West
Longitude (W), thence southerly to
39°42.50N, 075°35.87W proceeding
from shoreline to shoreline on the
Christina River in a westerly direction
where it is bounded by the South James
Street Bridge at 39°42.63N, 075°36.53
W. No vessel or person would be
permitted to enter the security zone
without obtaining permission from the
COTP or a designated representative.
The regulatory text we are proposing
appears at the end of this document.
IV. Regulatory Analyses
We developed this proposed rule after
considering numerous statutes and
Executive orders related to rulemaking.
Below we summarize our analyses
based on a number of these statutes and
Executive orders, and we discuss First
Amendment rights of protestors.
A. Regulatory Planning and Review
Executive Orders 12866 and 13563
direct agencies to assess the costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits.
This NPRM has not been designated a
‘‘significant regulatory action,’’ under
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