The US Supreme Court overturned last week (23 January) an injunction blocking the implementation of the Corporate Transparency Act (CTA).
Aimed at combatting the use of shell companies for money laundering and tax avoidance, the CTA requires millions of US companies to disclose information on their beneficial owners to the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN).
The law’s reporting requirements came into effect in 2024, with the first mandatory disclosures due to be filed at the start of this year.
However, last month a Federal Court ruled in favour of a nation-wide injunction to prevent FinCEN from enforcing these disclosure requirements. The Supreme Court ruled in favour of the US government’s appeal to overturn this injunction.
Despite this ruling, the CTA reporting requirements have not come into effect. In a separate case, Judge Jeremy Kernodle has introduced a nationwide preliminary injunction against the law.
Following the ruling, FinCEN confirmed that beneficial ownership reporting is not “currently required” and companies are not subject to liability while Kernodle’s ruling remains in force.
Companies:Financial Crimes Enforcement Network
