CTA Update: Department of the Treasury Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies
Client Alert | March 3, 2025
On March 2, 2025, the Department of the Treasury issued guidance announcing that it will not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners pursuant to the Corporate Transparency Act (CTA). This guidance also announces that when the Department of the Treasury issues a proposed rulemaking regarding the CTA in the future, the rulemaking “will narrow the scope of the rule to foreign reporting companies only.”[1]
Entities that may be subject to the CTA that have not filed BOI reports should consult with their CTA advisors as necessary, now that the Department of the Treasury has announced it will suspend enforcement of the penalty provisions of the CTA and will propose amendments to the reporting rule providing that it will apply only against “foreign reporting companies.”
During litigation that temporarily enjoined enforcement of the CTA from December 2024 until February 18, 2025, the Financial Crimes Enforcement Network (FinCEN) issued guidance extending the required deadlines for companies subject to the CTA to deadline to March 21, 2025 or later.[2] On February 27, 2025, FinCEN then suspended the March 21, 2025 deadline, instead stating its intention to issue an interim final rule before March 21, 2025 that will extend beneficial ownership information (BOI) reporting deadlines for those companies required to submit such information.[3] Under the 2022 Reporting Rule that instituted the CTA, “each reporting company” – both domestic and foreign – was required to file BOI information by certain deadlines.[4]
The Department of the Treasury’s latest statement on March 2 announces that the Department will propose revisions to the reporting rule “that will narrow the scope of the rule to foreign reporting companies only.”[5] As currently defined, a “foreign reporting company” is “any entity” that is “[f]ormed under the law of a foreign country”; and “[r]egistered to do business in any State or tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of a State or Indian tribe.”[6]
For additional background information, please refer to our Client Alerts issued on December 5, December 9, December 16, December 24, and December 27, 2024, January 24, 2025 February 19, and February 28, 2025.
[1] https://home.treasury.gov/news/press-releases/sb0038.
[2] https://fincen.gov/sites/default/files/shared/FinCEN-BOI-Notice-Deadline-Extension-508FINAL.pdf.
[3] https://www.fincen.gov/news/news-releases/fincen-not-issuing-fines-or-penalties-connection-beneficial-ownership.
[4] 31 C.F.R. § 1010.380(a).
[5] https://home.treasury.gov/news/press-releases/sb0038.
[6] 31 C.F.R. 1010.380(c)(ii); see also 31 U.S.C. 5336(a)(11)(A)(ii).
Gibson Dunn has deep experience with issues relating to the Bank Secrecy Act, the Corporate Transparency Act, other AML and sanctions laws and regulations, and challenges to Congressional statutes and administrative regulations.
For assistance navigating white collar or regulatory enforcement issues, please contact the authors, the Gibson Dunn lawyer with whom you usually work, or any leader or member of the firm’s Anti-Money Laundering, Administrative Law & Regulatory, Investment Funds, Real Estate, or White Collar Defense & Investigations practice groups.
Please also feel free to contact any of the following practice group leaders and members and key CTA contacts:
Anti-Money Laundering:
Stephanie Brooker – Washington, D.C. (+1 202.887.3502, [email protected])
M. Kendall Day – Washington, D.C. (+1 202.955.8220, [email protected])
David Ware – Washington, D.C. (+1 202.887.3652, [email protected])
Ella Capone – Washington, D.C. (+1 202.887.3511, [email protected])
Sam Raymond – New York (+1 212.351.2499, [email protected])
Administrative Law and Regulatory:
Stuart F. Delery – Washington, D.C. (+1 202.955.8515, [email protected])
Eugene Scalia – Washington, D.C. (+1 202.955.8673, [email protected])
Helgi C. Walker – Washington, D.C. (+1 202.887.3599, [email protected])
Matt Gregory – Washington, D.C. (+1 202.887.3635, [email protected])
Investment Funds:
Kevin Bettsteller – Los Angeles (+1 310.552.8566, [email protected])
Shannon Errico – New York (+1 212.351.2448, [email protected])
Greg Merz – Washington, D.C. (+1 202.887.3637, [email protected])
Real Estate:
Eric M. Feuerstein – New York (+1 212.351.2323, [email protected])
Jesse Sharf – Los Angeles (+1 310.552.8512, [email protected])
Lesley V. Davis – Orange County (+1 949.451.3848, [email protected])
Anna Korbakis – Orange County (+1 949.451.3808, [email protected])
White Collar Defense and Investigations:
Stephanie Brooker – Washington, D.C. (+1 202.887.3502, [email protected])
Winston Y. Chan – San Francisco (+1 415.393.8362, [email protected])
Nicola T. Hanna – Los Angeles (+1 213.229.7269, [email protected])
F. Joseph Warin – Washington, D.C. (+1 202.887.3609, [email protected])
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