Media Coverage
Source: Bloomberg Law
Media Coverage
Press Contacts: Erik Cummins, Matt Hyams, Taina Rosa, Olivia Thomas
03.03.25
After a long saga of back-and-forth regulatory decisions regarding the Corporate Transparency Act (CTA), the U.S. Department of Treasury announced on March 2 that it will not be enforced against U.S. citizens or domestic reporting companies.
The CTA requires more than 30 million US entities to file reports disclosing their beneficial owners—the individuals that own or control the entity—to Treasury’s Financial Crimes Enforcement Network. Proponents call the law a crucial tool for combating money laundering, tax evasion, drug and human trafficking, and other schemes that employ anonymous shell companies.
When serving as a senator from Florida, Secretary of State Marco Rubio originally introduced the law in 2017 alongside Sen. Ron Wyden (D-Ore.). It was enacted as part of the 2021 National Defense Authorization Act over President Donald Trump’s veto of the bill as a whole.
The boundaries of CTA enforcement have been a debate since then, said Andrew Weiner, a partner with Pillsbury’s Real Estate practice, adding that the Department of the Treasury has signaled a desire to keep the law in some form, but to revise it to mitigate adverse effects on small businesses and, based on a March 3rdannouncement, to limit it to foreign entities conducting business in the U.S.
“It’s impossible to say money laundering isn’t a problem,” Weiner said. “But what they should have done was put together something simple and then modify it. They put forth a maximal work product from day one. That elicited a high level of push-back that might have been avoided with a less aggressive approach.”