Corporate Transparency Act (“CTA”) - Shifting Enforcement Landscape

Fort Lauderdale, Fla. (March 5, 2025) - The regulatory landscape surrounding the CTA continues to evolve, creating uncertainty for reporting companies. This alert provides a summary of recent developments and guidance for navigating these changes.

Key Updates

FinCEN Announces Relief from Penalties

On February 27, 2025, the Financial Crimes Enforcement Network (“FinCEN”) announced that it will neither issue fines or penalties nor take enforcement actions against companies for failing to meet current beneficial ownership information (“BOI”) reporting deadlines under the CTA. This suspension will remain in effect until new deadlines are established following the issuance of an interim final rule, expected no later than March 21, 2025.

Treasury Department Narrows CTA Enforcement

Following FinCEN’s announcement, on March 2, 2025, the U.S. Department of the Treasury declared a significant policy shift regarding the enforcement of the CTA. The Treasury stated it will not enforce penalties or fines related to BOI reporting against U.S. citizens or domestic reporting companies. Additionally, the Treasury announced plans to propose rulemaking that will limit the scope of the CTA to foreign reporting companies only. This move aims to reduce the regulatory burden on American businesses and align the CTA’s enforcement with critical national security interests.

Current Status - Enforcement Suspended, Rule Revision Pending

The CTA’s enforcement mechanisms are currently suspended. Reporting companies can still submit their BOI reports without concern for penalties. FinCEN plans to issue an interim final rule by March 21, 2025, which is expected to extend BOI reporting deadlines and adjust the scope of required reporting to focus enforcement on entities posing significant law enforcement and national security risks. Until the new rules take effect, reporting companies will not face penalties for non-compliance with existing deadlines. This temporary suspension provides a window for companies to prepare for the upcoming changes without the immediate threat of enforcement action.

For the most up-to-date information on the CTA and forthcoming regulatory adjustments, visit our firm’s website regularly. If you need assistance understanding these changes or preparing for compliance, our attorneys are well-equipped to provide guidance.

Author:

Soo-Jin Isicoff, Associate

Editors:

Jeffrey Weinstock, Partner

Jane C. Luxton, Managing Partner - Washington, D.C.