Davis Polk partner Dan Stipano discussed the Financial Crimes Enforcement Network FinCEN’s beneficial ownership reporting requirement and how its enforcement has been delayed as a result of legal challenges with CNBC.

“Most non-exempt reporting companies have not filed their initial reports, presumably because they are unaware of the requirement,” Dan noted, adding that it is “unlikely” that FinCEN would impose financial penalties “except in cases of bad faith or intentional violations.”

“In its public statements, FinCEN has made clear that its primary goal at this point is to educate the public about the requirement, as opposed to taking enforcement actions against noncompliant companies,” Dan explained. He also said that there will likely be additional court rulings that could impact reporting.

“Treasury delays deadline for small businesses to file new form to avoid risk of fines for noncompliance,” CNBC (December 26, 2024)

Copy link to share post