The Trump administration announced Sunday it will cease to enforce penalties and fines on businesses that fail to adhere to beneficial ownership financial reporting requirements under the Corporate Transparency Act, an anti-money laundering law passed by Congress in 2021. The announcement was panned by advocates, economists, and other critics who called the move an on-ramp for corruption.
The Corporate Transparency Act, a bipartisan effort, includes a rule that requires many corporations and limited liability companies to disclose information on who owns and controls a business entity (also known as the beneficial owner) to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department.
“Exciting news!” wrote Trump on Truth Social when announcing that the Treasury Department would no longer enforce the reporting rule, which he called “invasive and outrageous.”
Garbiel Zucman, a professor of economics, reposted Trump’s message on X, and wrote: “Exciting news for tax evasion and money laundering!”
Economist and author Anders Åslund reacted to the update writing, “to oppose corporate transparency is to favor corruption.”
Supporters of the Corporate Transparency Act, which has faced court challenges, argue that the policy is an important step toward reining in anonymous companies, which are the preferred vehicle for moving around illicit funds.
“God, this is grim,” weighed in author Oliver Bullough, who has written a book about global wealth and corruption. “The White House has killed the Corporate Transparency Act, which was itself a tiny first step in the marathon journey of stopping U.S. companies from being the most egregiously opaque shell structures on the planet.”
In a Monday statement, Ian Gary, executive director of the Financial Accountability and Corporate Transparency Coalition, called the move a “hollowing out” of the Corporate Transparency Act that runs counter to years of bipartisan work to “end the scourge of anonymous shell companies.”
Treasury Secretary Scott Bessent, for his part, said ceasing enforcement is a “victory for common sense,” according to a Sunday statement. “Today’s action is part of President Trump’s bold agenda to unleash American prosperity by reining in burdensome regulations, in particular for small businesses that are the backbone of the American economy,” he said. In response, Bullough, argued that Bessent doesn’t recognize that fraud “suppresses prosperity, rather than enables it.”
According to the announcement, the Treasury Department will issue a proposed rulemaking with the aim of narrowing the scope of the rule so that it solely applies to foreign reporting companies.
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