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Business Groups Oppose “Beneficial Ownership” Reporting Requirement Amendment

Tue, June 30, 2020 2:32 PM | Anonymous member (Administrator)

CIRT joined an effort of business organizations lead by NFIB opposed to the Crapo-Brown amendment requiring “beneficial ownership” reporting requirements to the National Defense Authorization Act (NDAA). The amendment requires small businesses with 20 or fewer employees and $5 million or less in gross receipts to report personally-identifiable information of “beneficial ownership” (individuals who own 25% or more of an entity or individuals who directly or indirectly exercise substantial control of an entity) to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Although aimed at smaller entities the proposed new requirements, that are substantially similar to the H.R. 2513, the Corporate Transparency Act of 2019 which passed the House in October and S. 2563, the ILLICIT CASH Act, which has yet to receive consideration in the Senate; set a bad “precedent” with respect to more intrusive and burdensome mandates.  

The amendment intends to combat money laundering, but imposes a duplicative reporting burden on businesses as they try to recover from an unprecedented economic and public health crises. Small business owners already submit this information to financial institutions, where it is protected by a subpoena. It also risks small business owner privacy as local, state, tribal, and federal law enforcement agencies would have access to this information through requests, eliminating the subpoena protection. Essentially, this amendment intends to shift the reporting burden from financial institutions to small businesses and eliminates privacy protections. [For details see Coalition Letter].


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