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The National Defense Authorization Act of 2021 (H.R. 6395) was enacted on January 1, 2021 (P.L. 116-283) after Congress overturned a presidential veto. The legislation includes the Corporate Transparency Act (CTA), a long-sought bipartisan addition to the anti-money laundering (AML) regime to require enhanced disclosure of beneficial ownership information for law enforcement purposes. The new provisions amend the Bank Secrecy Act in Title 31 to add strict reporting measures and confidentiality protections. Key takeaways from the legislation

  • The legislation imposes a significant reporting obligation on all US-formed corporations and LLCs, and certain foreign-owned entities doing business in the US.
  • Even for entities that will be excluded from reporting specific beneficial ownership information, the general due diligence and reporting framework creates serious potential compliance burdens.
  • Treasury/FinCEN will have to adopt implementing regulations within 12 months, which will define much of the reporting framework.