News

Treasury announces there will be no penalties or fines for failure to file CTA beneficial ownership reports and proposes to narrow scope of filing requirements to non-U.S. companies only

05 March 2025

Key takeaways

FinCEN and Treasury announce that there will be no enforcement for failure to file beneficial ownership information reports with FinCEN by the March 21 deadline.

Treasury announced intention to narrow the scope of the BOI reporting rule under the CTA to non-U.S. companies only.

After the February 18th decision by the U.S. District Court for the Eastern District of Texas in Smith v. U.S. Department of Treasury, non-exempt reporting companies were once again required to file beneficial ownership information with the Financial Crimes Enforcement Network (“FinCEN”), and FinCEN imposed a March 21st deadline for such filings. However, FinCEN and Treasury (of which FinCEN is a part) have now announced that there will be no fines, penalties or enforcement for failure to file beneficial ownership information (BOI) reports with FinCEN by March 21st and additional rulemaking with respect to deadlines and other aspects of the rule is expected to be issued before March 21st. On March 2nd, Treasury further announced that it intends to issue proposed rulemaking to narrow the scope of the BOI reporting rule under the CTA to non-U.S. companies only.

On February 27th, FinCEN announced that there will be no penalties or enforcement for failure to file BOI reports by March 21st, and FinCEN also stated that it intends to issue an interim final rule by March 21st further adjusting the deadlines and potentially changing aspects of the BOI reporting requirements themselves. A few days later, on March 2nd, the Treasury Department (of which FinCEN is a part) announced that it will not enforce any penalties or fines associated with the BOI reporting rule under existing regulatory deadlines (reinforcing FinCEN’s February 27th statement) -- and, further, for U.S. citizens, U.S. reporting companies and their beneficial owners, Treasury will also not enforce any penalties or fines after the forthcoming rule changes take effect. Treasury announced that it will be issuing a proposed rulemaking that will narrow the scope of the BOI reporting rule to foreign reporting companies only. All non-exempt reporting companies (U.S. and foreign) should continue to monitor for updates.

Foreign non-exempt reporting companies subject to the CTA BOI reporting rule (i.e., non-U.S. companies that are registered to do business in the United States) may want to continue to prepare for BOI filing requirements, though we recommend holding off on actually making the filings until the proposed or interim rules are issued with further information.

For U.S. reporting companies, given the announcement from Treasury on March 2nd, it is currently expected that the proposed rule will exempt them from BOI reporting requirements under the CTA, but developments should be monitored.

All companies should consider their unique circumstances when determining whether and when to make a BOI report filing with FinCEN. While FinCEN and Treasury have announced that there will be no penalty for failure to file, companies should consider whether they have contractual or other obligations to comply with all applicable laws and regulations (regardless of risk of enforcement).

More information is expected soon when related rulemaking is issued.

Authored by Sara Lenet, Gregory Lisa, Karen Scanna, and Bradley Kulman.

Next steps

Hogan Lovells will continue to closely monitor these issues and any associated impact on the BOI reporting deadlines. In the meantime, please reach out to any of the listed contacts for assistance in assessing the potential impact of the recent updates on your business or if you have any further questions.