California Attorney General Rob Bonta today joined a bipartisan coalition of attorneys general in urging the U.S. Treasury Department Federal Treasury Bureau to enable state, local, and tribal entities to have appropriate and timely access to corporate ownership information, which is critical to fight crime and terrorism. The letter, signed by 42 attorneys general was sent to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury, outlining the need for non-federal entities to access information without unnecessary and burdensome requirements.
“There is simply no reason to make it more difficult for law enforcement entities to access corporate information that could help further efforts to protect public safety,” said Attorney General Bonta. “The California Department of Justice frequently uses FinCEN tools to identify entities engaging in organized crime and illicit behavior. Creating additional roadblocks will only impede our investigations and put the public in harm's way.”
The creation of a national database is part of the Corporate Transparency Act passed in 2021 and would require most corporations, limited liability companies, and other entities created in or registered to do business in the United States to disclose their actual, or “beneficial,” owners to FinCEN. This tool would help law enforcement stop criminal actors, including oligarchs, kleptocrats, drug traffickers, human traffickers, and those who would use anonymous shell companies to hide their illicit proceeds.
However, FinCEN’s proposed requirements limiting access to the database by state, local and tribal entities would impede investigations. In particular, the Corporate Transparency Act requires only that state, local, and tribal entities obtain a court order authorizing access to the database. The new proposed regulations, however, would require non-federal entities to provide a separate written justification to FinCEN, thus permitting the bureau to second guess the judgment of the authorizing court before allowing access to the database information. The letter notes that the requirement is inconsistent with Congress’ decision to create the database to provide rapid access to beneficial ownership information.
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