1. The Bill requires all applicants (both U.S. and non-U.S. entities and individuals) who are to form or register to do business as a corporation or LLC in the United States to disclose information on the beneficial owners of such corporation or LLC to the Financial Crimes Enforcement Network of the Department of the Treasury (the “FinCEN”).
   1. Pursuant to the Bill, a beneficial owner is defined as a natural person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise: (i) exercises substantial control over a corporation or LLC, (ii) owns 25 percent or more of the equity interests of a corporation or LLC, or (iii) receives substantial economic benefits from the assets of a corporation or LLC. As currently drafted, the Bill does not provide a clear threshold to determine substantial control or substantial economic benefits.

   2. Corporations or LLCs established prior to the enactment of the Bill will be required to comply with the disclosure requirements starting from the second anniversary of the Bill’s enactment.

   3. The Bill also provides exemptions from the filing requirement. A detailed list of the exempted entities can be found at: https://www.congress.gov/bill/116th-congress/house-bill/2513/text.

2. The information to be filed with FinCEN pursuant to the Bill includes the beneficial owner’s: (i) full legal name, (ii) date of birth, (iii) current residential or business street address; and, (iv) unique identifying number from a non-expired passport issued by the United States or a foreign jurisdiction, a non-expired personal identification card, or a non-expired driver’s license. Those who provide a passport issued by a foreign jurisdiction would also be asked to provide: (A) a legible and credible copy of the pages of the non-expired foreign passport bearing a photograph, date of birth, and unique identifying information of the beneficial owner, and (B) a written certification issued by a person residing in the State or Indian country under the Indian Tribe jurisdiction forming the relevant entity certifying the document provided under (A).

3. The information filed with FinCEN will not be available to the public but will be accessible by federal and state law enforcers, including the FBI, the IRS, the United States Department of Justice. Financial Institutions, subject to its receipt of customer consent, may also request for such information to fulfill their due diligence obligations as required under applicable regulations.

We will provide further updates on the Bill’s progress in United States Congress.

Please feel free to let us know if you have any questions regarding the Bill.

The contents of this newsletter are for reference only and do not constitute legal advice.