Treasury Suspends Enforcement of the Corporate Transparency Act: What Businesses Need to Know

​The Corporate Transparency Act (CTA), enacted in 2021, mandates that businesses disclose their beneficial ownership information to the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). This legislation aims to combat illicit financial activities by increasing corporate transparency.​

However, as of March 2, 2025, the Treasury Department announced a significant shift in its enforcement policy regarding the CTA. The department stated that it will suspend enforcement of the CTA's beneficial ownership information reporting requirements for U.S. citizens and domestic reporting companies. This means that no penalties or fines will be imposed on these entities for non-compliance under the existing regulatory deadlines. ​

Furthermore, the Treasury plans to issue a proposed rulemaking to narrow the scope of the CTA, limiting its application to foreign reporting companies only. This decision is intended to support American taxpayers and small businesses by reducing regulatory burdens. ​

This suspension has elicited mixed reactions. Advocates for small businesses have welcomed the move, citing relief from compliance complexities. Conversely, transparency and anti-corruption groups express concern that this change could increase the U.S.'s vulnerability to illicit activities, such as money laundering and terrorism financing. 

It's important to note that while the enforcement of the CTA is suspended for U.S. citizens and domestic companies, the act itself remains in effect. Businesses should stay informed about forthcoming regulatory changes to ensure compliance once new rules are established.​

As the Treasury Department moves forward with its proposed rulemaking, stakeholders are encouraged to participate in the public comment process to help shape the future of corporate transparency regulations in the United States.​