US Treasury's financial crimes unit won't require ownership reporting from US firms

WASHINGTON (Reuters) -The U.S. Treasury Department's financial crimes unit said on Wednesday it has issued a new rule that will narrow a key element of the 2021 Corporate Transparency Act, a law aimed at combating illicit finance.

The new Financial Crimes Enforcement Network, or FinCEN, rule goes into effect on Wednesday, even as the unit receives public comment on the move, according to a notice in the Federal Register. It exempts domestic companies from requirements to provide beneficial ownership data to the government.

The move is the latest effort by the administration under Republican President Donald Trump to curtail anti-corruption efforts. The Treasury Department earlier this month said it would not enforce any penalties under the 2021 law against U.S. citizens or domestic reporting companies.

FinCEN previously laid out a plan to require certain companies to report beneficial ownership data as part of an effort by lawmakers and the Treasury Department under former President Joe Biden to crack down on corruption and money laundering.

The new rule will still require foreign reporting companies to report beneficial ownership information. For most reporting companies, the reporting deadline was March 21, according to the register notice.

"It is important to rein in burdensome regulations to the benefit of hard-working American taxpayers and small businesses," U.S. Treasury Secretary Scott Bessent said in a statement.

Beneficial owners are defined as anyone who has an ownership interest of 25% or more in a business, a majority of voting ownership, or someone who exerts "substantial control" over the entity.

The unit is asking for public comments on the rule by May 27.

(Reporting by Chris Prentice in New York and David Lawder in Washington; Editing by Nia Williams)