FinCEN and the U.S. Treasury Department Suspend CTA Enforcement – Forthcoming Rule to Narrow CTA Compliance to Foreign Reporting Companies and Extend Deadlines

Further to FinCEN’s announcement, on March 2, 2025, the U.S. Treasury Department (the “Treasury Department”) announced that even after the forthcoming rule changes take effect, it will not enforce the CTA against U.S. citizens or domestic reporting companies. The Treasury Department plans to issue a proposed rulemaking to narrow the scope of the CTA’s requirements to foreign reporting companies only.

Under current guidelines, a domestic reporting company is an entity created by the filing of a document with a secretary of state or any similar office in the United States. A foreign reporting company is an entity formed under the law of a foreign country that has registered to do business in the United States by the filing of a document with a secretary of state or any similar office.

FinCEN also stated that it plans to solicit public comments on potential revisions to existing BOI reporting requirements, as part of a notice of proposed rulemaking expected to be issued later this year. The agency will consider those comments for various purposes, including in the process of determining whether, and if so, what modifications should be made to the BOI reporting deadlines.

Previously, FinCEN had extended the BOI reporting deadline from January 1, 2025 to March 21, 2025. However, with these latest announcements by FinCEN and the Treasury Department, enforcement of the CTA’s reporting requirements is once again on hold.

Accordingly, clients with only domestic reporting companies may assume the CTA will not apply to such domestic entities unless there is a significant change in guidance from the March 2^nd Treasury Department notice. Clients with foreign reporting companies should gather all necessary information and be prepared to file reports for such foreign entities following announcement of the interim final rule later this month.

We will continue to monitor developments related to the CTA and will update our clients as appropriate. We also encourage our clients to contact their V&E client coverage teams to discuss ongoing compliance with the CTA.

Disclaimer: This update was prepared as of March 4, 2025, and is subject to change as further guidance on the CTA develops. This is only a summary of a complex regulatory system and is not legal advice. Specific questions regarding the CTA should be directed toward your V&E relationship attorney.