On February 7, AGC filed comments to the Financial Crimes Enforcement Network (FinCEN) regarding proposed regulations to implement legislation passed in 2020 called the Corporate Transparency Act. The legislation would require legal entities with fewer than 20 employees and less than $5 million in gross revenue to submit “beneficial ownership information” to FinCEN. Beneficial owners are defined in the statute as anyone who owns at least 25 percent of a company, or exercises “substantial control” over its operations. AGC opposed the Corporate Transparency Act when it was considered in Congress due to the potential for the unauthorized disclosure of sensitive information—and any associated identity theft and/or cybercrime—and the potential for the owners of construction firms to be fined and/or imprisoned for failing to furnish this information in a timely manner.
The proposed regulations actually went further than the statute both in the amount of information FinCEN would require to be submitted (expanding the list to include both residential and street addresses, a Taxpayer Identification Number (TIN), and other information), and the number of people required to submit the information (such as all the senior officers of a corporation). AGC submitted comments noting that the proposed regulations exceeded FinCEN’s statutory authority and would increase the potential for identity theft and made a number of suggested improvements.
If you have any questions or need additional information about the new beneficial ownership disclosure law, please contact Matthew Turkstra, Sr. Director of Building and Infrastructure Finance at (202) 547-4733, or firstname.lastname@example.org.