For years, the US financial system has served as a major destination for dirty money, due to glaring gaps and loopholes in the federal regulatory apparatus. The Corporate Transparency Act (CTA), introduced in 2020, was designed to close the gaps by establishing national standards to combat illicit finance and money laundering — bringing the United States up to speed with the rest of the world.
Before it could go into effect, however, the Trump administration announced last month that it would halt any enforcement of its beneficial ownership reporting requirements against US citizens or domestic companies, rendering it effectively moot.
This is not the first hurdle that the CTA has faced. Originally passed as part of the 2021 National Defense Authorization Act — legislation that then president Trump vetoed before Congress overrode him — the CTA came into effect on January 1, 2024, with its first reporting deadline set for January 1, 2025. That deadline was later extended to March 21, 2025, due to ongoing arguments concerning its constitutionality.
In the meantime, the Trump administration has simply decided to not enforce the law. The interim final rule published on March 21 effectively exempts over 99 percent of companies from obligations to report beneficial ownership — the individuals who ultimately control a company — undermining the law’s entire purpose. Instead of deterring financial crime, the revised policy practically rolls out the red carpet for criminals to set up anonymous shell companies in the United States and run wild.
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Auteur: Casey Wetherbee
