S. 1995: FinCEN–SBA Coordination on Beneficial Ownership Registration Act

The FinCEN–SBA Coordination on Beneficial Ownership Registration Act (S. 1995) is a legislative proposal that aims to enhance the coordination between two federal entities: the Financial Crimes Enforcement Network (FinCEN) and the Small Business Administration (SBA). The primary purpose of this bill is to ensure that small businesses are properly informed about beneficial ownership reporting requirements to help combat illicit activities, including money laundering and terrorism financing. Here’s a breakdown of key elements from the bill:

1. Purpose and Background

The bill acknowledges that some individuals hide their ownership of businesses to engage in illegal activities. To mitigate this, it asserts that federal legislation is necessary to:

• Establish a clear federal standard for business formation practices.
• Protect U.S. national security interests.
• Facilitate interstate and foreign commerce.
• Support law enforcement efforts against various illicit activities.
• Align the U.S. with international anti-money laundering standards.

2. Memorandum of Understanding

Upon enactment of the bill, FinCEN and the SBA Administrator are required to:

• Meet within 30 days to discuss a memorandum of understanding (MOU).
• Finalize the MOU within 90 days, detailing how they will work together.

The MOU should include:

• Dissemination of beneficial ownership information to reporting companies and trade associations.
• Providing information in multiple languages (including English and Spanish).
• Linking relevant FinCEN webpages on the SBA's website.
• A plan to address scams related to beneficial ownership reporting.
• Hosting educational town halls and webinars.

3. Ongoing Collaboration and Reports

The Director of FinCEN and the Administrator of the SBA must meet every six months to review coordination issues and challenges in achieving compliance with beneficial ownership requirements. They are also required to submit regular reports to Congress to document:

• Actions taken to assist non-compliant reporting companies.
• Number of companies receiving assistance or information.
• Compliance rates among reporting companies.

4. Definitions

The bill includes several definitions essential for its implementation such as:

• Beneficial ownership requirements: Refers to the legal obligations under federal law to disclose beneficial ownership information.
• Covered agencies: Refers to both FinCEN and the SBA.
• Reporting company: Represents businesses required to report beneficial ownership information.

Relevant Companies

None found.