31 U.S.C. § 5336 — Beneficial ownership information reporting requirements

(a) Definitions.—In this section:
(1) “Acceptable identification document” means, for an individual: (A) an unexpired U.S. passport; (B) an unexpired identification document issued by a State, local government, or Indian Tribe to identify that individual; (C) an unexpired State driver’s license; or (D), if the individual has none of those documents, an unexpired foreign passport.
(2) “Applicant” means an individual who: (A) files an application to form a corporation, limited liability company, or similar entity under State or Indian Tribe law; or (B) registers, or files an application to register, a foreign-formed corporation, limited liability company, or similar entity to do business in the United States by filing with a State or Indian Tribe secretary of state or similar office.
(3) “Beneficial owner” means, for an entity, an individual who directly or indirectly, through a contract, arrangement, understanding, relationship, or otherwise: (A)(i) exercises substantial control over the entity; or (ii) owns or controls at least 25 percent of its ownership interests. It does not include: (B)(i) a minor child, as defined by the State where the entity was formed, if the child’s parent or guardian is reported under this section; (ii) a nominee, intermediary, custodian, or agent acting for another individual; (iii) an individual acting only as an employee whose control or economic benefits come only from that employment; (iv) an individual whose only interest comes through inheritance; or (v) a creditor, unless the creditor meets subparagraph (A).
(4) “Director” means the Director of FinCEN. (5) “FinCEN” means the Financial Crimes Enforcement Network of the Department of the Treasury. (6) “FinCEN identifier” means the unique identifying number FinCEN assigns under this section. (7) “Foreign person” means a person who is not a “United States person,” as defined in Internal Revenue Code section 7701(a). (8) “Indian Tribe” has the meaning in section 102 of the Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 5130). (9) “Lawfully admitted for permanent residence” has the meaning in section 101(a) of the Immigration and Nationality Act (8 U.S.C. 1101(a)).
(10) “Pooled investment vehicle” means: (A) an investment company defined in Investment Company Act section 3(a); or (B) a company that (i) would be an investment company under that section but for the exclusion in paragraph (1) or (7) of section 3(c) of that Act, and (ii) is identified by its legal name by the applicable investment adviser in its Form ADV or successor form filed with the SEC.
(11) “Reporting company” means a corporation, limited liability company, or similar entity that: (A)(i) is created by filing a document with a State or Indian Tribe secretary of state or similar office; or (ii) is formed under foreign law and registered to do business in the United States by such a filing. It does not include: (B)(i) an issuer of a class of securities registered under Securities Exchange Act section 12, or required to file supplementary and periodic information under section 15(d); (ii) a U.S., Indian Tribe, State, political-subdivision, or interstate-compact entity that exercises governmental authority; (iii) a bank defined in any of the three listed banking and investment statutes; (iv) a Federal or State credit union; (v) a bank holding company or savings and loan holding company; (vi) a money-transmitting business registered under section 5330; (vii) a registered broker or dealer; (viii) a registered exchange or clearing agency; (ix) another entity registered with the SEC under the Securities Exchange Act, except those already listed in (i), (vii), or (viii); (x) an investment company or investment adviser registered with the SEC under the applicable investment-company or investment-advisers law; (xi) an investment adviser described in Investment Advisers Act section 203(l) that has filed the specified Form ADV items; (xii) an insurance company defined in Investment Company Act section 2; (xiii) a State-authorized, State-supervised insurance producer with a physical U.S. office; (xiv)(I) a registered entity under the Commodity Exchange Act, or (II) a futures commission merchant, introducing broker, swap dealer, major swap participant, commodity pool operator, commodity trading advisor, or retail foreign exchange dealer that is registered with the CFTC; (xv) a qualifying registered public accounting firm; (xvi) a public utility providing U.S. telecommunications, electricity, natural gas, or water and sewer services; (xvii) a financial market utility designated under the listed payment-supervision law; (xviii) a pooled investment vehicle operated or advised by an entity described in (iii), (iv), (vii), (x), or (xi); (xix) an organization exempt under Internal Revenue Code section 501(c) and 501(a), a section 527(a)-exempt political organization, or a section 4947(a)(1) or (2) trust; a section 501 organization that loses its exemption remains covered by this clause for 180 days after the loss; (xx) a corporation, LLC, or similar entity that exclusively assists or holds governance rights over a (xix) entity, is a United States person, is owned or controlled only by citizen or lawful-permanent-resident United States persons, and gets at least a majority of its funding or revenue from such persons; (xxi) an entity that has more than 20 full-time U.S. employees, reported more than $5 million in aggregate gross receipts or sales on the previous year’s U.S. tax returns (including receipts or sales of entities it owns or through which it operates), and has a physical U.S. office; (xxii) a corporation, LLC, or similar entity whose ownership interests are directly or indirectly owned or controlled by one or more entities listed in (i), (ii), (iii), (iv), (v), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xix), or (xx); (xxiii) a corporation, LLC, or similar entity that has existed more than one year, is not actively operating, is not directly or indirectly foreign-owned, has had no ownership change and has sent or received no more than $1,000 in the preceding 12 months (including through accounts in which it or an affiliate has an interest), and holds no assets, including ownership in another such entity; or (xxiv) an entity or class of entities that the Treasury Secretary, with written agreement from the Attorney General and Homeland Security Secretary, exempts by regulation because reporting would not serve the public interest and would not be highly useful to national-security, intelligence, or law-enforcement efforts against money laundering, terrorism financing, proliferation finance, serious tax fraud, or other crimes.
(12) “State” means every U.S. State, the District of Columbia, Puerto Rico, Northern Mariana Islands, American Samoa, Guam, U.S. Virgin Islands, and every other U.S. commonwealth, territory, or possession. (13) “Unique identifying number” means, for an individual or an entity with one member, the unique number on an acceptable identification document. (14) “United States person” has the meaning in Internal Revenue Code section 7701(a).
(b) Beneficial Ownership Information Reporting.—(1) Reporting.—(A) Under Treasury regulations, each reporting company must submit to FinCEN a report containing paragraph (2)’s information. (B) A company formed or registered before those regulations take effect must submit that report promptly and no later than two years after the effective date. (C) A company formed or registered after the regulations take effect must submit it when formed or registered. (D) Within one year after a change in paragraph (2) information, the company must timely submit an updated report. (E) In consultation with the Attorney General and Homeland Security Secretary, Treasury must review whether ownership changes should be reported sooner, weighing the law-enforcement and national-security benefit against the burden. Within two years after enactment, it must put needed changes from that review into the regulations. (F) To the greatest practicable extent, the regulations must: (i) partner with State, local, and Tribal agencies; (ii) use existing Federal, State, and local processes; (iii) reduce reporting burdens and identify steps taken to reduce compliance costs; and (iv) collect information in a form useful for national-security, intelligence, and law-enforcement work and for confirming information given to financial institutions for anti-money-laundering, terrorism-financing, and customer-due-diligence compliance. (G) Treasury must place these regulations in 31 C.F.R. part 1010 or its successor.
(2) Required information.—(A) Except as provided in (B), each report must identify every beneficial owner and applicant by full legal name, birth date, current residential or business street address, and either (I) the unique number from an acceptable identification document or (II) a FinCEN identifier under paragraph (3). (B) If an exempt entity under subsection (a)(11)(B) has or will have a direct or indirect ownership interest, the report must list only that entity’s name and need not include its other information. (C) A foreign-formed exempt pooled investment vehicle must file a written certification giving, in the same manner, identifying information for an individual with substantial control. (D) An exempt subsidiary under (a)(11)(B)(xxii) must file the paragraph (A) information when it no longer qualifies for that exemption. (E) An exempt grandfathered entity under (a)(11)(B)(xxiii) must do the same when it no longer qualifies.
(3) FinCEN identifier.—(A)(i) At an individual’s request after the individual provides paragraph (2)(A) information, or an entity’s request after it reports its beneficial ownership information, FinCEN must issue that individual or entity an identifier. (ii) The holder must file timely updates consistent with paragraph (1)(D). (iii) FinCEN may issue only one identifier to an individual or entity, including a successor entity. (B) A person required to report an individual’s information may report that individual’s identifier instead. (C) If an individual may be an owner through an entity that directly or indirectly owns the reporting company, the company may report that entity’s identifier instead of the individual’s paragraph (2)(A) information. (4) Treasury must regulate procedures and standards for reports and identifiers, minimizing duplicate burdens and ensuring information is accurate, complete, and highly useful. (5) These requirements begin when the regulations take effect; Treasury must issue them within one year after enactment. (6) Within one year after they take effect and annually for two more years, Treasury must report to Congress on the paragraph (2) procedures and standards, including how well they reduce burdens and improve accuracy and any alternatives.
(c) Retention and Disclosure by FinCEN.—(1) FinCEN must keep each reporting company’s required information for at least five years after the company ends. (2)(A) Unless this subsection and its protocols authorize it, the information is confidential and may not be disclosed by a U.S. officer or employee, a State, local, or Tribal agency officer or employee, or an officer or employee of a financial institution or regulator that received it. (B) FinCEN may disclose it only after receiving: (i)(I) a proper-protocol request from a Federal national-security, intelligence, or law-enforcement agency for that work, or (II) a State, local, or Tribal law-enforcement request authorized by a competent court for a criminal or civil investigation; (ii) a Federal-agency request for a foreign law-enforcement agency, prosecutor, judge, central authority, or equivalent under an international treaty, agreement, convention, or official request from a trusted country when none is available, responding to investigative or prosecution assistance and requiring confidentiality or limiting use to the authorized investigation, national security, or intelligence activity; (iii) a customer-due-diligence request from a covered financial institution with the company’s consent; or (iv) a request from a Federal functional regulator or other regulator meeting (C)’s requirements. (C) Treasury regulations must prescribe how information is given under (B)(iii) and make it available to a regulator that may assess, supervise, enforce, or determine the institution’s compliance; uses it only for that purpose or an authorized investigation; and agrees with Treasury to safeguard it.
(3) Treasury protocols must: (A) protect security and confidentiality; (B) require the requesting agency head personally to approve its standards and certify compliance twice a year; (C) require a secure storage system; (D) require reports on confidentiality procedures; (E) require a written certification for each authorized investigation stating compliance and why the information is relevant; (F) limit requests as much as practicable; (G) restrict access to users who work directly on the activity, need access for their duties, are trained or use trained staff, verify identity, and are authorized by agreement; (H) require auditable standardized records of every request, its reason, requester, date, and disclosures; (I) require annual agency audits and results on request; (J) require Treasury’s annual audit of agency compliance; and (K) provide other necessary safeguards. (4) An agency employee or officer who violates the protocols, including by unauthorized disclosure or use, is subject to subsection (h)(3)(B) penalties. (5) Treasury officers and employees whose duties require it may inspect or disclose the information under Treasury safeguards, including for tax administration. (6) Treasury must reject requests in the wrong form and may refuse them for failure to meet another requirement, an unlawful purpose, or other good cause. (7) Treasury may suspend or bar an agency for those grounds, including repeated or serious violations. (8) Treasury must use security protections, including encryption, consistent with title 44 standards and high-impact Federal system controls, to prevent severe or catastrophic loss of confidentiality, integrity, or availability. (9) Within one year after regulations take effect and annually for five years, Treasury must report to the Senate Banking Committee and House Financial Services Committee on each request under (B)(i)(II), including date, source, accepted/rejected/pending status, and a general reason for rejection; it may include a classified annex. (10) Within one year after regulations take effect and annually for six years, the Comptroller General must audit Treasury’s procedures, safeguards, agency-system verification, and protocol compliance, then report findings to Treasury and those committees. (11)(A) By March 31 each year for five years beginning in 2022, the Director must testify before those committees or a proper subcommittee about FinCEN, including plans, goals, and resources for implementing the Anti-Money Laundering Act of 2020; appropriation adequacy to complete duties and enforce that Act; management improvements; outreach about the new database and sharing best practices with allied or partner countries; policy recommendations for coordination among private, Federal, State, and local actors under anti-money-laundering laws; and any other appropriate matter. (B) The testimony must be unclassified but may include a classified part.
(d) Agency Coordination.—(1) Treasury must, as practicable, update the subsection (b) information by working with relevant Federal, State, and Tribal agencies. (2) Relevant agencies designated by Treasury must, as practicable and consistent with legal protections, cooperate and provide information FinCEN requests to keep an accurate, complete, highly useful database. (3) Treasury may issue regulations after consulting relevant Federal-agency heads.
(e) Notification of Federal Obligations.—(1) Treasury must reasonably notify people of their reporting duties, including through IRS and FinCEN forms or materials. (2)(A) As a condition of funds under this section, within two years after subsection (b)(4) regulations take effect, each State and Indian Tribe must require its entity-formation or registration office to do the following periodically, including at formation or registration, annual-fee assessment, license renewal, and corporate-tax assessment or renewal: (i)(I) tell filers their reporting-company duties, including filing and updating under subsection (b)(1) and (2), and (II) give them the Treasury form or an internet link; and (ii) update its websites, incorporation forms, and physical offices with those notices and a link. (B) Each notice must say it is from Treasury and is intended to prevent money laundering, terrorism financing, proliferation financing, serious tax fraud, and other financial crime through nonpublic registration of entities formed or registered to do business in the United States.
(f) No Bearer Shares.—A State- or Indian-Tribe-formed corporation, LLC, or similar entity may not issue a bearer-form certificate showing a whole or fractional interest.
(g) Regulations.—When making regulations, the Director must consult small-business members and other appropriate parties to make the process efficient and effective for covered entities.
(h) Penalties.—(1) It is unlawful to willfully: (A) give or try to give FinCEN false or fraudulent beneficial-ownership information, including a false photo or document; or (B) fail to report complete or updated information. (2) Unless authorized here, it is unlawful knowingly to disclose or use information obtained from a subsection (b) report or subsection (c) disclosure. (3)(A) A violator of (1)(A) or (B) owes the United States up to $500 for each continuing or uncorrected violation day and may be fined up to $10,000, imprisoned up to two years, or both. (B) A violator of (2) owes up to $500 per day and: (i) may be fined up to $250,000, imprisoned up to five years, or both; or (ii) if also violating another U.S. law or engaging in a pattern of illegal activity involving more than $100,000 in 12 months, may be fined up to $500,000, imprisoned up to ten years, or both. (C)(i)(I) Except under (II), no civil or criminal penalty under (A) applies if a person reasonably believes a submitted report is inaccurate and, under Treasury regulations, voluntarily and promptly, no later than 90 days after submission, files corrected information. (II) This protection does not apply if, when filing, the person intended to evade reporting and knew the information was inaccurate. (ii) FinCEN must help people file corrections. (4)(A) Treasury’s Inspector General, with Treasury, must provide public contact information for comments or complaints about notification, collection, accuracy, completeness, or timeliness. (B) The Inspector General must periodically report to Congress on those comments, complaints, investigations, and recommendations, coordinated with FinCEN, to improve notification, collection, and updating. (5)(A) After a cybersecurity breach causing substantial unauthorized access to sensitive information, the Inspector General must investigate FinCEN security practices, identify vulnerabilities as far as possible, and recommend fixes. (B) The Inspector General must report each investigation to Treasury. (C) Treasury must then decide whether the Director was responsible or directed practices that caused the breach and report findings to Congress, including whether to retain or dismiss the Director. (6) “Willfully” means voluntarily and intentionally violating a known legal duty.
(i) Continuous Review of Exempt Entities.—(1) After subsection (b)(4) regulations take effect, if Treasury determines, based on the Anti-Money Laundering Act report or other information, that an exempt entity or class has been involved in significant money laundering, terrorism financing, proliferation finance, serious tax fraud, or other financial crime abuse, Treasury must within 90 days report the reasons and administrative or legislative recommendations to the Senate Banking and House Financial Services Committees. (2) The report must be unclassified but may have a classified annex.
(j) Appropriations.—For each of the three fiscal years beginning when subsection (b)(4) regulations take effect, Congress authorizes whatever amounts FinCEN needs to carry out this section, including reasonable State compliance costs.