FinCEN is introducing a final rule to clarify when and how entities must report beneficial ownership information to FinCEN. The rule amends FinCEN’s Beneficial Ownership Information Reporting Requirements Rule, which implements Section 6403 of the Corporate Transparency Act (CTA). The CTA was enacted as part of the Anti-Money Laundering Act of 2020 (AML Act) and the National Defense Authorization Act for Fiscal Year 2021 (NDAA). The final rule outlines how entities can use an entity’s FinCEN identifier to fulfill their BOI reporting obligations under 31 CFR 1010.380.

A FinCEN identifier is a unique identifier issued to individuals who have provided FinCEN with their BOI and to reporting companies that have filed initial BOI reports. The final rule finalized the use of individual FinCEN identifiers but not the use of entity FinCEN identifiers. The CTA specifies that if an individual is or may be a beneficial owner of a reporting company by an interest held by the individual in an entity that, directly or indirectly, holds an interest in the reporting company, the reporting company may report the appropriate entity’s FinCEN identifier in lieu of providing the individual’s BOI.

FinCEN adopts the proposed rule with certain revisions, including consistent referring to the entity whose FinCEN identifier the reporting company may use as “another entity” or “the other entity” to avoid confusion with the reporting company itself. The changes aim to improve clarity and make it more likely that reporting companies will use the FinCEN identifier as intended.