By Fatima Hussein
WASHINGTON (AP) – The US Treasury Department has announced it will not enforce small Biden-era business rules aimed at curbing money laundering and shell company formations.
In a Sunday evening announcement, the Treasury Department said in a news release that it would not impose current or future fines if companies fail to register in the agency’s useful ownership information database created during the Biden administration.
Despite efforts by small businesses to overdo the court rules, it remains in effect.
On Sunday, President Donald Trump praised the suspension of rules on a true social media site, saying the database was “outrageous invasive.”
“The Biden rules were an absolute disaster for small businesses across the country,” he said. “The economic threat of Boi’s reporting will soon go away.”
Database supporters have raised the alarm.
“One tweet contradicts the administration’s 15 years of bipartisan work by Congress and ends the tragedy of anonymous shell companies,” said Ian Gary, executive director of the FACT Coalition, advocacy group for government and business transparency.
In September 2022, the Treasury began creating rules to create a database containing personal information about at least 32 million US companies’ owners as part of its efforts to combat shell companies’ formations and illegal finances.
The rules required that as of January 1, 2024, most American companies with fewer than 20 employees be registered with the government with most American companies with fewer than 20 employees. SMEs are targeted because shell companies, often used to hide illegally acquired assets, tend to have fewer employees.
Finance officials, including former Treasury Secretary Janet Yellen, said the regulatory burden would be low and cost around $85 per business, but said it would provide benefits to law enforcement agencies seeking to track money launderers and other offenders. She said in January 2024 that over 100,000 companies had submitted useful ownership information to the Treasury.
Rules and their legislative authorities – The Corporate Transparency Act, an anti-money laundering image passed in 2021, is plagued by lawsuits. In 2022, a small business lobbying group sued to block the Ministry of Finance’s requirement that tens of millions of small businesses register with the government. On February 27, the Ministry of Finance’s Financial Crimes and Enforcement Network said it would not take enforcement action against companies that do not submit useful ownership data to the institution.
Business leaders cite privacy and security concerns about databases, saying it is overlapping for other government agencies that maintain their corporate databases.
“It’s a common sense victory,” Treasury Secretary Scott Bescent said Sunday. “Today’s actions are part of President Trump’s bold agenda to unleash America’s prosperity by curbing burdensome regulations, particularly for small and medium-sized businesses, which are the backbone of the American economy.”
Original issue: March 3, 2025 11:30am EST
