US AML Compliance — FinCEN BSA, BOI Reporting & KYC

Beneficial Ownership Information (BOI) reporting comes from the Corporate Transparency Act (CTA), but FinCEN's interim final rule of March 26, 2025 narrowed who must file. Entities formed under any US state law are now fully exempt. The obligation applies only to foreign-formed entities registered to do business in a US state, which must report their beneficial owners (individuals owning 25%+ or exercising substantial control) who are non-US persons; US-person owners need not be disclosed, and a foreign entity owned entirely by US persons is exempt. Foreign companies registered before March 26, 2025 had to file by April 25, 2025; those registered later have 30 days from when their registration takes effect. The penalty for willful non-compliance is $500/day (civil) and up to 2 years imprisonment (criminal).

Under the CTA, a beneficial owner is any individual who: (1) directly or indirectly owns or controls 25% or more of the company's ownership interests, OR (2) exercises substantial control over the company (e.g., CEO, CFO, COO, general counsel, or any individual with authority to appoint/remove senior officers or make major decisions). There is no minimum dollar threshold — a 25% LLC member must be reported. Minors, nominees, and certain intermediaries are excluded from reporting.

Each beneficial owner's report must include: full legal name, date of birth, residential address (not a PO box), and a unique identifying number from a government-issued ID (passport, driver's license) plus an image of that document. For company applicants (the person who filed the formation documents), similar information is required. FinCEN issues each beneficial owner a FinCEN identifier that can be used in future filings instead of re-submitting full information.

As of FinCEN's March 26, 2025 interim final rule, the broadest exemption is structural: every entity formed under US state law is exempt, so US-formed LLCs and C-Corps no longer file regardless of size. On top of that, the CTA's 23 enumerated exemptions still apply (large operating companies, SEC-reporting issuers, banks and credit unions, SEC-registered investment advisers, insurance companies, accounting firms, 501(c) tax-exempt entities, and others). For the foreign-formed entities that remain in scope, US-person beneficial owners are exempt from disclosure, and a foreign entity whose beneficial owners are all US persons need not report any owners at all.

FinCEN (Financial Crimes Enforcement Network) is the US Treasury bureau responsible for administering the Bank Secrecy Act (BSA). FinCEN requires financial institutions, MSBs, and certain non-financial businesses to: implement AML programs, file Suspicious Activity Reports (SARs), file Currency Transaction Reports (CTRs) for cash transactions over $10,000, maintain customer identification programs (CIP/KYC), and comply with OFAC sanctions screening. FinCEN also administers the BOI registry under the CTA.