US AML Compliance — FinCEN BSA, BOI Reporting & KYC

Beneficial Ownership Information (BOI) reporting flows from the Corporate Transparency Act (CTA), but FinCEN's interim final rule of March 26, 2025 sharply narrowed who files: companies formed under any US state law are now fully exempt. The obligation stays with foreign-formed entities registered to do business in a US state. They report to FinCEN the beneficial owners — 25%+ ownership or substantial control — who are non-US persons; US-person owners are not disclosed, and a foreign entity owned entirely by US persons is exempt. Those registered before March 26, 2025 filed by April 25, 2025; later ones have 30 days from when their registration takes effect. Willful non-compliance: $500/day in civil penalty and up to 2 years imprisonment.

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

For each beneficial owner: full legal name, date of birth, residential address (not a PO box), and a unique number from a government-issued ID (passport, driver's license) plus an image of that document. The same goes for the company applicant, the person who filed the formation documents. FinCEN issues each beneficial owner a FinCEN identifier: on later filings it replaces re-submitting the full information.

Since 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; a foreign entity whose beneficial owners are all US persons reports none at all.

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