US companies may already be familiar with the requirements to report ownership of foreign bank accounts they own directly or through their foreign subsidiaries. The database operated by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) through the filing of the Form 114 (often referred to as the FBAR form - Report of Foreign Bank and Financial Account) will be expanded to include the reporting of the beneficial ownership of all US corporations.

The proposed legislation is part of the annual defense budget authorization bill. The Anti-Money Laundering Act of 2020 will eliminate the requirement for banks to act as information-collecting middlemen between companies and law enforcement, potentially lowering their cost of compliance. This will change the procedures that banks must follow under previous KYC and AML rules, and will now require additional filings by US companies to FinCEN besides the FBAR reports. This does not necessarily require a reporting of US bank accounts as it does for foreign bank accounts, but FinCEN is then expected to set up rules that will allow it to increase communications with the banks and law enforcement concerning notifications to Treasury about “suspicious activity reports”.

While President Trump has threated to veto the annual defense authorization bill because of concerns related to another issue, this bill has normally passed each year because of bipartisan support and has, in fact, passed the House with a veto-proof majority earlier this week.

Look for changes in this area to impact the filing requirements for all US companies with foreign bank accounts. If you have a question about this issue, please contact your MDM advisor or click here.

Thank you.

Gus Sinclair, Co-Author