U.S. Treasury relaxes reporting rules for small businesses

The U.S. Department of Treasury has changed a rule regarding small business owner reporting. This rule was part of the Corporate Transparency Act, which was designed to fight crime linked to hidden companies. The original plan required millions of businesses to share details about their "beneficial owners." The rule was supposed to start on March 21 but faced delays. On that date, the Financial Crimes Enforcement Network (FinCEN) announced that U.S. citizens and companies are now exempt from this reporting requirement. This means only a small number of businesses, mostly foreign, will need to report their owner's information. Legal experts are concerned that this change weakens the original intent of the law. Erin Bryan, a partner at a law firm, stated that many shell companies will now avoid reporting, making it easier for criminals to abuse the system. Currently, only about 20,000 entities will be affected, down from an earlier estimate of 32.6 million. The policy change aligns with a push for fewer regulations by the Trump administration. FinCEN's director highlighted that the department reevaluated the need for owner information against the burdens of collecting it. While foreign companies still have some reporting requirements, the new rule allows many to operate without revealing beneficial owners. Critics, such as Scott Greytak from Transparency International, argue this opens doors for crime and makes it harder to track illicit activities.