Insights

Since December of last year, the status of the CTA has been in a state of perpetual flux, following a dizzying series of federal court rulings and FinCEN announcements. On February 28, 2025, we reported that FinCEN paused enforcement actions for entities required to report under the CTA’s Beneficial Ownership Information Reporting Rule (BOI Rule) until FinCEN issued an interim final rule providing new guidance regarding the BOI Rule’s requirements and associated deadlines. Then, on March 2, 2025, Treasury went a step further, indicating that it would altogether cease enforcement against U.S. citizens and domestic reporting companies for violations of the BOI Rule, explaining that it would instead issue proposed rulemaking to narrow the scope of the BOI Rule to “foreign reporting companies” only and set new reporting deadlines. 

As they have on each previous anniversary, the EU and UK released new sanctions against Russia on February 24, 2025, to mark the three-year anniversary of Russia’s full-scale invasion of Ukraine. For the first time, the United States did not do the same, electing to issue a limited set of Iran-related sanctions on the anniversary instead. The EU package was more fulsome than the UK package, including new port and airport restrictions, additional trade restrictions (including an aluminium ban), enhanced military end-user restrictions, and additional asset freezes and vessel designations.

On February 28, 2025, we reported that the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) paused enforcement actions for entities required to report under the CTA’s BOI Rule (Reporting Companies) for failure to file or update beneficial ownership information (BOI) reports by a previously-announced March 21, 2025, deadline. FinCEN had explained that the pause would last until it issued an interim final rule further updating reporting deadlines and providing new guidance around the BOI Rule’s requirements.

We previously reported that the Corporate Transparency Act’s Beneficial Ownership Information Reporting Rule (BOI Rule) was back in effect as of February 18, 2025, with a stay of the final nationwide block to enforcement. At that time, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) extended the BOI Rule’s reporting deadline until March 21, 2025 (in cases where the originally-applicable deadline had expired) for entities required to report, which includes certain entities formed or registered to do business in the United States (Reporting Companies). 

The new Trump administration is focusing intensely on “cartels” and other transnational criminal organizations, particularly in the Western Hemisphere. Many of the entities designated as FTOs today are active in Latin America and the United States, and sometimes seek to extort money or have other dealings with legitimate businesses operating in their territories. The State Department’s designation of eight such entities will not only raise the pressure on the entities designated, but also will create new risks and pressures for companies operating in areas where these FTOs are active. Below, we summarize the recent developments and the ramifications of these designations for businesses.

On February 18, 2025, a District Court judge in the Eastern District of Texas entered an order staying the last remaining nationwide injunction of the CTA’s Beneficial Ownership Information Reporting Rule (BOI Rule) in Smith v. U.S. Dep’t of the Treasury.  The BOI Rule requires certain entities formed or registered to do business in the U.S. (Reporting Companies) to report information about themselves and their natural-person beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury Department.  Following the court’s order, FinCEN issued an alert notifying Reporting Companies that the BOI Rule is back in effect with an amended deadline of March 21, 2025.

As we have previously reported, enforcement of the Corporate Transparency Act’s (the CTA) Beneficial Ownership Information Reporting rule (the BOI Rule) remains blocked nationwide as the result of an order from the U.S. District Court for the Eastern District of Texas in Smith v. U.S. Dep’t of the Treasury. On January 7, 2025, the Smith court granted a motion for preliminary injunction enjoining enforcement of the CTA against the named plaintiffs and their related entities, while also issuing a nationwide stay of the effective date of the BOI Rule. This occurred before the Supreme Court stayed a separate nationwide injunction of the CTA and stay of the BOI Rule in Texas Top Cop Shop v. McHenry.

On February 4, 2025, President Trump issued a National Security Presidential Memorandum (NSPM-2) on “Imposing Maximum Pressure on the Government of the Islamic Republic of Iran, Denying Iran All Paths to a Nuclear Weapon, and Countering Iran’s Malign Influence.” NSPM-2 directs U.S. government agencies to take a range of measures to reimpose “maximum pressure” sanctions on Iran. 

On January 23, 2025, the U.S. Supreme Court granted the Government’s application for a stay of an injunction issued by the U.S. District Court for the Eastern District of Texas in Texas Top Cop Shop. The injunction had blocked enforcement of the CTA and implementation of the related BOI Rule, which required certain entities formed or registered to do business in the U.S. (Reporting Companies) to report information about themselves and their natural-person beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury Department. The Supreme Court stayed the Texas Top Cop Shop injunction “pending the disposition of the [Government’s] appeal in the United States Court of Appeals for the Fifth Circuit and disposition of a petition for a writ of certiorari.” For more information on the events leading up to the Supreme Court’s review and decision to stay the injunction, please see our prior alerts here, here, and here.

As described in our prior client alert, on December 3, 2024, the U.S. District Court for the Eastern District of Texas issued an opinion and order  enjoining the federal government from enforcing the CTA and a rule implementing it.  The rule (BOI Rule) requires certain entities formed or registered to do business in the U.S. (Reporting Companies) to report information about themselves and their natural-person beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury that administers anti-money laundering laws.  Then, on December 13, 2024, DOJ filed an “Emergency Motion for Stay Pending Appeal” in the Fifth Circuit asking that court to stay the District Court’s injunction pending appeal, or, in the alternative, to narrow the District Court’s injunction to members of the National Federation of Independent Business.

As we discussed in our recent client alert, the U.S. District Court for the Eastern District of Texas issued an opinion and order on December 3, 2024, ("the Order") enjoining the federal government from enforcing the CTA and a rule implementing it. The rule requires certain entities formed or registered to do business in the U.S. ("reporting companies") to report information about themselves and their beneficial owners to the Financial Crimes Enforcement Network ("FinCEN"), a bureau of the U.S. Department of the Treasury.

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued an opinion and order (the Order) enjoining the federal government, including the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), from enforcing the Corporate Transparency Act (CTA) and a FinCEN rule implementing the CTA, codified at 31 C.F.R. § 1010.380) (i.e., the Reporting Rule).  The Reporting Rule requires certain entities formed or registered to do business in the U.S. (reporting companies) to report information about themselves, including personal identifiers for their natural-person “beneficial owners.”  For background on the CTA and the Reporting Rule, please see our previous client alert discussing a separate district court’s decision (National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala. Mar. 1, 2024) (NSBU) ruling the CTA unconstitutional.) 

On November 13, 2024, the U.S. Department of the Treasury’s (“Treasury’s”) Office of Foreign Assets Control (“OFAC”) updated its FAQs for insurers in a long-awaited move to modernize its published sanctions compliance guidance for the insurance industry.  None of the industry-specific FAQs had been updated since January 2015, and many had not been amended in more than 20 years, so these updates represent an important step by OFAC to ensure that its public guidance reflects the industry as it is today. 

In a recent UK Court of Appeal judgment in what is known as “the motor finance cases” (see Johnson v FirstRand Bank, Wrench v FirstRand Bank and Hopcraft v Close Brothers Limited, which appeals were all heard together), the Court has shone a spotlight on the issue of commissions paid by financiers to brokers and determined that, in some cases, they may be considered “bribes” under UK law. 

The U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) issued new guidance (“BIS Guidance”) for financial institutions (“FIs”) on October 9, 2024, recommending that FIs undertake specific compliance practices to minimize their risk of violating General Prohibition (“GP”) 10 of BIS’s Export Administration Regulations (“EAR”).  GP 10 prohibits any person (U.S. or otherwise) from selling, transferring, exporting, reexporting, financing, ordering, buying, removing, concealing, storing, using, loaning, disposing of, transporting, forwarding, or otherwise servicing an item “subject to the EAR” with knowledge that that item was, or will be, exported, reexported, or transferred in violation of the EAR.  Knowledge in this context goes beyond actual knowledge, and can be inferred from circumstances surrounding a transaction; in other words, a “known or should have known” standard.  Although BIS has published several joint alerts with FinCEN encouraging financial institutions to look for potential red flags of evasion of export controls, this guidance goes further in establishing specific export compliance best practices for financial institutions and suggests that financial institutions that finance or otherwise service prohibited exports risk liability under the EAR.

In response to the ongoing conflict in Ukraine and to exert further pressure on Russia, the EU enacted its 14thsanctions package against Russia on June 24, 2024. The new package comes after months of negotiations between Member States, and follow, but in many ways expand upon, those passed by the United States and the UK last week (see Crowell’s Alert on those developments here). 

On June 12, 2024, the U.S. Department of the Treasury’s Office of Foreign Asset Control (OFAC) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced additional sanctions and export restrictions in response to Russia’s continued aggression in Ukraine. The next day, the UK announced additional sanctions designations.

On April 24, 2024, President Biden signed into law the National Security Supplemental fiscal package, which includes significant new sanctions and export controls authorities. Although the U.S. foreign aid commitments for Ukraine, Israel, and Taiwan headline the new law, it also (1) expands the statute of limitations for U.S. sanctions violations; (2) includes new authorities for the President to coordinate sanctions efforts with the European Union and the United Kingdom; (3) expands sanctions and export controls on Iran (including some targeted at Chinese financial institutions); and (4) includes new sanctions authorities targeting terror groups.

On March 29, 2024, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), issued a “notice and request for information and comment” (“RFI”) seeking comments on the Bank Secrecy Act’s (“BSA”) customer identification program (“CIP”) rule.  The CIP rule requires U.S. banks to collect a taxpayer identification number (“TIN”) from a U.S. person before opening a new account for that person.  For individuals, this TIN will be a Social Security number (“SSN”).

In advance of the impending January 1, 2024 effective date for the U.S. Treasury Department, Financial Crimes Enforcement Network’s (“FinCEN’s”) beneficial ownership information (“BOI”) reporting requirements, FinCEN has proposed an extension of the reporting deadline for some reporting companies, and issued additional guidance regarding BOI reporting requirements, including a Small Entity Compliance Guide, a BOI Brochure, and supplementary Frequently Asked Questions (“FAQs”).