California: Attorney General Sues Trump Administration for Rolling Back Financial Crime Enforcement Under the Corporate Transparency Act
California Attorney General Rob Bonta announced that California has joined a coalition of 21 attorneys general in filing a lawsuit in the U.S. District Court for the District of Oregon challenging rulemaking by the Treasury Department's Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act.
The Corporate Transparency Act requires companies to report beneficial ownership information (BOI) — owners' names, addresses, birth dates and identification records — to FinCEN, so that shell companies cannot hide financial transactions from law enforcement. FinCEN's new rule permanently removes BOI reporting requirements for U.S. companies and U.S. persons, exempts foreign companies from reporting their U.S. beneficial owners, and commits FinCEN to deleting all information previously reported by U.S. companies and individuals.
The lawsuit alleges the rule is in excess of statutory authority, contrary to law, and arbitrary and capricious, in violation of the Administrative Procedure Act and the U.S. Constitution. "The Trump Administration is unlawfully rolling back reporting requirements meant to help law enforcement track down bad actors who hide financial assets in shell companies," Bonta said. "Congress passed the Corporate Transparency Act with bipartisan support because it understood law enforcement needed an important additional tool to root out illegal financial transactions and corruption."
In California, the Department of Financial Protection and Innovation would have had access to FinCEN's BOI database for investigative and regulatory purposes. The rule will force law enforcement and regulatory agencies to resort to more time-consuming and less reliable procedures, and will impair states' ability to enforce their own tax laws.
Source: GSM · USA (original Chinese edition)
Photo: 美国财政部大楼（资料图）。Wikimedia Commons，CC BY-SA 4.0。 / The U.S. Department of the Treasury building (file photo). Via Wikimedia Commons, CC BY-SA 4.0.
