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Federal Register / Vol. 86, No. 233 / Wednesday, December 8, 2021 / Proposed Rules
information has already been provided to FinCEN, by a FinCEN identifier.90
To implement this requirement, proposed 31 CFR 1010.380b specifies that each report or application under that section must be filed with FinCEN
in the form and manner FinCEN
prescribes, and each person filing such report shall certify that the report is accurate and complete.91 It then sets forth the requirement for reporting companies to report to FinCEN
identifying information about their beneficial owners, the company applicant, and the reporting company itself. Finally, it outlines certain special reporting rules and sets forth the requirements for obtaining a FinCEN
identifier.

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i. Information To Be Reported on Beneficial Owners and Company Applicants Proposed 31 CFR 1010.380b1ii sets forth the specific items of information that a reporting company must report about each individual beneficial owner and each individual company applicant.92 The language is drawn nearly verbatim from 31 U.S.C.
5336b2A. In addition, for clarity, it incorporates the statutory definition of acceptable identification document, 31 U.S.C. 5336a1, rather than leaving the reader to identify the cross-reference based on the CTAs reference to a unique identifier number from an acceptable identification document. 93
Also for clarity, the proposed rule consolidates discussion of the FinCEN
identifier in proposed 31 CFR
1010.380b5.
The proposed rule also clarifies what address information should be reported.
The statute requires reporting 90 31 U.S.C. 5336b1A reporting requirement; 31 U.S.C. 5336b2 required information.
91 Commenters to the ANPRM discussed the potential for FinCEN to require an attestation of accuracy or other certification on either a one-time or periodic basis, including financial institution trade associations and civil society organizations, which argued that such a requirement would encourage reporting companies to keep their information up to date. However, others argued that FinCEN lacks the statutory authority to include such a requirement in the regulations. FinCEN
invites further comments on its proposal that a person filing a report or application with FinCEN
pursuant to 31 CFR 1010.380a shall certify that the report is accurate and complete.
92 Company applicant is the proposed rules term for what the statute refers to as the applicant. See 31 U.S.C. 5336a2.
93 See 31 U.S.C. 5336b2AivI for information submission requirement; 31 U.S.C.
5336a1 for definition of acceptable identification document. The definition of acceptable identification document is not inserted entirely verbatim because FinCEN has made certain minor changes to the statutory language to clarify the text.

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companies to identify beneficial owners and applicants by their residential or business street address. 31 U.S.C.
5336b2Aiii. The statutory requirement does not specify when or whether one type of address should be used in preference to another or resolve more specific questions regarding secondary addresses or whether addresses should be domestic, if possible, or can be foreign. FinCEN
considered leaving to the reporting company the choice of which address to report, but assessed that this would unduly diminish the usefulness of the reported information to national security, intelligence, and law enforcement activity. Beneficial owners are of interest because of their economic status as persons who own or control a reporting company. Business addresses or secondary residence addresses are of some investigative value as points of contact in the event that an investigation requires follow-up, but such addresses do not definitively establish a beneficial owners primary residence jurisdiction. A beneficial owners residential address for tax residency purposes, by contrast, is of value both as a point of contact and for tax administration purposes.94
Moreover, multiple persons may be associated with a business address.
FinCEN believes that the residential street address will therefore be more useful for establishing the unambiguous identity of an identified beneficial owner. The reporting of a residential street address will also likely allow for easier follow-up by law enforcement in the event of investigative need.
Accordingly, FinCEN believes that requiring the disclosure of beneficial owners residential street address for tax residency purposes is appropriate.
FinCEN therefore proposes that the reporting company report the residential address for tax residency purposes of each beneficial owner.
With respect to a company applicants address, FinCEN proposes a bifurcated approach. For company applicants that provide a business service as a corporate or formation agent, the reporting company would need to report the business address of any company applicant that files a document in the course of such individuals business.
Company applicants that provide a business service as a corporate or formation agent are of particular interest because of their role in creating or registering reporting companies. While 94 See 31 U.S.C. 5336c5B Officers and employees of the Department of the Treasury may obtain access to beneficial ownership information for tax administration purposes . . . ..

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any address for such a company applicant is of some value as a point of contact in an inquiry or investigation, company applicants who file formation documents in the course of their business may be more easily identified by their business address. To the extent company applicants make a business of filing documents on behalf of many companies, reporting the associated business address may provide more useful information to national security, intelligence, and law enforcement agencies. The business address will also allow law enforcement to identify patterns of entities that are created or registered by company applicants working at the same business address;
such patterns would not be easily identifiable if the name and address reported is specific to an individual operating on a formation agents behalf.
This information could provide insight into business practices and relationships between individuals and entities, including patterns of entity formation that suggest persons are engaged in the business of creating legal entities for the purpose of obscuring the beneficiaries of transactions or the owners of valuable assets. This information may therefore provide valuable information for national security, intelligence, and law enforcement activity.
For all other company applicants, the reporting company would need to report the residential street address that the individual uses for tax residency purposes. This establishes a uniform rule for the selection of addresses to be reported and provides specificity to the reporting company for ease of administration. It would also help to maximize the benefit to be gained from the reporting of this data element because stakeholders will not have to figure out which address was reported.
In addition, the CTA authorizes FinCEN to prescribe procedures and standards governing the reports identifying beneficial owners and applicants by, among other things, a unique identifying number from an acceptable identification document. 95
The CTA does not specify how an individual is to be identified by such number from such document.
However, the CTA also makes it unlawful to willfully provide, or attempt to provide . . . a false or fraudulent identifying photograph or document . . . to FinCEN, indicating an assumption that identifying photographs or documents would be reported.96 This provision therefore 95 31
96 31

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U.S.C. 5336b4, b2Aiv.
U.S.C. 5336h1A.

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