Voglio sapere a riguardo di…

Federal Register / Vol. 86, No. 233 / Wednesday, December 8, 2021 / Proposed Rules Finally, as explained in more detail below, FinCEN considered alternatives while shaping the specific reporting requirements of the rule, including: 1
The length of the initial reporting period; and 2 the length of time to file an updated report. These alternatives and their cost differences, as well as FinCENs rationale for not selecting the alternative, is discussed in the Paperwork Reduction Act section below see Table 8.

jspears on DSK121TN23PROD with PROPOSALS4

B. Regulatory Flexibility Act The Regulatory Flexibility Act 175
RFA requires an agency either to provide an initial regulatory flexibility analysis IRFA with a proposed rule or certify that the proposed rule would not have a significant economic impact on a substantial number of small entities.
This proposed rule would apply to a substantial number of small entities.
FinCEN has attempted to minimize the burden on reporting companies to the greatest extent practicable, but the proposed rule may nevertheless have a significant economic impact on small entities required to disclose beneficial owners. Accordingly, FinCEN has prepared an IRFA. FinCEN welcomes comments on all aspects of the IRFA. A
final regulatory flexibility analysis will be conducted after consideration of comments received during the comment period.
i. Statement of the Need for, and Objectives of, the Proposed Rule The CTA establishes a new federal framework for the reporting, storage, and disclosure of BOI. In enacting the CTA, Congress has stated that this new framework is needed to set a clear federal standard for incorporation practices; protect vital U.S. national security interests; protect interstate and foreign commerce; better enable critical national security, intelligence, and law enforcement efforts to counter money laundering, the financing of terrorism, and other illicit activity; and bring the United States into compliance with international AML/CFT standards.176
Section 6403 of the CTA amends the BSA by adding a new section at 31
U.S.C. 5336 that requires the reporting of BOI at the time of formation or registration of a reporting company, along with protections to ensure that the reported BOI is maintained securely and accessed only by authorized persons for limited uses. The CTA requires the Secretary to promulgate implementing policies and procedures, and noted that doing so would be challenging, but did not directly oppose this type of arrangement.
175 5 U.S.C. 601 et seq.
176 CTA, Section 64025.

VerDate Sep<11>2014

19:51 Dec 07, 2021

Jkt 256001

regulations that prescribe procedures and standards governing the reporting and use of such information, to include procedures governing the issuance of FinCEN identifiers for BOI reporting.
The CTA requires FinCEN to maintain BOI in a secure, non-public database that is highly useful to national security, intelligence, and law enforcement agencies, as well as federal functional regulators. The proposed rule would require certain entities to report to FinCEN information about the reporting company, its beneficial owners the individuals who ultimately own or control the reporting companies and the company applicant of the reporting company, as required by the CTA.
ii. Small Entities Affected by the Proposed Rule To assess the number of small entities affected by the proposed rule, FinCEN
separately considered whether any small businesses, small organizations, or small governmental jurisdictions, as defined by the RFA, would be impacted.
FinCEN concludes that small businesses would be substantially impacted by the proposed rule. Each of these three categories is discussed below.
In defining small business, the RFA
points to the definition of small business concern from the Small Business Act.177 This small business definition is based on size standards either average annual receipts or number of employees matched to industries.178 Under the proposed rule, small businesses would be reporting companies required to submit BOI
reports to FinCEN.179 There are 23 types of entities that are exempt from submitting BOI reports to FinCEN,180
but none of these exemptions apply directly to small businesses. In fact, 177 See
5 U.S.C. 6013.
U.S. Small Business Administration, Table of Small Business Size Standards Matched to North American Industry Classification System Codes NAICS August 19, 2019, available at https www.sba.gov/sites/default/files/2019-08/
SBA%20Table%20of%20Size%20Standards_
Effective%20Aug%2019%2C%202019_Rev.pdf.
179 Domestic reporting companies are defined in the proposed rule as corporations, limited liability companies, or other entities that are created by the filing of a document with a secretary of state or similar office under the law of a state or Indian Tribe. Foreign reporting companies are defined in the proposed rule as corporations, limited liability companies, or other entities that are formed under the law of a foreign country and registered to do business in any state or Tribal jurisdiction by the filing of a document with a secretary of state or any similar office under the law of a state or Indian Tribe. Both definitions are consistent with statutory definitions of these terms in the CTA. See 31 U.S.C.
5336a11A and proposed 31 CFR 1010.380c1.
180 FinCEN has proposed including the 23
exemptions that are statutorily mandated. See 31
U.S.C. 5336a11B and proposed 31 CFR
1010.380c2.
178 See
PO 00000

Frm 00033

Fmt 4701

Sfmt 4702

69951

many of the statutory exemptions, such as exemptions for large operating companies and highly regulated businesses, would apply to larger businesses. For example, the large operating companies exemption applies to entities that have more than 20 fulltime employees in the United States;
more than $5 million in gross receipts or sales from sources inside the United States; and have an operating presence at a physical office in the United States.181 Using the SBAs 2019
definition of small business across all 1,037 industries by 6-digit NAICS
code, there are only 46 categories of industries whose SBA definition of small would be lower than this statutory exemption of more than 20 million employees and $5 million in gross receipts/sales. And these were predominantly related to agricultural categories. All other SBA definitions of small entity well exceeded the thresholds stated in the statutory exemption for large operating companies. Therefore, FinCEN assumes that all entities estimated to be reporting companies are small, for purposes of this analysis. FinCEN estimates that there are approximately 25 million existing reporting companies and 3
million new reporting companies formed each year.182 As mentioned 181 31 U.S.C. 5336a11xxi, and proposed 31
CFR 1010.380c2xxi.
182 FinCEN estimated these numbers by relying upon the most recent available data, 2018, of the annual report of jurisdictions survey administered by the International Association of Commercial Administrators in which Colorado, Delaware, Hawaii, Illinois, Indiana, Louisiana, Massachusetts, Michigan, North Carolina, Ohio, Oregon, Texas, Wisconsin, and Wyoming were asked the same series of questions on the number of total existing entities and total new entities in their jurisdictions by entity type. See International Association of Commercial Administrators, Annual Report of Jurisdictions Survey2018 Results, 2018, available at https www.iaca.org/annual-reports/.
Please note this underlying source does not provide information on the number of small businesses in the aggregate entity counts, or on the revenue or number of employees of the entities in the data.
FinCEN used the reported state populations, total existing entities per state, and new entities in a given year per state to calculate per capita ratios of total existing and new entities in a year for each state. FinCEN then calculated a weighted average of the per capita ratio of the 14 states to estimate a weighted per capita average for the entire United States see Table 1 below. FinCEN then multiplied this estimated weighted average by the current U.S.
population to estimate the total number of existing entities and the number of new entities in a year.
FinCEN then estimated the number of exempt entities by estimating each of the relevant 23
exempt entity types. Last, FinCEN subtracted the estimated number of exempt entities from its prior estimations. This results in an approximate estimate of 25 million reporting companies currently in existence and 3 million new reporting companies per year. To review this analysis, including all sources and numbers, please see the Paperwork Reduction Act section below.

E:FRFM08DEP4.SGM

08DEP4