Gatekeepers beware: the new US corporate transparency act could be a game-changer

The US Corporate Transparency Act (CTA), effective January 1, aims to combat financial crimes by requiring certain entities to disclose beneficial ownership information to the US Department of the Treasury. Contrary to skepticism that entities like “Tony Sopranos” will not comply, the CTA’s significant impact lies in holding corporate service providers accountable, including lawyers, trustees, and accountants, who facilitate money laundering. 

The law imposes federal disclosure requirements, making service providers associated with created entities in a federal database, creating potential liabilities for misdeeds. The CTA introduces penalties for non-compliance, leading to a new frontier for the corporate services industry. Service providers must enhance vetting procedures, identify red flags, and adopt compliance programs to navigate the evolving regulatory landscape.

For more information see Jamie Schafer “Gatekeepers beware: the new US corporate transparency act could be a game-changer”, Financial Times, December 18, 2023.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.