The U.S. Treasury Department announced on Sunday that it will not enforce penalties under the Corporate Transparency Act (CTA) against U.S. citizens or domestic businesses.
The CTA, a Biden-era law, requires millions of business entities to disclose their real beneficial owners to combat money laundering. However, the Trump administration has criticized the law, arguing it places an unnecessary burden on low-risk small businesses.
In its statement, the Treasury said the move aims to support “hard-working American taxpayers and small businesses.” It also revealed plans to issue a new rule narrowing the law’s scope to focus solely on foreign reporting companies.
The act has faced multiple legal challenges since its implementation, with critics claiming it overreaches and complicates compliance for smaller enterprises.
Supporters of the CTA argue it is crucial for preventing criminals from exploiting U.S. businesses to launder illicit funds. They highlight the growing trend of the U.S. becoming a safe haven for global money laundering schemes.
While the Treasury’s latest decision pauses enforcement, the debate over the law’s effectiveness and its impact on businesses is far from over.
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