What changed between these versions
A complete substitute amendment. v2 replaces the outright repeal of the Corporate Transparency Act with targeted amendments that limit its beneficial ownership reporting requirements exclusively to foreign persons and foreign-owned entities. It also mandates the deletion of data collected from non-foreign individuals and entities, fundamentally altering the bill's original purpose.
Overview
Extensive changes, effectively a complete rewrite of the bill's operative sections. · v2 fundamentally restructures the bill's approach, shifting from a full repeal of the Corporate Transparency Act to a targeted modification that narrows its scope to foreign entities and individuals.
v2 represents a complete substitute amendment, fundamentally altering the bill's purpose. While v1 aimed to fully repeal the Corporate Transparency Act (CTA) and all its associated amendments, v2 instead amends the CTA to limit its beneficial ownership reporting requirements exclusively to foreign persons and foreign-owned entities. This shift means the CTA is no longer repealed but significantly narrowed in scope, with a new mandate for FinCEN to delete previously collected data pertaining to domestic entities and individuals.
Major additions
This section introduces specific amendments to Section 5336 of title 31, United States Code, by inserting the term "foreign" in various places related to beneficial ownership reporting. It also modifies the definition of a "reporting company" to remove the distinction between entities formed under the laws of a State or Indian Tribe and those formed under the laws of a foreign country, effectively making the reporting requirement apply to entities "that is formed" (implying foreign entities, given the other changes).
This fundamentally changes the scope of the Corporate Transparency Act, limiting its application to foreign beneficial owners and foreign-formed entities. This means domestic entities and individuals are no longer subject to the reporting requirements.
This new subsection mandates that the Financial Crimes Enforcement Network (FinCEN) delete all beneficial ownership information collected under section 5336 of title 31, United States Code, within 90 days of enactment, specifically for individuals who are not foreign beneficial owners or entities that are not reporting companies (as defined by the newly amended section 5336).
This provision ensures that data previously collected from domestic entities and individuals under the CTA, which would no longer be subject to reporting under the amended act, is purged from FinCEN's records. This has a significant impact on privacy for previously reporting domestic entities.
Deletions
This section explicitly repealed the Corporate Transparency Act (title LXIV of division F of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021) and all amendments made by that Act.
The deletion of this section means the Corporate Transparency Act is no longer proposed for a full repeal. Instead, it is modified, which is a fundamental shift in policy.
This section contained technical and conforming amendments to Title 31, United States Code (sections 5321(a) and 5322), and Title LXV of the Anti-Money Laundering Act of 2020 (sections 6502 and 6509), all designed to remove references to the Corporate Transparency Act following its proposed repeal.
The deletion of these conforming amendments is a direct consequence of the decision not to fully repeal the CTA. These amendments are no longer necessary as the CTA is now being modified rather than eliminated.
Scope
Complete substitute — The changes are comprehensive, affecting the entire operative mechanism of the bill. — Yes, v2 represents a fundamental change in policy direction. v1 sought to eliminate the CTA entirely, while v2 seeks to preserve it but drastically narrow its application to foreign entities and beneficial owners. — The changes in v2 directly interact with and significantly alter the application of the existing Corporate Transparency Act, rather than repealing it. The new Section 2(b) also interacts with FinCEN's data retention policies.
Impact analysis
Domestic corporations, limited liability companies, and similar entities formed in the U.S.
Gains privacy and relief from reporting burdens.
Under v1, the CTA would have been repealed, meaning these entities would not have been subject to its reporting requirements. Under v2, the CTA is amended to specifically exclude them from reporting requirements by limiting the scope to "foreign" entities and beneficial owners. Additionally, any beneficial ownership information previously collected from these domestic entities will be deleted.
Foreign corporations, limited liability companies, and similar entities, and their beneficial owners.
Loses potential relief from reporting burdens that v1 would have provided; continues to be subject to CTA requirements.
Under v1, the CTA would have been repealed, meaning these entities would not have been subject to its reporting requirements. Under v2, the CTA is specifically amended to continue applying to them, with the term "foreign" explicitly inserted into the reporting requirements.
Financial Crimes Enforcement Network (FinCEN).
Experiences a procedural change in data collection scope and a new mandate for data deletion.
Under v1, FinCEN would have ceased collecting beneficial ownership information under the CTA and would have had to manage the implications of a repealed act. Under v2, FinCEN is directed to continue collecting beneficial ownership information, but only from foreign entities and beneficial owners, and is explicitly mandated to delete data collected from domestic entities and individuals.