New US Law Imposes Significant New Obligations on “Beneficial Owners” of Certain Reporting Companies

This year’s National Defense Authorization Act (NDAA), which passed over President Trump’s veto on New Year’s Day, requires the US Department of the Treasury to establish a registry of the individual beneficial owners of potentially millions of “reporting companies.” The measure is intended to target the so-called “shell corporations” that US authorities believe are used by criminals to conceal money laundering, fraud, corruption, and other types of misconduct. Under the law, a “reporting company” will be required to disclose the identity of any individual who: (1) owns or controls 25% or more of its ownership interests; or (2) exercises “substantial control” over the company. We explore these provisions, and other aspects of the NDAA’s anti-money laundering provisions, in our full client briefing.