Who Can Access the Beneficial Ownership Information that FinCEN Maintains?

Now that I have registered my beneficial ownership information with FinCen, who can request to view it?

On December 21, 2023 FinCen published the final rule elaborating on the Corporate Transparency Act’s purpose, access, and safeguards to information. The ostensible purpose of the Corporate Transparency Act is to protect national security and safeguard U.S. financial institutions from illicit use. FinCen contemplates that the information will be used in tax investigations, to thwart terrorism, and to prevent the undermining of democracy by keeping organizations from raising, hiding, or moving money in the United States through anonymous shell or front companies.

To accomplish these goals, FinCen has set out three broad criteria for the use and disclosure of beneficial ownership information as follows:  (1) only authorized recipients have access to BOI; (2) authorized recipients use that BOI only for purposes permitted by the CTA; and (3) authorized recipients re-disclose BOI only in ways that balance protection of the security and confidentiality of the BOI with furtherance of the CTA’s objective of making BOI available to a range of users for purposes specified in the CTA.

Now that your beneficial ownership information has been submitted, who can gain access to that sensitive data?

The information supplied to FinCen is considered sensitive information, and therefore access to it is limited to specific parties for specific purposes. In other words, not just anybody can access this information, but it is not completely inaccessible. In the next sections, we will discuss who may request access to beneficial ownership information as well as any conditions that must be met by requesting entities.

FinCen appears to be taking a two-pronged method of analysis approach in this regard. FinCen have identified five categories of approved requesting entities, each with their own distinct scope of purposes for which the information may be used. The first prong of the analysis is as to who may request access to beneficial ownership information, and the second prong is for what purpose.

Domestic Agencies

1. Domestic agencies are authorized by the CTA to access beneficial ownership information. This includes federal law enforcement or intelligence agencies, state law enforcement or intelligence agencies, or local agencies including tribal authorities if authorized by a court of competent jurisdiction. The distinctions do not end here. As long as the federal agency is of the type that uses the beneficial ownership information in advancement of a law enforcement or intelligence purposes, they are automatically authorized to request access. State agencies and all the others, on the other hand, must receive authorization from a local court, which seems to imply that while state agencies need a warrant or subpoena to access beneficial ownership information. Beneficial ownership can be accessed in the criminal or civil context. This establishes who may request information, next let’s discuss how these entities can request beneficial ownership information.
2. The scope by which any of the above referenced governmental agencies may request this information is for promoting national security, particularly combating designated foreign terrorist organizations. This also includes any threats recognized by Congress (i.e. “acts of corruption”), law enforcement activities (criminal or civil), intelligence activities, or any activities deemed “national security activities,” which leaves a vague and open ended definition. State, local, tribal or non-federal agencies must seek a judicial order requiring the disclosure of the beneficial ownership information, but such an order will be reviewed by FinCen and if deemed inadequate, will deny to provide the information requested.

Foreign Requesters

1. FinCen will also provide requested beneficial ownership to foreign requesters, provided they follow the proper steps in requesting the information. A foreign actor must make its request through an intermediary federal agency, be for the assistance of law enforcement, national security interest etc authorized under the laws of the foreign country, and be made under international treaty, agreement or convention.
2. FinCen has not made any designations as to what agency constitutes and intermediary federal agency, but has identified itself as a potential federal intermediary. Federal intermediaries will be required in scenarios where: a treaty, convention or agreement to aid in law enforcement, prosecution, intelligence activity authorized by the laws of the foreign country; or a treaty has identified a particular agency as a federal intermediary and all other criteria are met. Even if the above criteria is met, the foreign entity must qualify as originating from a trusted foreign country.
3. All of the above may qualify a foreign entity as a “trusted foreign country.” However, FinCen has not specifically defined what constitutes a trusted foreign country. In collaboration with other agencies, it is to be assumed NATO nations, the EU, and G7 group of nations will be designated as trusted foreign countries initially.
4. There are vague requirements for foreign entities to maintain the security an confidentiality of the information disclosed, including training for individuals in the foreign entity to handle this sensitive material, but there is no specific guidance and no auditing mechanism in place to ensure any disclosed data is being handled securely.
5. No single authorization of beneficial ownership information may be distributed to anyone but the original foreign entity requesting the disclosure. No double-disclosure is allowed to any third party.

Financial Institutions

Financial institutions that use the beneficial ownership information to facilitate compliance with customer due diligence requirements under applicable laws are qualified to request beneficial ownership information from FinCen. This seems to be rather circular since these institutions are already required to disclose this information under existing federal law.

Regulatory Agencies

Regulatory agencies that are authorized to to assess, supervise, or enforce institutional compliance with customer due diligence may request beneficial ownership information if the information is used solely to conduct an assessment, supervision, or authorized investigation under federal law. The regulatory agency must also enter into an agreement with FinCen regarding appropriate protocols.

Department of Treasury

The department of the Treasury may receive beneficial ownership information for “tax administration purposes.” Employees or agents of the Department of Treasury may gain access to beneficial ownership information where their official duties require access.

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