FinCEN Ends Beneficial Ownership Reporting: UK Due Diligence Implications

The Financial Crimes Enforcement Network (FinCEN), a bureau of the US Department of the Treasury, issued a final rule on 11 August 2026 that permanently removes the requirement for US companies and US persons to report beneficial ownership information under the Corporate Transparency Act (CTA). The rule became effective on 14 August 2026. It carries the regulatory identification number RIN 1506-AB67 and runs to 73 pages.

The final rule adopts the exemptions set out in the interim final rule of March 2025, making the rollback permanent for entities formed in the United States. All entities created in the United States are permanently exempt from filing initial, updated or corrected beneficial ownership reports. US persons holding FinCEN identifiers are released from any obligation to update or correct the information originally submitted to obtain them. Foreign companies are no longer required to report US person "company applicants", and foreign pooled investment vehicles registered in the United States need not report the beneficial ownership information of a US person in control of the vehicle.

Most consequentially for firms conducting due diligence from outside the United States, FinCEN has confirmed it will delete information about any individual — company applicant, beneficial owner or FinCEN identifier recipient — that it reasonably believes is a US person, for example where the record is linked to a US passport or driving licence. No action is required by filers for that deletion to occur. Foreign entities that remain reporting companies must still report beneficial ownership information for foreign individuals. FinCEN has published accompanying frequently asked questions and is updating its guidance.

For UK regulated firms, the immediate operational point is that a data source which was, for a brief period, capable of corroborating ownership claims for US-formed entities has now been withdrawn and is being actively erased. Records gathered during the 2024 filing window will not be available at the next periodic review. Firms that built any part of their verification methodology around the CTA register — including vendor data products that ingested it — should establish whether that dependency exists and remove it from control documentation and procedures.

The underlying obligation is unchanged. Regulation 28 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) requires firms to identify the beneficial owner of a corporate customer and take reasonable measures to verify that identity, and to understand the ownership and control structure. UK firms have never been permitted to treat a public beneficial ownership register as a substitute for that work, and Joint Money Laundering Steering Group (JMLSG) guidance has long treated registry data as corroborative rather than determinative. What changes is the evidential burden: for limited liability companies and limited partnerships formed in Delaware, Wyoming, New Mexico and elsewhere in the United States, verification must now rest on customer-supplied documentation — structure charts, share registers, subscription and shareholder agreements, audited financial statements, legal opinions and, where proportionate, independent corroboration from commercial data providers and third-party attestation.

There is a notable asymmetry that UK institutions should recognise. A UK national who is a beneficial owner of a foreign reporting company registered to do business in the United States remains within scope of the reporting requirement, while a US person in the equivalent position does not, and existing records concerning them are being deleted. UK-linked ownership data therefore persists in a database from which domestic US ownership data is being removed.

The divergence in direction of travel is material to risk assessment. The Economic Crime and Corporate Transparency Act 2023 has extended Companies House identity verification, strengthened its powers over the register of persons with significant control, and sits alongside the Register of Overseas Entities. Firms conducting entity risk assessment under Regulation 18 of the MLRs should consider whether the reduced availability of independently held ownership data for US-formed structures warrants adjustment to jurisdictional risk scoring, and whether existing enhanced due diligence triggers adequately capture opaque US legal persons used within layered structures. Discrepancy reporting duties under Regulation 30A apply only to UK registers, so no equivalent reporting route exists where information obtained from a US-formed customer conflicts with other holdings.