A US appeals court has put enforcement of a law requiring corporate entities to disclose beneficial owners on hold, temporarily stopping the requirement for most companies to submit information by a January 13 deadline. The 5th US Circuit Court of Appeals reinstated a nationwide injunction that was previously blocked by a federal judge in Texas.
The decision comes after a three-judge panel of the 5th Circuit temporarily halted the enforcement of the law while the government appealed the judge’s ruling. However, another panel will ultimately decide whether to uphold or overturn the judge’s decision.
Under the law, enacted in 2021, corporations and limited liability companies were required to report information about their beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). The measure was designed to address money laundering by requiring entities to disclose their ownership structures.
A federal judge had previously ruled that the law was unconstitutional due to concerns over states’ rights. The court has decided to keep enforcement paused “to preserve the constitutional status quo” while it considers the merits of the case, with a hearing set for March 25.
Source: https://www.reuters.com/legal/us-appeals-court-halts-enforcement-anti-money-laundering-law-2024-12-27