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United States Upgraded to 'Largely Compliant' with FATF Standards: Treasury's Efforts Acknowledged

In a significant development for financial transparency, the United States has achieved a noteworthy milestone, being elevated to "largely compliant" with the Financial Action Task Force's (FATF) Recommendation 24 on beneficial ownership transparency for legal entities. This announcement came today with the publication of the Seventh Enhanced Follow-Up Report on the United States by the FATF, marking a victory for the Treasury Department's persistent efforts to enhance transparency regarding beneficial ownership and to tackle crucial vulnerabilities within the financial system.


United States Upgraded to 'Largely Compliant' with FATF Standards: Treasury's Efforts Acknowledged

Treasury Secretary Janet L. Yellen underscored the importance of this achievement, attributing it to nearly a decade of dedicated work by the Treasury Department and its interagency partners to combat the flow of illicit funds through opaque corporate structures. Secretary Yellen emphasized the unique responsibility that comes with the United States being the world's largest economy, stating, "We're fully committed to strengthening the implementation of the FATF’s global standards as we work to advance transparency and fairness across the U.S. financial system."


The report outlines the substantial progress made by the United States in rectifying deficiencies in its anti-money laundering and counter-financing of terrorism (AML/CFT) framework, particularly in relation to Recommendation 24. Key among these advancements is the ongoing enforcement of the Corporate Transparency Act, a bipartisan legislation mandating that numerous companies operating within the United States disclose information to the Treasury's Financial Crimes Enforcement Network (FinCEN) regarding their ultimate beneficial owners or controllers.


COMPANY FORMATION &   DOMICILATION SERVICES

The Corporate Transparency Act, along with other initiatives spearheaded by the Treasury, aims to curb the misuse of anonymous entities and other corporate arrangements by criminal and illicit entities. Notably, the Treasury has also made significant strides in the implementation of the Corporate Transparency Act and is actively engaged in an extensive outreach and education campaign to inform small businesses about their reporting obligations.


Under the provisions of the Corporate Transparency Act, companies existing prior to 2024 are granted until January 1, 2025, to furnish their beneficial ownership details to FinCEN. Conversely, companies formed or registered to conduct business in the United States in 2024 are required to file within 90 calendar days of receiving official notice or public acknowledgment of their company's creation or registration.


The elevation of the United States to "largely compliant" status with FATF's Recommendation 24 underscores a significant step forward in the nation's commitment to fortifying the integrity of its financial system and combating illicit financial activities. With ongoing efforts and stringent measures in place, the Treasury Department continues to uphold transparency and accountability, safeguarding the nation's financial landscape from exploitation by criminal elements.

By fLEXI tEAM

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