The Trump administration is getting rid of a rule that required businesses formed in the United States to disclose who actually owns them to federal financial-crimes investigators.
And it’s not just ending the requirement. The Treasury Department says it will delete the ownership information it has already collected.
According to The Washington Post, Treasury permanently repealed the rule Tuesday, arguing that the reporting requirements placed an unnecessary burden on American businesses.
Treasury Secretary Scott Bessent defended the move as a way to reduce regulatory headaches for U.S. companies.
The rules, intended to combat money laundering and other financial crimes, imposed an “undue burden on American businesses,” Bessent said, according to The Post.
But critics see something very different.
They argue the rule was created to give federal investigators another tool for tracking money laundering, fraud and other financial crimes that can hide behind anonymous shell companies.
Under a Treasury Department advisory, foreign companies and pooled investment vehicles, including mutual funds and hedge funds, also will no longer have to identify Americans who help them register to do business in the United States.
And the administration isn’t simply stopping future collections.
Treasury plans to erase the information it already has.
Democrats immediately criticized the decision, arguing that eliminating the reporting requirement could make it easier for criminals to hide behind shell companies and move money without investigators knowing who is actually behind the businesses.
That’s the central fight here. The administration sees a burdensome regulation imposed on American businesses. Democrats see a transparency requirement designed to help law enforcement figure out who is actually behind companies that can otherwise exist largely on paper.
Either way, the federal government is about to have considerably less information about who owns what.
And once the database is deleted, investigators won’t exactly be able to go back and look it up later.
