Treasury announces plans to destroy beneficial ownership database

The U.S. Treasury Department has finalized a rule permanently exempting domestic companies from beneficial ownership disclosures under the Corporate Transparency Act and ordering the deletion of all previously collected registry data. Treasury Secretary Scott Bessent defended the move as a victory against burdensome red tape. However, bipartisan lawmakers, law enforcement groups, and national security experts strongly condemn the decision, warning it creates a massive loophole for cartels, tax evaders, and foreign adversaries to launder money through shell companies.

Treasury beneficial ownership database destruction

• ▪The United States Treasury Department's final rule mandates the deletion of all beneficial ownership data already submitted by domestic companies to the Financial Crimes Enforcement Network.
• ▪United States Treasury Secretary Scott Bessent characterized the final rule as a victory for common sense that eliminates a burdensome reporting requirement for small businesses without compromising national security.
• ▪The United States Treasury Department published a final rule permanently exempting domestic companies and individuals from disclosing beneficial ownership information under the Corporate Transparency Act.
• ▪The United States Treasury Department stopped enforcing the beneficial ownership information reporting requirement for American companies and individuals in March 2025.

Corporate Transparency Act background

• ▪Congress passed the Corporate Transparency Act with bipartisan support as part of the National Defense Authorization Act six years prior to August 2026.
• ▪The Corporate Transparency Act requires American companies and individuals to report beneficial ownership information, defined as holding at least a 25 percent stake or substantial control, to the Financial Crimes Enforcement Network.
• ▪The Corporate Transparency Act requires beneficial owners to declare their name, address, birthdate, government identification number, and a picture of their physical identification.

Law enforcement concerns

• ▪Law enforcement groups, national security experts, and small business associations have opposed the Treasury Department's beneficial ownership exemption rule since its initial announcement.
• ▪The Public Integrity Project is investigating potential legal challenges against the Treasury Department's final rule, with founder Brendan Ballou stating the rule guts the statute and violates the law.

National security implications

• ▪Senator Elizabeth Warren stated that the repeal of the beneficial ownership registry is a gift to cartels, criminals, and United States adversaries who exploit shell companies to move funds.
• ▪The Paris-based Financial Action Task Force has warned that shell companies serve as a getaway car for illicit actors, transnational criminal networks, and foreign kleptocrats to hide assets.

Congressional reactions

• ▪Senators Sheldon Whitehouse and Chuck Grassley issued a joint statement asserting that the Treasury Department's rule undermines the clear intent of the Corporate Transparency Act.
• ▪Senator Elizabeth Warren called on Treasury Secretary Scott Bessent to reverse the rule and testify before the Senate Banking Committee to explain the decision.
• ▪In April 2026, Republican members of the House Financial Services Committee approved a measure to repeal the requirement that United States shell companies disclose their true owners.
• ▪In May 2026, Senate Republicans introduced legislation to target the Corporate Transparency Act, aiming to attach the measure to the broader defense bill.

Trump administration anti-corruption rollbacks

• ▪The Trump administration has gutted enforcement of the Foreign Agents Registration Act and pardoned dozens of white-collar criminals.
• ▪The Trump administration has implemented several financial rollbacks, including ending a task force aimed at seizing Russian oligarchs' assets and pausing Foreign Corrupt Practices Act enforcement.

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