U.S. Treasury Will Not Enforce Controversial Anti-Money Laundering Rule

The U.S. Treasury has announced its decision not to enforce penalties connected to the Corporate Transparency Act, a controversial anti-money laundering law.

Key Takeaways

The Corporate Transparency Act took effect in January 2024, aiming to crack down on money laundering.
The Treasury now says it will not enforce penalties against U.S. citizens or domestic companies under the Act.
President Donald Trump has heralded the Treasury’s decision as a victory against what he terms “outrageous” scrutiny.
Proposed adjustments may narrow the Act’s scope to foreign companies.
Mixed reactions persist, with some welcoming the suspension and others warning of potential financial system vulnerabilities.

Treasury’s Decision

The U.S. Treasury Department announced it will not enforce penalties associated with the Corporate Transparency Act (CTA). The CTA, effective as of January 1, 2024, mandates disclosure of beneficial owners to combat money laundering, exempting large entities with over 20 employees or $5 million in revenue. A federal court in Alabama, however, ruled the Act unconstitutional, claiming congressional overreach.

The law has ignited controversies and stirring opposition voices. Critics of the law, including former President Donald Trump, argue the Act’s requirements are disruptive, particularly for small businesses. Trump labeled the BOI reporting requirement as “outrageous and invasive,” insisting it burdens low-risk entities. Meanwhile, Secretary of the Treasury Scott Bessent called the Treasury’s decision a “victory for common sense.” Senator Tommy Tuberville expressed concerns about government overreach, cautioning against the legal complications potentially stemming from enforcing the Act in its entirety.

However, the FACT Coalition criticized the ruling that deemed the law unconstitutional, suggesting it facilitates secretive financial practices. Ian Gary, executive director of the FACT Coalition, stated in March 2024 that the ruling was “a pro-crime, pro-drug cartel, pro-fentanyl ruling that undermines the rule of law and allows criminals to use anonymous shell companies to hide their dirty money from law enforcement.”

Donald Trump Celebrates End of Corporate Transparency Act Measure https://t.co/kiycw8MHm6

— OnNow (@MyWayOnNow) March 3, 2025

Implications and Future Outlook

The Treasury reportedly plans to narrow the Act’s focus, targeting primarily foreign companies while suspending penalties for U.S. entities. The Treasury’s intention to adjust enforcement aligns with critiques emphasizing the law’s current burdens on domestic companies.

The situation unfolding around the CTA exhibits the necessity of balancing regulatory actions with protecting economic freedom. While the government seeks to refine the Act’s scope, the future of business transparency laws in America remains in question. Adjustments may prioritize transparency while alleviating compliance burdens on small businesses.