Congress Passes Sweeping Anti-Money Laundering and Corporate Beneficial Ownership Law
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Key takeaways:
- On January 1, 2021, Congress enacted the National Defense Authorization Act for Fiscal Year 2021 (the “NDAA”), overriding a presidential veto by overwhelming, bipartisan margins. The NDAA makes the most significant changes to U.S. anti-money laundering /countering the financing of terrorism (“AML/CFT”) laws since the USA PATRIOT Act of 2001.
- The NDAA contains foundational changes to the AML/CFT compliance framework, with widespread implications for not only financial institutions but also a diverse array of other companies.
- One of the most significant provisions in the NDAA imposes beneficial ownership reporting obligations at formation, for new entities, or, for companies already in existence, two years after the U.S. Treasury Department issues implementing regulations. These requirements eventually will replace the existing Customer Due Diligence Rule with a requirement that companies report changes in their beneficial ownership moving forward.