Protect Small Business and Prevent Illicit Financial Activity Act

Protect Small Business and Prevent Illicit Financial Activity Act

This bill revises the requirements for small U.S. companies to report certain beneficial ownership information that take effect on January 1, 2024. Beneficial ownership information includes the identity of an individual behind a corporate entity.

The bill extends the deadline for companies to report ownership information to the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). Specifically, existing companies must file their initial ownership report within two years (current regulations require the report within one year). New companies must file their initial ownership report within 90 days (current regulations require the report within 30 days). Companies must report updates or changes in ownership within 90 days (current regulations require companies to report such changes within 30 days).

Bill 118 s 3625, also known as the Protect Small Business and Prevent Illicit Financial Activity Act, is a piece of legislation currently being considered by the US Congress. The main goal of this bill is to enhance the ability of small businesses to access financial services while also cracking down on illicit financial activities.

One key provision of the bill is the establishment of a Small Business Financial Crimes Prevention Unit within the Department of the Treasury. This unit would be responsible for investigating and prosecuting financial crimes that target small businesses, such as fraud and money laundering. The unit would also provide resources and support to small businesses to help them protect themselves against financial crimes.

Another important aspect of the bill is the requirement for financial institutions to conduct enhanced due diligence on high-risk customers, including those who own or operate small businesses. This would help to prevent illicit financial activities, such as money laundering and terrorist financing, from occurring through small businesses. Additionally, the bill includes provisions to improve the transparency of beneficial ownership information for small businesses. This would make it more difficult for individuals to use small businesses as vehicles for illicit financial activities, as law enforcement agencies would have better access to information about the true owners of these businesses. Overall, the Protect Small Business and Prevent Illicit Financial Activity Act aims to support small businesses by enhancing their access to financial services, while also strengthening efforts to combat financial crimes that target small businesses. If passed, this bill could have a significant impact on the financial security of small businesses and help to prevent illicit financial activities in the US.