The U.S. Treasury Department is removing the notification rule for small business owners.

The U.S. Department of the Treasury is eliminating the requirement for small business owners in the U.S. to report information to the federal government. The Corporate Transparency Act, enacted in 2021, mandated millions of businesses to disclose basic information about their "beneficial owners." Lawmakers aimed to combat criminal activities and illicit financing conducted through opaque shell companies by identifying the true owners of certain entities.

However, a temporary final rule was released by the Financial Crimes Enforcement Network (FinCEN), a part of the Treasury, exempting all U.S. citizens and companies from reporting requirements as of March 21. This rule, which is open for public comment, is set to be finalized later this year. Legal experts warn that, in its current form, the FinCEN rule significantly diverges from the original intent of the Corporate Transparency Act and creates loopholes for criminals to continue laundering money through U.S. institutions.