February 24, 2023

AGs Seek to Ensure Expeditious Access to Federal Beneficial Ownership Database

Bernard Nash

Cozen O'Connor

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Cozen O'Connor

A bipartisan group of 42 AGs sent a letter under the letterhead of the National Association of Attorneys General to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) criticizing its proposed rule requiring additional scrutiny before granting state, local, and tribal agencies access to its database of “beneficial” owners of certain companies—individuals who exercise control over, or benefit from the assets of, a company.
In the letter, the AGs explain that the agencies are already required to obtain a court order to gain access, and they argue that the proposed change to the approval process—requiring entities to submit a written justification for access—is inconsistent with Congress’ purpose in creating the database and will cause delay in accessing information that could be used to fight organized and white-collar crime, and terrorism. The AGs also argue that FinCEN’s policy of reviewing court orders rather than allowing entities to self-certify that they have such orders is inefficient and does not provide added safeguards.
The AGs ask FinCEN to drop the written justification requirement and allow agencies to self-certify that they have court orders. They also ask for additional amendments to the proposed regulations, including adding clear language explaining that information obtained from the database cannot be disclosed in litigation, and clarification that beneficial ownership information can be accessed even after a case has been charged, not only when a jurisdiction has initiated an investigation.

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