US Drops Key Business Ownership Reporting Rule for Americans as Scott Bessent Hails 'Victory' for Small Businesses—'Gift to ‌Cartels,' Warns Elizabeth Warren

Namrata Sen

Fri, August 14, 2026 at 12:30 AM GMT+3 5 min read

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The Treasury Department has finalized a rule that exempts U.S. firms and individuals from reporting beneficial ownership information to its Financial Crimes Enforcement Network (FinCEN).

"Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security," Treasury Secretary Scott Bessent stated in the announcement on Tuesday. Beneficial owners are identified as anyone who owns at least 25% of a business or exerts "substantial control" over the entity.

Additionally, foreign pooled investment vehicles registered in the U.S. are now exempt from reporting the beneficial ownership information of U.S. persons who control them. However, foreign reporting companies must still disclose beneficial ownership information for foreign individuals.

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The Treasury Department said FinCEN will remove previously reported information on Americans from the government's beneficial ownership database. Under the new rule, foreign companies will no longer have to report Americans who assisted with their U.S. business registrations.

In a post on X, Bessent said, "Today's action is a victory for common sense and American small businesses."

Today's action is a victory for common sense and American small businesses. @POTUS promised to cut red tape, and this final rule delivers. Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national… https://t.co/g8RbpKJ1jT

— Treasury Secretary Scott Bessent (@SecScottBessent) August 11, 2026

Trump's Regulatory Rollback Draws Fire

The move, first announced more than a year ago, is part of the Trump administration's broader effort to scale back anti-corruption measures. It reverses beneficial ownership reporting requirements introduced under former President Joe Biden to strengthen anti-corruption and anti-money laundering efforts.

Sen. Elizabeth Warren (D-Mass.) warned that rolling back beneficial ownership reporting requirements could make it easier for criminals, cartels and U.S. adversaries to use shell companies for sanctions evasion, fraud, drug and sex trafficking, and other organized crime.

"This is a gift to ‌cartels, ⁠criminals, and U.S. adversaries that exploit shell companies to move millions through our financial system," Warren said in a statement to Reuters.

The move is part of a broader shift in the Trump administration's approach to financial regulation and corporate oversight, with critics warning that reduced disclosure requirements could weaken transparency and accountability.

In another move by the administration, the SEC is considering allowing U.S. public companies to report financial results twice a year instead of quarterly, following President Donald Trump's call for the change. While the SEC says semiannual reporting could cut compliance costs and reduce short-term pressures, investor groups largely oppose the proposal, arguing quarterly disclosures are essential for informed investment decisions, market fairness and corporate oversight.

Image via Shutterstock

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