The US Treasury Department’s Financial Crimes Unit has submitted a plan to access the data of fake companies, according to Reuters

© Reuters. FILE PHOTO: The Bronze Seal of the Treasury Department is displayed at the U.S. Treasury Building in Washington, U.S., January 20, 2023. REUTERS/Kevin Lamarque/File Photo

(Reuters) – The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) detailed on Thursday its plan to give certain government agencies, law enforcement agencies and financial firms access to new shell company ownership data.

FinCEN will begin requiring some companies to report beneficial ownership information in 2024, part of an effort by lawmakers and the Treasury Department under President Joe Biden to crack down on corruption and money laundering.

The new rule finalized Thursday followed the passage of the Corporate Transparency Act of 2021, a law aimed at combating illicit financing.

A year ago, FinCEN first proposed a plan to allow access to the database — a repository of detailed financial data about companies formed or doing business in the U.S. — raising privacy concerns.

Beneficial owners are defined as anyone who owns 25% or more of the business, is a majority voting owner, or someone who exercises “substantial control” over the entity.

Under the final plan, FinCEN said it would first roll out data access through a pilot program with a handful of government agencies before expanding access to other federal agencies and state, local and tribal agencies.

FinCEN will eventually be able to share the data with foreign governments and financial firms that seek it for customer due diligence purposes, he said.

“This dirty money flowing in from around the world undermines fair trade competition and poses a risk to our country’s economic and national security,” Treasury Secretary Janet Yellen said in a statement about the new rules. “With the new beneficial ownership framework, we are making huge strides towards changing that.”