Supporting Statement
OMB Control Number 1506-0076 (RIN 1506-AB49)
Beneficial Ownership Information Reporting Requirements
1. Circumstances necessitating collection of information.
The Financial Crimes Enforcement Network (FinCEN) exercises regulatory functions primarily under the Currency and Foreign Transactions Reporting Act of 1970, as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), Public Law 107–56 (October 26, 2001), and other legislation, including the Corporate Transparency Act (CTA).1 The overall legislative framework is commonly referred to as the Bank Secrecy Act (BSA). The CTA added a new section to the BSA, 31 U.S.C. 5336, to provide for collection of information about certain legal entities’ beneficial ownership.
FinCEN is issuing this statement to support the request for Office of Management and Budget (OMB) approval of:
the report (BOIR) that will be used to collect beneficial ownership information, as required by the Beneficial Ownership Information Reporting Requirements final rule (the “final rule”) that was published on September 30, 2022,2 which implements the information collection required by 31 U.S.C. 5336; and
the application (the “FinCEN identifier application”) that will be used to collect information from individuals that seek to obtain a FinCEN identifier, in accordance with the final rule.
On January 17, 2023, FinCEN issued a 60-day notice, consistent with the requirements of the Paperwork Reduction Act of 1995 (PRA), which proposed the BOIR for public comment (the “BOIR Notice”). The comment period for the BOIR Notice closed on March 20, 2023.3 On January 17, 2023, FinCEN also proposed the FinCEN identifier application for public comment (the “FinCEN Identifier Notice”). The comment period for the FinCEN Identifier Notice closed on March 20, 2023.4
This statement identifies the estimated burden hours for the OMB control number associated with the final rule. The final rule applies to certain domestic and foreign legal entities that the final rule, like the CTA, calls “reporting companies.” Under the final rule, reporting companies include all corporations, limited liability companies, and other similar entities created by the filing of a document with a secretary of state or similar office of a state, territory, or Indian Tribe, subject to certain specific exemptions. Reporting companies also include all corporations, limited liability companies, and other similar entities formed under the law of a foreign country that are registered to do business in the United States by the filing of a document with a secretary of state or similar office, subject to the same exemptions.5
The final rule requires reporting companies to report to FinCEN information identifying themselves and specific individuals, namely: any individual who directly or indirectly exercises substantial control over the reporting company, or who owns or controls 25 percent or more of the entity’s ownership interests (each a “beneficial owner”); and the individual who filed the documents necessary to form or register the reporting company with a secretary of state or similar office, as well as the individual (if more than one individual is involved in the filing) who is primarily responsible for directing or controlling the filing (each a “company applicant”).6 The reported information is collectively referred to in the final rule and here as “beneficial ownership information” or BOI. Under the final rule, reporting companies created or registered on or after the effective date of the final rule are required to report BOI to FinCEN within 30 days of formation.7 Reporting companies already in existence before the effective date of the final rule will have one year after the effective date of the final rule to report information about beneficial owners; they are not required to report information about their company applicants.8 Both existing and newly created or registered reporting companies will have to report corrected or updated BOI to FinCEN if previously reported BOI was or becomes inaccurate or out of date, or when an entity that was a reporting company becomes exempt. Reporting companies will not be required to update BOI related to company applicants.
As noted above, in the final rule, FinCEN requires reporting companies to submit certain identifying information when they report BOI about individual beneficial owners and company applicants. This identifying information is necessary to make the reports mandated by the CTA usable by allowing FinCEN to match beneficial owners with the entities that they own or control, and company applicants with the entities for which they have filed documents.
The final rule also requires that certain foreign pooled investment vehicles report limited BOI to FinCEN as required by the CTA.9 In addition, the final rule requires that these foreign pooled investment vehicles submit some limited information identifying the foreign pooled investment vehicle. This identifying information is necessary to make the reports mandated by the CTA usable by allowing FinCEN to match the foreign pooled investment vehicle with the limited BOI that it reports.
Finally, the final rule requires that individuals and entities wishing to obtain a unique identifier to be reported in lieu of BOI in certain circumstances (a “FinCEN identifier”) submit certain identifying information about themselves.10 Individuals that obtain FinCEN identifiers will have to report updated or corrected information about themselves if previously reported information becomes out of date or was incorrect when filed.
The collection of information in the final rule is necessary to fulfill FinCEN’s statutory obligation under the CTA to require reporting of BOI, create a highly useful database of that BOI, and make the BOI from the database available to authorized users subject to statutory access limitations.11 As required by the CTA, FinCEN has aimed to minimize burdens on reporting companies to the extent practicable, while also fulfilling the statutory mandate to generate a database that is highly useful to national security, intelligence, and law enforcement agencies and Federal functional regulators.12
2. Method of collection and use of data.
FinCEN intends to collect BOI from reporting companies through a form, referred to as a BOIR, that will be available electronically. FinCEN is aware that some possible BOIR filers may lack internet access and is already engaging with partners, such as secretaries of state of relevant states, to determine how to address this issue.
As discussed in more detail in Section 8, FinCEN published the BOIR Notice in the Federal Register on January 17, 2023, with the proposed data fields for the BOIR set out as an appendix to the BOIR Notice. This appendix identified the specific information that a reporting company will be required to submit about itself, its beneficial owner(s), and its company applicant(s).
FinCEN also intends to collect identifying information from reporting companies wishing to obtain FinCEN identifiers through the electronically available BOIR. However, FinCEN intends to collect identifying information from individuals wishing to obtain FinCEN identifiers through a separate electronically available application, the FinCEN identifier application. Individuals will also use this separate application to provide updated information associated with their FinCEN identifier. As discussed in more detail in Section 8, the FinCEN Identifier Notice also was published in the Federal Register on January 17, 2023, with the proposed data fields for the FinCEN identifier application as an appendix to the FinCEN Identifier Notice. This identified the information that an individual will be required to submit if they wish to obtain a FinCEN identifier.
Under the CTA, FinCEN is authorized to disclose BOI and FinCEN identifier information to certain authorized users, subject to appropriate protocols to protect the security and confidentiality of the information. Subject to certain limitations and access requirements, authorized users of BOI include: Federal agencies engaged in national security, intelligence, or law enforcement activities; state, local, or Tribal law enforcement agencies; foreign law enforcement, judicial, or prosecutorial authorities; financial institutions subject to customer due diligence requirements; certain Federal functional regulators and other appropriate regulatory agencies; and Department of the Treasury officers and employees for their official duties, including for tax administration purposes.13
The information collected is intended to assist law enforcement in anti-money laundering, tax, and other financial investigations; advance counterterrorism, counter-proliferation, and broader national security and intelligence interests; improve financial institutions’ ability to assess and mitigate risk; help prevent evasion of financial sanctions; facilitate tax compliance; enhance the financial transparency; and advance U.S. compliance with international standards and information sharing commitments. Moreover, the reporting required by the CTA may make illicit financial activity in the United States more difficult by increasing barriers for illicit actors to covertly transact through shell or front companies within the U.S. economy. Recent geopolitical events have reinforced the threat that abuse of corporate entities, including shell or front companies, by illicit actors and corrupt officials presents to the U.S. national security and the U.S. and international financial systems. The aftermath of Russia’s illegal annexation of Crimea in March 2014 and unlawful invasion of Ukraine in February 2022 make clear that Russian elites, state-owned enterprises, and organized crime, as well as the Government of the Russian Federation have attempted and will continue to attempt to use U.S. and non-U.S. shell companies to evade sanctions imposed on Russia. Money laundering and sanctions evasion by these sanctioned Russians pose a significant threat to the national security of the United States and its partners and allies.
The collection of BOI in a centralized database, accessible to U.S. Government departments and agencies, law enforcement, tax authorities, and financial institutions, may also help to level the playing field for honest businesses, including small businesses with fewer resources, that are at a disadvantage when competing against criminals who use shell companies to evade taxes, hide their illicit wealth, and defraud employees and customers.
While the CTA sets out general BOI use-and-access protocols, the statute requires FinCEN to issue regulations concerning those protocols. On December 16, 2022, FinCEN published a notice of proposed rulemaking regarding access to BOI by authorized recipients, which included the protocols on security and confidentiality required by the CTA (Access NPRM).14 The Access NPRM had a 60-day comment period that closed on February 14, 2023.
3. Use of improved information technology to reduce burden.
Reporting companies and persons applying for FinCEN identifiers will be required to submit information electronically.
4. Efforts to identify duplication.
There are no Federal rules that directly or fully duplicate or overlap with the final rule, or that require the reporting of the same information. Therefore, there is no information already available to the Federal government that could be used or modified to fully satisfy the statutory requirements identified in Section 1 above or that fully serve the uses identified in Section 2 above.
FinCEN identified several areas of possible or apparent partial overlap, but none of the following appear to involve any significant duplication of effort.
The CTA requires the Administrator for Federal Procurement Policy to revise the Federal Acquisition Regulation maintained under 41 U.S.C. 1303(a)(1) to require any contractor or subcontractor that is subject to the reporting requirements of the CTA and the final rule to disclose the same information to the Federal government as part of any bid or proposal for a contract that meets the threshold set in 41 U.S.C. 134.15 Additionally, Congress created a new beneficial ownership disclosure requirement for the database of Federal agency contract and grant officers that already exists pursuant to 41 U.S.C. 2313(d). FinCEN will collaborate with the Administrator for Federal Procurement Policy and other government agencies as necessary to reduce, to the extent possible, any duplication of the CTA requirements.
FinCEN is aware that the Internal Revenue Service (IRS) collects taxpayer information that may include information related to beneficial ownership, such as information on entity ownership structure and identifying information about such entities and their owners. However, limits on IRS disclosure of taxpayer information are inconsistent with the broad uses of beneficial ownership information envisioned in the CTA .
FinCEN is also aware that financial institutions subject to FinCEN’s 2016 rule regarding customer due diligence16 (2016 CDD Rule) are required to collect some beneficial ownership information from legal entities that establish new accounts.17 However, the 2016 CDD Rule does not require these financial institutions to file a report with FinCEN containing that information. The CTA requires that the 2016 CDD Rule be revised within one year after the effective date of the final rule. The CTA explicitly identifies three purposes for this revision: to bring the rule into conformity with the AML Act as a whole, including the CTA; to account for any access that financial institutions will have to the database of BOI for the limited purpose of facilitating compliance with their own customer due diligence obligations; and to reduce unnecessary or duplicative burdens on financial institutions and customers.
Finally, FinCEN is aware that the Secure Federal LEASEs Act requires most Federal agencies with leasing authority to identify the beneficial owners of prospective lessors before entering into leases of space intended as high security leased space, in conformity with a government-wide plan to be developed by General Services Administration (GSA).18 FinCEN is working with GSA to harmonize the definitions used in this government-wide plan with those used in the final rule.
5. Methods to minimize burden on small businesses or other small entities.
To the extent practicable, and consistent with its statutory obligations, FinCEN has followed the CTA’s mandate to: (1) minimize burdens on reporting companies associated with the collection of BOI, including by eliminating duplicative requirements; and (2) ensure that the BOI reported to FinCEN is accurate, complete, and highly useful. In addition, FinCEN aims to minimize the burden on small businesses by providing clear guidance on how to comply with the final rule. For instance, FinCEN has published a Small Entity Compliance Guide and other educational materials, such as infographics and an introductory video, in an effort to lessen the burden on small businesses by simply explaining to them what they need to report.
6. Consequences to the Federal government of not collecting the information.
Legal entities, including corporations, limited liability companies, and similar entities, play an essential and legitimate role in the U.S. and global economies. However, they can also be used to engage in illicit activity, launder the proceeds of illicit activity, or enable those who threaten U.S. national security to access and transact in the U.S. economy.
Requiring the disclosure of beneficial owners and company applicants is intended to help the Federal government protect U.S. national security, fight financial and other crime, promote financial integrity and compliance with key international standards, and may also help to level the playing field for honest businesses, including small businesses with fewer resources, that are at a disadvantage when competing against criminals who use shell companies to evade taxes, hide their illicit wealth, and defraud employees and customers. Not collecting this information would deprive authorized recipients, such as those engaged in law enforcement or national security activities, of a valuable source of information to combat money laundering, terrorist financing, and other illicit activities.
7. Special circumstances requiring data collection inconsistent with guidelines.
There are no special circumstances under which the final rule will require data collection inconsistent with guidelines.
8. Consultation with individuals outside of the agency on availability of data, frequency of collection, clarity of instructions and forms, and data elements.
Comments received in response to the BOIR Notice and FinCEN Identifier Notice are addressed below in Sections 8.A and 8.B, respectively.
A. Comments to the BOIR 60-day Notice
FinCEN received a number of comment letters on the BOIR Notice from: individuals; anti-corruption advocacy groups; business associations; corporate service providers; corporate transparency advocacy groups; financial services industry groups; financial institutions; legal association; anonymous commenters; and members of Congress (by way of one jointly signed letter).19 The comment letters to the BOIR Notice addressed four topics: (1) the option on the proposed BOIR to allow incomplete filings; (2) proposed data field revisions to the BOIR; (3) clarifications and guidance; and (4) FinCEN’s burden estimate in connection with the BOIR in the final rule’s regulatory impact analysis. FinCEN carefully considered the comments received in revising the BOIR and its proposals contained in this statement regarding ways to effectively implement the CTA reporting requirements consistent with the statute.
FinCEN also received comments related to the BOIR in response to the notice of proposed rulemaking (NPRM) for the Access Rule,20 notwithstanding that the subject matter of those comments was not within the scope of that NPRM. Because the issues raised within those comments relate to the BOIR Notice, FinCEN has considered the BOIR-related comments received in response to the Access Rule NPRM in this supporting statement.
1. Option to allow incomplete filings.
Comments received: Commenters were uniformly critical of the generic “unknown” checkboxes that would allow a reporting company to indicate if certain information about a beneficial owner or company applicant is “unknown” or if the reporting company is “unable to identify” any information about a beneficial owner or company applicant (referred to by commenters as “unknown” checkboxes). Several of these commenters requested that FinCEN remove all such checkboxes, arguing that the checkboxes would effectively make the CTA an optional reporting regime, contrary to the statutory requirements of the CTA.
Several commenters expressed concern with the usefulness of the registry to authorized users if such checkboxes are included in the final BOIR. One commenter suggested that the availability of these checkboxes could discourage reporting companies from undertaking a “diligent inquiry” to secure the requisite information.
Some of these commenters acknowledged that there would be situations where reporting companies are legitimately unable to obtain and provide the required BOI.
Response: In response to the comments, FinCEN is pursuing a revised approach to the BOIR Form that will not contain unknown checkboxes. This approach will consist of a first implementation that will be used starting January 1, 2024, and a potential alternative implementation, which would only be adopted a later date following feedback from filers, law enforcement agencies, and other key stakeholders.
The first implementation will require every field to be completed (i.e., have responses entered in text boxes), and a filer will only be able to submit the BOIR Form once each required field has been filled out. In the first implementation, any field left blank, whether intentionally or accidentally, will prevent the filer from submitting their BOIR Form. It is our hope that filers will find the filing process to be seamless, users of the database will determine that the information collected is accurate, and all stakeholders, including law enforcement, will find this implementation to be sufficiently straightforward, transparent, and efficient.
FinCEN believes the removal of the “unknown” checkboxes will provide clear notice to reporting companies that they must take steps necessary to identify beneficial owner and company applicant information As some commenters emphasized, an approach that incentivizes full compliance with BOI reporting, coupled with a proactive enforcement strategy, could increase data integrity over time. This revised approach also accounts for commenter views that allowing the filing of incomplete BOIRs will undermine the integrity of the reporting requirement and the usefulness of the BOI information technology system (BOI IT System).
FinCEN is cognizant that reporting companies could face difficulties in obtaining information promptly. To better understand this potential concern, FinCEN consulted with behavioral scientists at the General Services Administration, technology experts at the Department of the Treasury, and various others throughout the U.S. Government who have expertise around these issues. The consultations highlighted potential, though not inevitable, pitfalls in not providing an explanatory mechanism in the BOIR Form when a filer is unable to obtain certain required information. This might inadvertently discourage reporting companies from filing in a timely manner (or filing at all) because they do not have sufficient information. It may also incentivize reporting companies to file meaningless or untruthful information in certain fields to make a deadline. These difficulties also have the potential to significantly increase the volume of inquiries to FinCEN’s Contact Center21 from reporting companies that seek clarification of the filing requirements when they are unable to obtain BOI.
Bearing these potential concerns in mind, in addition to feedback from filers and database users in the months following the first implementation, FinCEN may consider an alternative implementation. The alternative implementation would have the same response fields that require the same information to be reported, and reporting companies would be required to provide accurate responses in every field to submit a filing. However, this implementation would provide a mechanism for filers to indicate if they are temporarily unable to provide certain information for certain reasons. Specifically, there would be a drop-down option in the Beneficial Owner(s) section that would allow filers to specify one of several reasons why they are temporarily unable to provide a piece of information about a beneficial owner. FinCEN is considering several drop-down options, including (but not limited to): “Cannot Contact BO”; “BO Unresponsive”; “BO Refused to Provide”; and “Third Party Refused to Provide.” Drop-down options will not be included in the other sections of the form (i.e., Reporting Company Section and Company Applicant(s) Section). Forms whose filers select a drop-down option will be accepted into the filing system but will still be considered incomplete and non-compliant filings. Forms will only be considered complete and compliant once the missing information is subsequently added, the drop-down option is removed from each field, and the form is updated. FinCEN will be seeking feedback from database users, including filers and law enforcement, on these options.
FinCEN’s adoption of the alternative (drop-down) implementation will be informed by feedback from stakeholders, including filers and law enforcement agencies. The filer experience, the usefulness of information for law enforcement, and the overall quality of the data reported to FinCEN will be some of the key metrics taken into consideration. Ultimately, any decision to adopt the alternative implementation with drop-down options, should it be pursued at all, would only be made after careful analysis of the initial implementation. Equally as important, should FinCEN adopt the alternative implementation, FinCEN will issue guidance well in advance of any change, and there will only ever be one of the implementations “live” that filers can see and use. FinCEN believes that this revised approach will best address the feedback from commenters and maintain appropriate flexibility to adapt the BOIR Form to meet the needs of filers, database users, and other important stakeholders based on what FinCEN learns after the system becomes operational.
The benefit of this implementation would be to (1) provide a mechanism for the collection of some beneficial ownership information that would be of immediate use to law enforcement agencies and other authorized users of BOI; (2) provide insight into any common difficulties that might arise so that FinCEN can potentially provide guidance, frequently asked questions (FAQs), or follow-up with reporting companies or beneficial owners; and (3) provide notice for FinCEN that an incomplete report has been submitted and facilitate appropriate related follow-up.
In both implementations, FinCEN intends to make clear on the BOIR that reporting companies must provide all required information to satisfy their reporting obligations. For example, the BOIR will include tool tips (i.e., text boxes that will be displayed for a BOIR field or section, which will convey requirements, instructions, and clarifying information for the particular field or section. If a drop-down option is selected, the BOIR would make clear that the reporting company is expected to continue to try and locate the missing information and ultimately submit a fully completed form. The BOIR will also include a certification whereby filers must certify that the information furnished is true, correct, and complete. A compliance reminder, which will be posted below the certification on the BOIR, will remind filers that the willful failure to report complete or updated BOI to FinCEN, or the willful provision of false or fraudulent BOI to FinCEN, may result in civil or criminal penalties. FinCEN will also address this requirement in guidance documents and other materials, such as press releases, briefings, and frequently asked questions (FAQs).
2. Proposed data field revisions
Several commenters requested specific revisions to data fields on the form. Specifically, commenters recommended removing fields, adding new fields, moving fields, and revising the language of fields.
Commenters’ recommended changes in the data fields related to:
Filing information: Remove line 1(d) (newly exempt entity);
Reporting company information: Add a new field for filers to disclose the type of entity submitting the report;
Foreign pooled investment vehicles: Move line 4 (foreign pooled investment vehicle) into line 10h (foreign reporting company question);
Company applicant information: Move line 16 (existing reporting company) under Part II (company applicant information) and disable fields in Part II if line 16 is checked (as this information would not be required);
Beneficial owner information: Add a data field to identify each beneficial owner as an owner or control person, as appropriate;
Address fields: Specify that “current U.S. address” refers to the street address; and
Identifying documents: Remove lines 33 (identifying document image for company applicant) and 51 (identifying document image for beneficial owner).
FinCEN took these comments into consideration in making specific changes to the BOIR.
3. Clarifications and guidance
Several commenters requested clarification and guidance on the BOIR and the BOIR filing process. These comments related to the following:
Instructions: Some commenters recommended adding clear instructions for filling out the form. FinCEN intends to make available detailed instructions for filers that clearly explain how to fill out the BOIR. FinCEN published guidance materials on its website and also issued a Small Entity Compliance Guide that provides comprehensive information about the beneficial ownership information reporting requirements.
Privacy / confidentiality: Some commenters recommended adding specific language on the form indicating that Treasury/FinCEN will keep information submitted in a BOIR confidential. As explained in greater detail in the preamble to the final rule and corresponding FAQs, FinCEN takes seriously its responsibility to protect BOI and will ensure that BOI submitted to FinCEN will be used only for statutorily authorized purposes and will be subject to stringent use and security protocols, consistent with the requirements of the CTA. Given FinCEN’s desire to keep the BOIR as short and uncomplicated as reasonably practical, FinCEN is not including a statement about these use and security protocols in the BOIR itself.
Submission of multiple BOIRs: Commenters asked whether FinCEN will require that each BOIR be completed and submitted online individually, or whether service providers could develop methods to complete and submit BOIRs via a direct link from service provider systems to the registry, to enable more efficient processing of BOIRs where services providers are involved in filing the reports on behalf of entities. FinCEN realizes that this would be a helpful tool for many filers and third parties, and is working to prepare such a tool as soon as possible, taking into account relevant resource, technology, and security considerations.
Paper submissions: Commenters recommended that FinCEN allow for the paper submission of BOIRs. BOIRs generally must be filed electronically through a secure filing system that will be available via FinCEN’s website starting January 1, 2024. FinCEN will not accept paper filings. Filers will be directed to contact FinCEN’s Contact Center if they are unable to file a BOIR electronically.
Filing information: Commenters recommended guidance on the options on lines 1(a) (initial report); 1(b) (update prior report); 1(c) (correct prior report); and 1(d) (newly exempt entity). The final BOIR, and the related instructions and tool tips, will include clarifying guidance on how to complete all fields in the form, including lines 1(a) through 1(d).
Reporting company information: Commenters requested clarifications in line 5 (reporting company legal name) and line 10e (foreign reporting company, state of first registration). The instructions and tool tips accompanying the form will provide clarification for these lines. FinCEN will also take these comments under consideration as a possible subject for future guidance.
Foreign pooled investment vehicles: Commenters suggested that the BOIR specify that a foreign pooled investment vehicle that is required to file a report to identify an individual exercising substantial control over the pooled investment vehicle should complete Part III of the report on beneficial owners (rather than Part II on company applicants). In the final BOIR, if line 4 is checked (foreign pooled investment vehicle), fields for company applicant information (Part II) will automatically be disabled and the filer will only be able to provide information for one beneficial owner in Part III.
Company applicant information: Commenters recommended additional guidance at the beginning of Part II to explain that if the checkbox for line 16 (existing reporting company) is selected, the filer should proceed to Part III. If the checkbox for line 16 is selected, the fields for company applicant information (Part II) will automatically be disabled. The final BOIR will include additional guidance at the beginning of Part II to explain that if line 16 (existing reporting company) is checked, the filer does not have to complete Part II and should proceed to Part III.
Beneficial ownership information: Commenters requested guidance for situations where beneficial owners (aside from minor children) are under guardianship. FinCEN will take such situations into consideration as a possible subject for future guidance materials.
Address fields: Several commenters requested that the address fields specify the type of address to be provided. The final BOIR will include specific instructions and clarifying information, such as tool tips, for address fields to explain what specific information a filer must provide.
Identifying document: Commenters recommended that FinCEN add guidance to line 30d to indicate that foreign passports should only be provided if an individual does not possess a state-issued driver’s license, state/local/Tribe-issued ID, or U.S. passport. The final BOIR will include specific instructions and clarifying information to explain that a foreign passport should only be provided as an identifying document if an individual does not possess a state-issued driver’s license, state/local/Tribe-issued ID, or U.S. passport.
Certification: Commenters noted that certification language was not provided in the list of fields in the BOIR Notice and requested that it be added. FinCEN regrets any confusion or uncertainty that resulted from the BOIR Notice not disclosing the specific certification language that will appear when a filer submits the BOIR. FinCEN will provide certification language and ensure filers are reminded that the willful provision of false or fraudulent information required to be reported to FinCEN pursuant to 31 C.F.R. 1010.380 may result in civil or criminal penalties.
Americans with Disabilities Act – Section 508 Compliance: One commenter stated that it is imperative that the website for the collection of BOIR be in compliance with the Americans with Disabilities Act. FinCEN continually assesses its website for compliance with Section 508 the Americans with Disabilities Act.
4. Burden
Two commenters requested that the burden estimate of the information collection in the final rule’s regulatory impact analysis be revisited. These comments relate to: (a) costs to financial institutions; and (b) FinCEN’s assumptions and burden estimates more generally.
Costs to financial institutions
Comment received: One commenter noted that FinCEN’s burden analysis should consider costs to financial institutions in responding to customers’ questions about the reporting requirement.
Response: FinCEN’s regulatory impact analysis considered the relevant costs of the reporting rule. FinCEN understands that, although there is no requirement for financial institutions to assist reporting companies in complying with the rule, many nonetheless will. This burden is not reflected in the regulatory impact analysis despite this reality given the scope of analysis that is required. However, FinCEN considered that reporting companies may reach out to other entities, particularly state authorities, regarding how to comply with the reporting requirement.
As noted in the final rule, FinCEN is committing significant resources to prepare for and enable the rule’s successful implementation by stakeholders. These resources will be dedicated to outreach; the drafting and issuance of guidance, FAQs, and interpretive advice; and other procedures and activities.22 FinCEN recognizes the need to ensure that reporting companies, authorized users, and other stakeholders have a thorough understanding of the final rule and its requirements, both before and after the effective date. In addition, FinCEN remains mindful of the imperative to minimize any associated burdens on reporting companies while also fulfilling the CTA’s directives for establishing an effective reporting framework.23 As FinCEN has confirmed on numerous occasions, outreach and education are important elements of the effort to reduce any such compliance burdens.
Additionally, FinCEN estimated in the regulatory impact analysis the cost of reporting companies consulting with professionals, such as lawyers and accountants, regarding the reporting requirement.
Assumptions and burden estimates, in general
Comment received: One commenter provided detailed feedback on the regulatory analysis presented in the final rule. The commenter noted that FinCEN’s regulatory impact analysis included many assumptions, as FinCEN itself made clear throughout the analysis. The comment also suggested changes to the analysis and stated that the burdens estimated in the analysis are grossly underestimated.
Response: FinCEN assesses that the final rule’s regulatory impact analysis considered the suggestions raised by the commenter in a manner that was reasonable, albeit not the manner suggested by the commenter. FinCEN will continue to evaluate the burden and impact of the BOI reporting requirement throughout its implementation.
B. Comments to the FinCEN Identifier Application 60-day Notice
In response to the 60-day notice, FinCEN received comment letters from: individuals, corporate service providers, financial services industry groups, business associations, and religious organizations. Several commenters requested clarifications and specific revisions to data fields on the FinCEN Identifier Application.
These comments related to:
Allowing paper submission of applications;
Adding specific language on the application indicating that Treasury/FinCEN shall keep information submitted in the form as confidential;
Adding guidance to indicate a foreign passport should only be provided if an individual does not possess a state-issued driver’s license, state/local/Tribe-issued ID, or U.S. passport;
Allowing for redaction of non-relevant information;
Specifying the purpose for obtaining a FinCEN identifier (company applicant or beneficial owner);
Company applicant information updates;
FinCEN identifier application timing;
Certification language; and
Retiring/cancelling a FinCEN identifier.
FinCEN carefully considered these comments, which resulted in changes to specific lines that are reflected in the revised FinCEN Identifier Application.
9. Payments and gifts.
No payments or gifts were made to respondents.
10. Assurance of confidentiality of responses.
Pursuant to 31 U.S.C. 5336(c), BOI and FinCEN-identifier information collected under 31 U.S.C. 5336(b) is confidential and may not be disclosed except as authorized. The CTA authorizes disclosure of BOI to certain categories of users, subject to appropriate protocols to protect the security and confidentiality of the information. Subject to certain limitations and access requirements, authorized users of BOI include: Federal agencies engaged in national security, intelligence, or law enforcement activities; state, local, or Tribal law enforcement agencies; foreign law enforcement, judicial, or prosecutorial authorities; financial institutions subject to customer due diligence requirements; certain Federal functional regulators and other appropriate regulatory agencies; and Department of the Treasury officers and employees for their official duties, including for tax administration purposes.24
As noted in Section 2, on December 16, 2022, FinCEN published the Access NPRM regarding the specific protocols that will govern authorized users’ access to BOI.25 FinCEN has issued a new System of Records Notice (SORN) for BOI collected in connection with the implementation of the CTA, which publicly identified the routine uses of the information (88 FR 62889, 9/13/2023) .
11. Justification of sensitive questions.
There are no questions of a sensitive nature in the collection of information. Access to any personally identifiable information collected under the CTA will be strictly controlled, as will be outlined in the SORN applicable to the information (see item 10 above).
12. Estimated annual hourly burden.
FinCEN estimated the annual hourly burden for two information collections under the rule: BOI reports and FinCEN identifier applications for individuals.26 Each information collection includes estimates for initial and updated reports or applications, as the final rule requires updated information be submitted to FinCEN if there are changes after the submission of an initial report. Additionally, each information collection includes estimates for Year 1 and then annual estimates for any year after Year 1 (Year 2+). This is because the final rule will require that all currently existing entities report BOI within Year 1.
FinCEN estimates that the time burden per BOIR will vary depending on the complexity of a reporting company’s structure. FinCEN therefore estimates a range of time burdens associated with filing an initial BOIR to account for the likely variance among reporting companies. FinCEN estimates the average burden of reporting BOI as 90 minutes per response for reporting companies with simple beneficial ownership structures (1 beneficial owner who is also the company applicant), which are estimated to be 59 percent of reporting companies.27 FinCEN estimates the average burden of reporting BOI as 650 minutes per response for reporting companies with complex beneficial ownership structures (8 beneficial owners and 2 company applicants), which are estimated to be 4.9 percent of reporting companies.28 FinCEN estimates the average burden of updating such reports for reporting companies with simple beneficial ownership structures as 40 minutes per update.29 FinCEN estimates the average burden of updating such reports for reporting companies with complex beneficial ownership structures as 170 minutes per update.30
FinCEN also estimated that reporting companies with intermediate beneficial ownership structures (4 beneficial owners and 1 company applicant) are 36.1 percent of reporting companies. Companies with intermediate beneficial ownership structures are assumed to have a time burden that is the average of the time burden for reporting companies with simple and complex beneficial ownership structures. This results in a time burden of 370 minutes for initial BOI reports31 and 105 minutes for updated BOI reports. 32
FinCEN anticipates that initial FinCEN identifier applications would require approximately 20 minutes,33 given that the information to be submitted to FinCEN would be readily available to the person requesting the FinCEN identifier. FinCEN estimates that updates would require 10 minutes.34
A. BOI Reports
Frequency: As required.
Estimated Number of Reports:
Initial reports, Year 1: 32,556,929 reports.35
Initial reports, Year 2+: 4,998,468 reports.36
Initial reports, Years 1-5 average: 10,510,160 reports.
Updated reports, Year 1: 6,578,732 reports.37
Updated reports, Year 2+: 14,456,452 reports.38
Updated reports, Years 1-5 average: 12,880,908 reports.
Estimated Total Reporting Burden Hours:
Initial reports, Year 1: 118,572,335 hours.39
Initial reports, Year 2+: 18,204,421 hours.40
Initial reports, Years 1-5 average: 38,285,493 hours.
Updated reports, Year 1: 7,657,096 hours.41
Updated reports, Year 2+: 16,826,105 hours.42
Updated reports, Years 1-5 average: 14,995,237 hours.
B. Individual FinCEN Identifiers
Frequency: As required.
Estimated Number of Applications:
Initial applications, Year 1: 325,569 applications.43
Initial applications, Year 2+: 49,985 applications.44
Initial applications, Years 1-5 average: 105,102 applications.
Updated applications, Year 1: 12,180 applications.45
Updated applications, Year 2+: 26,575 applications.46
Updated applications, Years 1-5 average: 23,696 applications.
Estimated Total Reporting Burden Hours:
Initial applications, Year 1: 108,523 hours.47
Initial applications, Year 2+: 16,662 hours.48
Initial applications, Years 1-5 average: 35,034 hours.
Updated applications, Year 1: 2,030 hours.49
Updated applications, Year 2+: 4,429 hours.50
Updated applications, Years 1-5 average: 3,949 hours.
The burden hours for these collections are totaled in the table below:
Year 1 |
||
Information Collection |
Count of Reports |
Burden Hours |
Initial BOI reports |
32,556,929 |
118,572,335 |
Updated BOI reports |
6,578,732 |
7,657,096 |
FinCEN identifier applications for individuals |
325,569 |
108,523 |
FinCEN identifiers updates for individuals |
12,180 |
2,030 |
Totals |
39,473,410 |
126,339,98451 |
Year 2+ |
||
Information Collection |
Count of Reports |
Burden Hours |
Initial BOI reports |
4,998,468 |
18,204,421 |
Updated BOI reports |
14,456,452 |
16,826,105 |
FinCEN identifier applications for individuals |
49,985 |
16,662 |
FinCEN identifiers updates for individuals |
26,575 |
4,429 |
Totals |
19,531,480 |
35,051,61752 |
13. Estimated annual cost to respondents for hour burdens.
As noted in the prior response, FinCEN has estimated annual cost for two information collections under the final rule.53 Each information collection includes estimates for costs of initial and updated reports or applications. Additionally, each information collection includes cost estimates for Year 1 and then annual cost estimates for any year after Year 1 (Year 2+). FinCEN applies an average wage rate of $56.76 throughout the analysis.54
A. BOIRs
FinCEN estimates the average cost of filing an initial BOIR per reporting company to be $85.14 for those with a simple ownership structure, $1,350.00 for those with an intermediate reporting structure, and $2,614.87 for those with a complex ownership structure.55 FinCEN estimates the average cost of filing an updated BOIR per reporting company to be $37.84 for those with a simple ownership structure, $299.33 for those with an intermediate ownership structure, and $560.81 for those with a complex ownership structure.56
Estimated Total Reporting Cost:
Initial reports, Year 1: $21,673,487,885.48.57
Initial reports, Year 2+: $3,327,532,419.21.58
Initial reports, Years 1-5 average: $6,996,723,512.
Updated reports, Year 1: $1,038,524,428.72.59
Updated reports, Year 2+: $2,282,108,290.77.60
Updated reports, Years 1-5 average: $2,033,391,518.
B. Individuals Applying for a FinCEN Identifier
Estimated Total Reporting Cost:
Initial applications, Year 1: $6,159,488.81.61
Initial applications, Year 2+: $945,666.84.62
Initial applications, Years 1-5 average: $1,988,431.
Updated applications, Year 1: $115,218.68.63
Updated applications, Year 2+: $251,386.22.64
Updated applications, Years 1-5 average: $224,153.
The costs for these collections are totaled in the table below:
Year 1 |
|
Information Collection |
Cost |
Initial BOI reports |
$21,673,487,885.48 |
Updated BOI reports |
$1,038,524,428.72 |
FinCEN identifier applications for individuals |
$6,159,488.81 |
FinCEN identifiers updates for individuals |
$115,218.68 |
Totals |
$22,718,287,021.69 65 |
Year 2+ |
|
Information Collection |
Cost |
Initial BOI reports |
$3,327,532,419.21 |
Updated BOI reports |
$2,282,108,290.77 |
FinCEN identifier applications for individuals |
$945,666.84 |
FinCEN identifiers updates for individuals |
$251,386.22 |
Totals |
$5,610,837,763.0466
|
The average total cost of Years 1-5 of these collections is $9,032,327,614.77.
14. Estimated annual cost to the Federal government.
Administering the regulation would entail costs to FinCEN. Such costs include information technology development and ongoing annual maintenance to securely collect, process, store, and make available electronic submissions of BOI data. FinCEN’s cost estimates for development and annual maintenance are $72 million and $25.6 million, respectively, to meet the minimum system capabilities required by the rule, which includes capabilities related to the collection of images. While FinCEN expects that it will be able to leverage some existing BSA components, the feedback received throughout the rulemaking process has made clear that the Beneficial Ownership Secure System architecture will be complex to design, build, and maintain. For example, the system of record (or database) for the beneficial ownership data will need to be segregated from the existing BSA system of record, and there will need to be another system of record to store the FinCEN identifier information. There will also need to be a separate user application with individual authentication requirements to perform work necessary to administer the FinCEN identifier. System engineering efforts have occurred simultaneously with the rulemaking process, which has involved significant input from various stakeholder groups with various access and disclosure requirements. This input has made clear to FinCEN that the user access and authentication will be complicated to design and develop.
FinCEN will incur additional costs, besides those estimated above, to ensure successful implementation of and compliance with the BOI reporting requirements. These include personnel to support CTA implementation, draft regulations, conduct regulatory impact analyses and stakeholder outreach, conduct audits and inspections, adjudicate requests for BOI, provide training on the requirements, publish documents such as guidance and FAQs, and conduct outreach to and answer inquiries from the public. FinCEN estimates that there will be personnel costs of approximately $10 million associated with the rule in Fiscal Year 2023, with continuing recurring costs of roughly the same magnitude for ongoing implementation, outreach, and enforcement each year thereafter.
Therefore, for purposes of total cost analysis in the final rule’s regulatory impact analysis, total costs to FinCEN are $82 million in Year 1 and $35.6 million annually thereafter.
15. Reason for change in burden.
There is no change in the burden estimate from the final rule.
16. Plans for tabulation, statistical analysis, and publication.
The information will not be tabulated or compiled for publication.
17. Request not to display expiration date of OMB control number.
FinCEN requests that it not be required to display the expiration date so that the regulations will not have to be amended for the new expiration date every three years.
18. Exceptions to the certification statement.
There are no exceptions to the certification statement.
1 The CTA is Title LXIV of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, Pub. L. 116-283 (January 1, 2021) (the NDAA). Division F of the NDAA is the Anti-Money Laundering Act of 2020 (the AML Act), which includes the CTA. Section 6003(1) of the AML Act defines the BSA as comprising Section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b), Chapter 2 of Title I of Public Law 91-508 (12 U.S.C. 1951 et seq.), and Subchapter II of Chapter 53 of Title 31, United States Code. Congress has authorized the Secretary of the Treasury (the Secretary) to administer the BSA. The Secretary has delegated to the Director of FinCEN the authority to implement, administer, and enforce compliance with the BSA and associated regulations. Treasury Order 180–01 (Jan. 14, 2020).
2 FinCEN, Beneficial Ownership Information Reporting Requirements, 87 FR 59498 (Sept. 30, 2022), available at https://www.federalregister.gov/documents/2022/09/30/2022-21020/beneficial-ownership-information-reporting-requirements.
3 FinCEN, Agency Information Collection Activities; Proposed Collection; Comment Request; Beneficial Ownership Information Reports, 88 FR 2760 (Jan. 17, 2023), available at https://www.federalregister.gov/documents/2023/01/17/2023-00703/agency-information-collection-activities-proposed-collection-comment-request-beneficial-ownership.
5 FinCEN, Beneficial Ownership Information Reporting Requirements, FR 59593 (Sept. 30, 2022), available at https://www.federalregister.gov/documents/2022/09/30/2022-21020/beneficial-ownership-information-reporting-requirements. See also 31 U.S.C. 5336(a)(11).
6 FinCEN, Beneficial Ownership Information Reporting Requirements, 87 FR 59594-96 (Sept. 30, 2022), available at https://www.federalregister.gov/documents/2022/09/30/2022-21020/beneficial-ownership-information-reporting-requirements. See also 31 U.S.C. 5336(a)(3) (beneficial owner), (2) (applicant).
7 FinCEN, Beneficial Ownership Information Reporting Requirements, 87 FR 59591-92 (Sept. 30, 2022), available at https://www.federalregister.gov/documents/2022/09/30/2022-21020/beneficial-ownership-information-reporting-requirements. See also 31 U.S.C. 5336(b)(1)(B).
8 FinCEN, Beneficial Ownership Information Reporting Requirements, 87 FR 59592 (Sept. 30, 2022), available at https://www.federalregister.gov/documents/2022/09/30/2022-21020/beneficial-ownership-information-reporting-requirements. See also 31 U.S.C. 5336(b)(1)(C).
9 FinCEN, Beneficial Ownership Information Reporting Requirements, 87 FR 59592-93 (Sept. 30, 2022), available at https://www.federalregister.gov/documents/2022/09/30/2022-21020/beneficial-ownership-information-reporting-requirements. See also 31 U.S.C. 5336(b)(2)(C).
10 FinCEN, Beneficial Ownership Information Reporting Requirements, 87 FR 59593 (Sept. 30, 2022), available at https://www.federalregister.gov/documents/2022/09/30/2022-21020/beneficial-ownership-information-reporting-requirements. See also 31 U.S.C. 5336(a)(6), (b)(3).
11 See generally CTA, Section 6403.
12 See 31 U.S.C. 5336(b)(4)(B)(i).
13 31 U.S.C. 5336(c)(2)(B)-(C), and (c)(5).
14 FinCEN, Beneficial Ownership Information Access and Safeguards, and Use of FinCEN Identifiers for Entities, 87 FR 77404 (Dec. 16, 2022), available at https://www.govinfo.gov/content/pkg/FR-2022-12-16/pdf/2022-27031.pdf.
15 CTA, Section 6403(c)(1).
16 FinCEN, Customer Due Diligence Requirements for Financial Institutions, 81 FR 29397 (May 11, 2016), available at https://www.federalregister.gov/documents/2016/05/11/2016-10567/customer-due-diligence-requirements-for-financial-institutions.
17 See 31 C.F.R. 1020.210 (CDD Rule for banks), 1023.210 (CDD Rule for broker/dealers), 1024.210 (CDD Rule for mutual funds), 1026.210 (CDD Rule for futures commission merchants and introducing brokers in commodities).
18 The Secure Federal Leases from Espionage and Suspicious Entanglements Act (Secure Federal LEASEs Act) is P.L. 116-276, 134 Stat. 3362 et seq. (Dec. 31, 2020).
19 FinCEN, Agency Information Collection Activities; Proposed Collection; Comment Request; Beneficial Ownership Information Reports, 88 FR 2760 (Jan. 17, 2023), available at https://www.federalregister.gov/documents/2023/01/17/2023-00703/agency-information-collection-activities-proposed-collection-comment-request-beneficial-ownership.
20 FinCEN, Beneficial Ownership Information Access and Safeguards, and Use of FinCEN Identifiers for Entities, 87 FR 77404 (Dec. 16, 2022), available at https://www.govinfo.gov/content/pkg/FR-2022-12-16/pdf/2022-27031.pdf.
21 FinCEN expects to establish a Contact Center prior to January 1, 2024, to field questions about the BOI reporting requirements from reporting companies and other stakeholders.
22 FinCEN published initial guidance materials on March 24, 2023.
23 See 31 U.S.C. 5336(b)(1)(F), (b)(4)(B).
24 31 U.S.C. 5336(c)(2)(B), (C), and (c)(5).
25 FinCEN, Beneficial Ownership Information Access and Safeguards, and Use of FinCEN Identifiers for Entities, 87 FR 77404 (Dec. 16, 2022), available at https://www.govinfo.gov/content/pkg/FR-2022-12-16/pdf/2022-27031.pdf
26 The estimated number of BOI reports and individuals obtaining a FinCEN identifier each year are approximate and not precise estimates. Further, any rounding produces no meaningful difference in the magnitude of FinCEN’s estimates or conclusions. FinCEN does not separately calculate a burden estimate for entities requesting a FinCEN identifier because FinCEN assumes this would already be accounted for in the process and cost of submitting the BOI reports.
27 FinCEN estimates 40 minutes to read the form and understand the requirement, 30 minutes to identify and collect information about beneficial owners and applicants, and 20 minutes to fill out and file the report, including attaching an image of an acceptable identification document for each beneficial owner and applicant, totaling 90 minutes.
28 FinCEN estimates 300 minutes to read the form and understand the requirement, 240 minutes to identify and collect information about beneficial owners and applicants, and 110 minutes to fill out and file the report, including attaching an image of an acceptable identification document for each beneficial owner and applicant, totaling 650 minutes.
29 FinCEN estimates 20 minutes to identify and collect information about beneficial owners or applicants and 20 minutes to fill out and file the update, totaling 40 minutes.
30 FinCEN estimates 60 minutes to identify and collect information about beneficial owners or applicants and 110 minutes to fill out and file the update, totaling 170 minutes.
31 FinCEN estimates 170 minutes to read the form and understand the requirement, 135 minutes to identify and collect information about beneficial owners and applicants, and 65 minutes to fill out and file the report, including attaching an image of an acceptable identification document for each beneficial owner and applicant, totaling 370 minutes.
32 FinCEN estimates 40 minutes to identify and collect information about beneficial owners or applicants and 65 minutes to fill out and file the update, totaling 105 minutes.
33 FinCEN estimates 10 minutes to read the form and understand the information required and 10 minutes to fill out and file the request, including attaching an image of an acceptable identification document, totaling 20 minutes.
34 FinCEN estimates 10 minutes to fill out and file the update.
35 This estimate aligns with FinCEN’s estimate of existing reporting companies in 2024. Please see the regulatory impact analysis in the final rule.
36 This estimate aligns with FinCEN’s estimate of new reporting companies per year after 2024. Please see the regulatory impact analysis in the final rule.
37 FinCEN estimated updated reports using a methodology that considered the probability of an event resulting in a change to the reported information over a 30-day period. Please see the regulatory impact analysis in the final rule.
38 FinCEN estimated updated reports using a methodology that considered the probability of an event resulting in a change to the reported information over a 30-day period. Please see the Paperwork Reduction Act analysis in the NPRM.
39 ((0.59 × 32,556,929) × (90 minutes /60 minutes)) + ((0.361 × 32,556,929) × (370 minutes /60 minutes)) + ((0.049 × 32,556,929) × (650 minutes /60 minutes)) = 118,572,335.
40 ((0.59 × 4,998,468) × (90 minutes /60 minutes)) + ((0.361 × 4,998,468) × (370 minutes /60 minutes)) + ((0.049 × 4,998,468) × (650 minutes /60 minutes)) = 18,204,421.
41 ((0.59 × 6,578,732) × (40 minutes /60 minutes)) + ((0.361 × 6,578,732) × (105 minutes /60 minutes)) + ((0.049 × 6,578,732) × (170 minutes /60 minutes)) = 7,657,096.
42 ((0.59 × 14,456,452) × (40 minutes /60 minutes)) ((0.361 × 14,456,452) × (105 minutes /60 minutes)) ((0.049 × 14,456,452) × (170 minutes /60 minutes)) = 16,826,105.
43 FinCEN estimated this to be approximately 1 percent of the initial BOI reports in Year 1 estimate.
44 FinCEN estimated this to be approximately 1 percent of the initial BOI reports in Year 2+ estimate.
45 FinCEN estimated updated applications using a methodology that considered the probability of an event resulting in a change to the reported information over a 30-day period. Please see the regulatory impact analysis in the final rule.
46 FinCEN estimated updated applications using a methodology that considered the probability of an event resulting in a change to the reported information over a 30-day period. Please see the regulatory impact analysis in the final rule.
47 325,569 × (20 minutes /60 minutes) = 108,523.
48 49,985 × (20 minutes /60 minutes) = 16,662.
49 12,180 × (10 minutes /60 minutes) = 2,030.
50 26,575 × (10 minutes /60 minutes) = 4,429.
51 Regarding burden hours for BOI reports, companies with simple beneficial ownership structures account for an estimated 31,400,517 burden hours in Year 1 (((0.59 x 32,556,929) x (90 minutes / 60 minutes)) + ((0.59 x 6,578,732 x (40 minutes / 60 minutes))) = 31,400,517. Companies with intermediate beneficial ownership structures account for an estimated 76,633,264 burden hours in Year 1 (((0.361 x 32,556,929) x (370 minutes / 60 minutes)) + ((0.361 x 6,578,732) x (105 minutes / 60 minutes))) = 76,633,264. Companies with complex beneficial ownership structures account for an estimated 18,195,650 burden hours in Year 1 (((0.049 x 32,556,929) x (650 / 60)) + ((0.049 x 6,578,732 x (170 minutes / 60 minutes))) = 18,195,650. 31,400,517 + 76,633,264 + 18,195,650 + 108,523 + 2,030 = 126,339,984.
52 Regarding burden hours for BOI reports, companies with simple beneficial ownership structures account for an estimated 10,109,849 burden hours in Years 2+ (((0.59 x 4,998,468) x (90 minutes / 60 minutes)) + ((0.59 x 14,456,452) x (40 minutes / 60 minutes))) = 10,109,849. Companies with intermediate beneficial ownership structures account for an estimated 20,260,286 burden hours in Years 2+ (((0.361 x 4,998,468) x (370 minutes / 60 minutes)) + ((0.361 x 14,456,452 x (105 / 60))) = 20,260,286. Companies with complex beneficial ownership structures account for an estimated 4,660,391 burden hours in Years 2+ (((0.049 x 4,998,468) x (650 minutes / 60 minutes)) + ((0.049 x 14,456,452) x (170 / 60))) = 4,660,391. 10,109,948 + 20,260,286 + 4,660,391 + 16,662 + 4,429 = 35,051,617.
53 The aggregate costs of BOI reports and individuals obtaining a FinCEN identifier each year are approximate and not precise estimates. Further, any rounding produces no meaningful difference in the magnitude of FinCEN’s estimates or conclusions.
54 To estimate the average wage rate, FinCEN estimated a base wage rate of $39.97 per hour. This updated estimate derives from the BLS May 2021 Wage Estimates and represents the average reported hourly wage rates of three major occupational groups assessed to be most likely responsible for executing filings on behalf of reporting companies: management; business and financial operations; and office and administrative support. See U.S. Bureau of Labor Statistics, National Occupational Employment and Wage Estimates United States (May 2021), available at https://www.bls.gov/oes/current/oes_nat.htm. FinCEN multiplied $39.97 by a private industry benefits factor of 1.42. The ratio between benefits and wages for private industry workers is $11.42 (hourly benefits)/$27.19 (hourly wages) = 0.42, as of March 2022. The benefit factor is 1 plus the benefit/wages ratio, or 1.42. See U.S. Bureau of Labor Statistics, Employer Cost for Employee Compensation: Private industry dataset, March 2022, available at https://www.bls.gov/web/ecec/ecec-private-dataset.xlsx. Therefore, the fully loaded wage rate is $56.76 per hour.
55 (90 minutes/60 minutes) × $56.76 = $85.14, ((370 minutes/60 minutes) × $56.76) + $1,000 =$1,350.00, and ((650 minutes/60 minutes) × $56.76) + $2,000 = $2,614.87.
56 (40 minutes/60 minutes) × $56.76 = $37.84, ((105 minutes/60 minutes) × $56.76) + $200 = $299.33 and ((170 minutes/60 minutes) × $56.76) + $400 = $560.81.
57 ((0.59 × 32,556,929) × $85.14) + ((0.361 × 32,556,929) × $1,350.00) + ((0.049 × 32,556,929) × $2,614.87) = $21,673,487,885.48.
58 ((0.59 × 4,998,468) × $85.14) + ((0.361 × 4,998,468) × $1,350.00) + ((0.049 × 4,998,468) × $2,614.87) = $3,327,532,419.21.
59 ((0.59 × 6,578,732) × $37.84) + ((0.361 × 6,578,732) × $299.33) + ((0.049 × 6,578,732) × $560.81) = $1,038,524,428.72.
60 ((0.59 × 14,456,452) × $37.84) + ((0.361 × 14,456,452) × $299.33) + ((0.049 × 14,456,452) × $560.81) = $2,282,108,290.77.
61 ($56.76 × (20 minutes/60 minutes)) × 325,569 = $6,159,488.81.
62 ($56.76 × (20 minutes/60 minutes)) × 49,985 = $945,666.84.
63 ($56.76 × (10 minutes /60 minutes)) × 12,180 = $115,218.68
64 ($56.76 × (10 minutes/60 minutes)) × 26,575 = $251,386.22.
65 Regarding costs for BOI reports, companies with simple beneficial ownership structures account for an estimated $1,782,211,687.09 in Year 1 ((0.59 × 32,556,929) × 85.14)) + ((0.59 × 6,578,732) × 37.84) = $1,782,211,687.09. Companies with intermediate beneficial ownership structures account for an estimated $16,577,540,630.34 in Year 1 ((0.361 × 32,556,929) × 85.14)) + ((0.361 × 6,578,732) × 37.84) = $16,577,540,630.34. Companies with complex beneficial ownership structures account for an estimated $4,352,259,996.78 in Year 1 ((0.049 × 32,556,929) × 85.14)) + ((0.049 × 6,578,732) × 37.84) = $4,352,259,996.78. ($1,782,211,687.09 + $16,577,540,630.34 + $4,352,259,996.78 + $6,159,488.81 + $115,218.68 = $22,718,287,021.69)
66 Regarding costs for BOI reports, companies with simple beneficial ownership structures account for $573,808,725.53 in estimated costs in Years 2+ ((0.59 x 4,998,468 x $85.14) + (0.59 x 14,456,452 x $37.84)) = $573,808,725.53. Companies with intermediate beneficial ownership structures account for $3,998,123,986.98 in estimated costs in Years 2+ ((0.361 x 4,998,468 x $1,350) + (0.361 x 14,456,452 x $299.33) = $3,998,123,986.98. Companies with complex beneficial ownership structures account for $1,037,707,997.47 in estimated costs in Years 2+ ((0.049 x 4,998,468 x $2614.87) + (0.049 x 14,456,452 x $560.81)) = $1,037,707,997.47. ($574,808,725.53 + $3,998,123,986.98 + $1,037,707,997.47 + $945,666.84 + $251,386.22) = $5,610,837,763.04.
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| File Modified | 0000-00-00 |
| File Created | 0000-00-00 |