U.S. Department of Treasury Said They Will No Longer Enforce Anti-Money Laundering Law

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The U.S. Treasury Department has announced it will no longer enforce penalties under the Biden-era Corporate Transparency Act, a key anti-money laundering measure requiring businesses to disclose their beneficial owners. The decision follows legal challenges and concerns that the law placed an unnecessary burden on American small businesses and taxpayers.

Instead of targeting U.S. companies, the Treasury will now focus on foreign reporting entities, narrowing the scope of enforcement. The move aligns with the Trump administration’s broader push to roll back regulations that are seen as restrictive to economic growth. But while supporters welcome the relief for businesses, critics argue that this rollback could weaken efforts to prevent financial crimes.

What the Corporate Transparency Act Required

The Corporate Transparency Act, signed into law in 2021, was designed to combat illicit financial activities by making it harder for criminals to hide behind anonymous shell companies. Under the law, millions of U.S. businesses were required to disclose the identities of their real owners to the Financial Crimes Enforcement Network (FinCEN), a Treasury agency responsible for anti-money laundering oversight. The intent was to prevent money laundering, fraud, and terrorist financing by increasing corporate transparency. Law enforcement officials have long warned that criminals exploit U.S. business structures to move and conceal illicit funds. However, the law faced significant pushback from business owners and conservative policymakers who viewed it as an overreach.

Why Did the Treasury Drop Enforcement?

The decision not to enforce penalties under the Corporate Transparency Act reflects ongoing concerns about regulatory burdens on businesses. Treasury Secretary Scott Bessent stated that the move supports “hard-working American taxpayers and small businesses” while still allowing for targeted enforcement against foreign entities.

From the Trump administration’s perspective, the law was flawed because it imposed compliance costs on low-risk businesses. Many argued that law-abiding small companies don’t need to disclose personal ownership details when criminal networks primarily operate through foreign entities. Legal challenges to the act also played a role, as courts have questioned whether it oversteps federal authority.

By limiting enforcement to foreign reporting companies, the Treasury aims to balance financial transparency with economic freedom. However, opponents worry that rolling back these anti-money laundering measures could create loopholes for illicit actors.

The Debate Over Anti-Money Laundering Efforts

Supporters of the law argue that business transparency is essential for preventing financial crimes. The U.S. has long been criticized for being one of the easiest places in the world to set up anonymous shell companies, making it a haven for money launderers. The Corporate Transparency Act was meant to change that.

With enforcement now suspended for domestic companies, some experts fear that criminals could exploit legal loopholes, making it harder for regulators to track illicit activities. They warn that weakening anti-money laundering laws could invite more foreign corruption into the U.S. financial system.

On the other side, business groups and conservative policymakers celebrate the Treasury’s decision as a victory for economic freedom. They argue that the government should not be collecting vast amounts of personal ownership data from law-abiding companies. Instead, they support targeting enforcement at known bad actors—particularly foreign entities with questionable financial ties.

Political and Economic Implications

Trump has praised the Treasury’s decision, calling the reporting requirement “outrageous and invasive.” His administration has made deregulation a cornerstone of its economic strategy, and the rollback of anti-money laundering penalties aligns with broader efforts to reduce federal oversight on businesses.

The policy shift also fits within a larger realignment of U.S. financial regulations. The administration has pushed for tariff adjustments, tax cuts, and spending reductions to stimulate the economy. Eliminating penalties under the Corporate Transparency Act is part of this deregulatory wave.

However, the decision could spark friction with international financial regulators. The U.S. has long worked with global partners to combat money laundering and illicit finance. By scaling back enforcement, Washington may face criticism from allies who view transparency laws as critical to financial security.

What Comes Next for Anti-Money Laundering Regulations?

With penalties suspended, the Treasury Department has signaled that it will issue a new rule to clarify enforcement going forward. The likely outcome is a narrower focus on foreign reporting companies, while domestic businesses will no longer be subject to the same scrutiny.

For American business owners, this is a clear win. Companies that previously faced compliance costs and bureaucratic red tape will now operate without the threat of penalties. However, financial watchdogs will monitor whether the decision creates unintended vulnerabilities in the fight against financial crime.

The long-term impact of this shift remains uncertain. If financial abuses increase, future administrations may revisit or reinstate stricter anti-money laundering measures. For now, the rollback represents another significant shift in financial policy under the Trump administration.

Do you support the Treasury’s decision to suspend anti-money laundering penalties for U.S. businesses? Tell us what you think!

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