Corporate Transparency Act for art businesses

January 16, 2025

At some point in the near future, U.S. companies will be required to file initial beneficial ownership reports with FinCEN (Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury).

Deadline

While the original deadline to file was January 1, 2025, this has been delayed. Although a new date of January 1st, 2026, was put in place in December 2024, the picture is not currently clear. It’s possible that a change could be made with short notice of filing required.

There are several sites that are keeping posts updated:

U.S. Chamber of Commerce
American Bar Association

Concerns about privacy

FinCEN states with regard to access to the beneficial ownership register:

“The CTA establishes that BOI is confidential and may not be disclosed except as authorized under the CTA and the Access Rule. FinCEN is authorized to disclose BOI under specific circumstances to six categories of recipients: (1) U.S. Federal agencies engaged in national security, intelligence, or law enforcement activity; (2) U.S. State, local, and Tribal law enforcement agencies; (3) foreign law enforcement agencies, judges, prosecutors, central authorities, and competent authorities (foreign requesters); (4) financial institutions using BOI to facilitate compliance with customer due diligence (CDD) requirements under applicable law; (5) Federal functional regulators and other appropriate regulatory agencies acting in a supervisory capacity assessing financial institutions for compliance with CDD requirements under applicable law; and (6) Treasury officers and employees.”

See FinCEN’s Fact Sheet on Beneficial Ownership access.

The Corporate Transparency Act and AML compliance

This incoming requirement for U.S. companies to file ownership information has been widely viewed as an AML compliance effort. Lacking information on beneficial ownership – as is the presently the situation in the U.S., is established as a key factor in the enablement of economic crime. This was evidenced in the Panama Papers and Paradise Papers, the former of which resulted in the art market being brought into scope of AML legislation in the EU and UK art markets in 2020.

In Conclusion

We understand that it will still be some time before the U.S. implements AML compliance specific to the sector. In the meantime, financial sanctions (notably including the Luxury Goods Ban for the art market) and the Corporate Transparency Act – when implemented, will be in effect.