International Law and Immigration
ILS News – November 2024
Message from the Executive Committee Chair
On November 20, 2024, at 9:30 AM (Pacific) ILS will be hosting a webinar with our friends from the Milan Bar Association to discuss how Europe and the United States take action to prevent money laundering.
This year the U.S. Department of Treasury began implementing the Corporate Transparency Act (CTA) that is expected to impact 32.6 million existing small businesses and five million new small businesses each year thereafter.
Many business owners, investors, and advisers are unaware of the CTA, and when they learn about it, are surprised by its scope or even its mere existence. It is not too late to get informed and act, but the deadline is quickly approaching, December 31, 2024.
The CTA was enacted in 2021 to combat illicit activity including tax fraud, money laundering, and financing for terrorism by capturing ownership information for U.S. businesses operating or accessing the U.S. market. According to Congress, it is a widely used tactic for individuals with malicious intent to hide their ownership of U.S. entities and use them to facilitate illegal operations. Operations that negatively impact both national security and economic integrity.
Nonetheless, the CTA and its beneficial owner reporting regime disturbs long-established norms, and it is possible millions of unwitting and innocent U.S. business entities, and their beneficial owners will be caught in a net designed to catch bad actors hiding behind the corporate veil. Some believe Congress has exceeded its powers under the U.S. Constitution. So far one District Court in Alabama agreed. That case is on appeal before the 11th Circuit (National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.). Five other cases are pending.
Except for the excluded entities that generally include heavily regulated business entities or large operating companies most private and nonprofit small businesses will be required to comply. The beneficial owner information (BOI) report is intended to be used by federal, state, local and tribal law enforcement authorities to streamline investigations and pierce through the multiple levels of business entity ownership and affiliation.
Join us for a timely and lively discussion with our friends from Milan and read the article by William Gay below for the information you need to know about the CTA.
Message from the Program Subcommittee Chair
Looking for ways to get involved? We are planning our program calendar for 2025.
As the Program Chair of California Law Association’s (CLA) International Law and Immigration Section (ILS), I am excited to invite you to contribute ideas for webinars and newsletter articles for inclusion in ILS’ 2025 program calendar.
The ILS newsletter and our section’s webinars serve as a vital platform for members to share insights and expertise on pressing issues within the practice of international law and immigration.
Whether you write an article for the ILS newsletter or present a lunch hour webinar, these opportunities offer numerous advantages for members, it not only enhances your professional development and expertise, but fosters a collaborative community to network among members, creating avenues for mentorship and enriching our legal community. Participating in this knowledge-sharing ecosystem helps your fellow members navigate nascent technology, address new legal challenges in the rapidly evolving fields of international law and immigration and provides needed peer feedback that significantly improves the quality of, and respect in, our internationally honored fields.
Please join our platform today to influence policy discussions, raise awareness about significant issues and enhance your role as advocates within the international law and immigration professions. By sharing your diverse perspectives and insights, contributors benefit practitioners and the public alike.
If you have an article or webinar, you would like to propose, please submit your ideas to: ils@calawyers.org
Past Event Recaps
Friendship Agreements signed or renewed in 2024
French-Speaking Order of the Brussels Bar
January 18, 2024
Czech Bar Association
May 17, 2024
European Association of Lawyers and Maria Curie- Skłodowska University
May 21, 2024
Warsaw Bar Association
May 23, 2024
Organization of Commonwealth Caribbean Bar Association
July 6, 2024
Law Society of England and Wales
July 29, 2024
Barra Mexicana de Abogados
August 22, 2024
“Between individuals and nations, respect for the rights of others is peace”
Benito Juárez
Jamaican Bar Association
August 30, 2024
Gift Exchange at Annual CLA Meeting and Leadership Conference
September 6, 2024
International friends from Lahore, Pakistan and Osaka, Japan
We invite you to join the International Law and Immigration Section (ILS) and participate in our future events. Together, we can continue to explore and address the pressing legal issues of our time.
Upcoming Events
Webinars
Co-sponsored with IALA and JABA
After registering, you will receive a confirmation email containing information about joining the webinar.
Conferences
California International Arbitration Week (CIAW)
Organized as a collaboration of the California Lawyers Association (CLA), California Arbitration (CalArb) and leading arbitration institutions and organizations from around the world, California International Arbitration Week (CIAW) is an annual week-long series of in-person and online programs celebrating international arbitration in California.
California Lawyers Association Annual Meeting
International Conferences
Delegation Milan, Italy
Save the Date: October 15 – 18, 2025
Articles
CORPORATE TRANSPARENCY ACT
REQUIRED DISCLOSURE OF INFORMATION REGARDING BENEFICIAL OWNERS TO FinCEN
By William T. Gay
From January 1, 2024, U.S. companies and foreign companies operating in the United States are required to report their beneficial owners and principal officers to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) pursuant to the Corporate Transparency Act (CTA) adopted as part of the 2021 National Defense Authorization Act, unless subject to specific exemptions. The CTA is primarily an anti-money laundering (AML) measure, an area of law enforcement where the US has long been regarded as a laggard among developed countries.
The CTA’s filing requirements apply to both domestic reporting companies and foreign reporting companies.
- Domestic reporting companies are corporations, limited liability companies and any other entity formed and registered to do business in any state or tribal jurisdiction by the filing of a document with the secretary of state or similar official.
- Foreign reporting companies are business entities formed under the law of a foreign country that are registered to do business in any state or tribal jurisdiction by the filing of a document with the secretary of state or similar official.
The CTA provides 23 categories of exemption. The following types of entities are not required to file reports with FinCEN:
| • Large Operating Companies • Securities Reporting Issuers • Governmental Authorities • Banks • Credit Unions • Depository Institution Holding Companies • Money Services Businesses • Brokers and Dealers in Securities • Securities Exchanges and Clearing Agencies • Other Exchange Act Registered Entities • Investment Companies and Investment Advisers • Venture Capital Fund Advisers | • Insurance Companies • State-Licensed Insurance Producers • Commodity Exchange Act Registered Entities • Accounting Firms • Public Utilities • Financial Market Utilities • Pooled Investment Vehicles • Venture Capital Fund Advisers • Entities Assisting a Tax-Exempt Entity • Subsidiaries of Certain Exempt Entities • Inactive Entities |
The definition of reporting companies is not limited to corporations and limited liability companies. Limited partnerships, professional service entities and other entities may qualify as reporting companies and, if so, are required to comply with the CTA’s reporting requirements.
Affected companies are required to file beneficial ownership information reports (BOI Reports) using the BOI E-Filing System at https://boiefiling.fincen.gov/.
Reporting companies must identify beneficial owners in their BOI Reports. “Beneficial owners” are defined as individuals who directly or indirectly (1) exercise substantial control over a reporting company, or (2) own or control at least 25 percent of ownership interests of a reporting company. Ownership interests covered by the CTA may include profits interests, convertible instruments, options and contractual arrangements as well as equity securities. In addition, owners who hold their ownership interests jointly or through a trust, agent or other intermediary are also required to be identified – although minors are generally exempted from reporting obligations.
Senior officers (typically, the president, CEO, CFO, COO and officers who perform similar functions); individuals with the ability to appoint senior officers or a majority of the board of directors or a similar body; and anyone else who directs, determines or has substantial input to other important decisions of a reporting company also need to be identified in BOI Reports as individuals exercising substantial control over reporting companies.
Reporting companies created on or after January 1, 2024, also must identify “company applicants” in their BOI Reports. Company applicants are the individuals who filed the documents creating the reporting company and individuals primarily responsible for directing or controlling the filing of documents creating a reporting company.
BOI Reports must contain the following information regarding the reporting company:
- Legal name
- Any trade name or d/b/a name
- Address of the company’s principal place of business in the United States
- Jurisdiction of formation
- Taxpayer Identification Number.
BOI Reports must contain the following information regarding each beneficial owner and company applicant:
- Full legal name
- Date of birth
- Current address
- Copy of a passport, driver’s license or other identification document.
Every person who files a BOI Report must certify that the information contained is true, correct and complete.
Information contained in BOI Reports will not be available to the public. However, FinCEN is authorized to disclose such information to:
- U.S. federal agencies engaged in national security, intelligence or law enforcement activity
- With court approval, to certain other state or local law enforcement agencies
- Non-U.S. law enforcement agencies at the request of a U.S. federal law enforcement agency, prosecutor or judge
- With the consent of the reporting company, financial institutions and their regulators
- Federal regulators in assessing financial institutions’ compliance with customer due diligence requirements
- The U.S. Department of the Treasury for purposes including tax administration.
No fee is required in connection with filing of BOI Reports.
U.S. and foreign reporting companies that were formed or registered to do business in the United States prior to January 1, 2024, must file their initial BOI Reports no later than January 1, 2025. U.S. and foreign reporting companies formed on or after January 1, 2024, must file their initial BOI Reports within 90 days of receipt of notice of formation.
Reporting companies are required to file updated reports with FinCEN within 30 days of occurrence of a change in any of the information contained in their BOI Reports.
Inaccuracies in BOI Reports must be corrected within 30 days of the date a reporting company becomes aware of or had reason to know of such inaccuracy. FinCEN has indicated that there will be no penalties for filing inaccurate BOI Reports if such reports are corrected within 90 days of their filing.
The willful failure to report the information required by the CTA or filing fraudulent information under the CTA may result in civil or criminal penalties, including penalties of up to $500 per day as long as a violation continues, imprisonment for up to two years and a fine of up to $10,000. Senior officers of an entity that fails to file a required report may be held accountable for such failure.
Mr. Gay has more than 30 years of experience as a business/corporate lawyer, culminating in his present transaction-focused practice, which includes corporate law, entity formation, mergers and acquisitions, corporate finance, licensing agreements and technology transfers. Bill has extensive experience working with domestic and foreign clients in securities, real estate, intellectual property and franchising. Among his many domestic and international clients are Japanese entities that operate in the United States.