Earlier this month, both houses of Congress passed the 2021 National Defense Authorization Act (“2021 NDAA”). Included in Title LXIV of the 2021 NDAA (Title 64 for those of us rusty on Roman numerals), are new information reporting requirements intended to identify individual beneficial owners of certain business entities. Subject to a number of exceptions, the bill requires certain U.S. and foreign entities to file annual reports with the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) that will disclose information regarding the beneficial owners of reporting companies. Overall, the reporting will identify those individuals exercising “control,” as the term is defined, over those entities required to report. According to the legislation, over two million corporations, LLCs, and similar entities are formed under state law in the United States each year, and many “malign actors seek to conceal their ownership” of various entities intended to facilitate illegal activity. Accordingly, the reporting mandated by the legislation is intended to help protect national security interests and interstate and foreign commerce, as well as counter the financing of terrorism.
The legislation passed both chambers by overwhelming majorities − 335-78 in the House and 84-13 in the Senate. Notwithstanding the significant Congressional support, President Trump has not yet signed the bill into law and has suggested that he may veto the bill (H.R. 6395). The legislation will become law tomorrow (December 24, 2020) if the President does not veto the bill. Even if the President vetoes the bill, it appears likely that Congress will override it by reconvening after Christmas and before the new year. H.Res. 1271 (the rule providing for the consideration of the Senate amendment to H.R. 133 (the end-of-year package that includes COVID relief)) provided that if a veto message is laid before the House on the 2021 NDAA, the veto message and the bill shall be postponed until the legislative day of Monday, December 28, 2020. Accordingly, if Trump vetoes the bill, the House will vote on its override on December 28.
UPDATE: President Trump vetoed the bill on December 23, 2020.
UPDATE: The House of Representatives voted to override President Trump’s veto on December 28, 2020. Additional coverage is available here.
UPDATE: The Senate voted to override President Trump’s veto on January 1, 2021. Additional coverage is available here.