New U.S. Defence Act with ramifications to AML provisions and whistleblower program
On Friday 11 December 2020, the U.S. Congress has approved the USD 740 billion “National Defense Authorization Act for Fiscal Year 2021” (H.R.6395, hereinafter “2021 NDAA”). In addition to provisions on defence tasks, the 2021 NDAA contains several anti-money laundering provisions and a significant expansion of beneficial ownership disclosure requirements for U.S. companies and non-U.S. companies.
Thus, Section 6403 of the 2021 NDAA requires U.S. corporations, limited liability companies, other similar entities, as well as non-U.S. companies registered to do business in the United States to identify who owns and controls them (i.e. to determine their beneficial ownership) and to file annual reports with the Financial Crimes Enforcement Network (FinCEN) at the U.S. Treasury Department. Furthermore, the 2021 NDAA also includes several provisions that create a new Bank Secrecy Act (BSA) whistleblower program at the U.S. Treasury.
Reporting companies that have not previously been subject to beneficial ownership disclosure requirements should carefully review the requirements of the 2021 NDAA, as well as the numerous exceptions, to determine whether they may or may not have a disclosure obligation following an Analysis by the Program on Corporate Compliance and Enforcement of the NYU School of Law.