The Treasury Department will no longer enforce reporting requirements tied to the 2021 Corporate Transparency Act.
That law aimed to curb money laundering by exposing the owners of anonymous shell companies.
The decision marks a significant shift in U.S. financial oversight policy.
Under the act, most small businesses were required to disclose their beneficial owners to the government.
Officials said the move reduces regulatory burdens on American companies.
The change halts penalties for businesses that fail to file ownership reports.
Critics argue the rollback weakens efforts to combat illicit financial activity.
Supporters contend the previous rules placed excessive compliance costs on small firms.
The announcement follows a broader administration push to cut federal regulations.
Business groups welcomed the decision, citing reduced paperwork and legal risk.
Law enforcement agencies have expressed concerns about losing access to ownership data.
The Treasury’s action leaves the future of corporate transparency rules uncertain.
Companies that already submitted reports face no immediate action under the new policy.
No timeline has been provided for a potential replacement framework.
The policy shift applies to domestic and foreign-owned entities operating in the United States.
Further legal challenges to the act are expected in the coming months.
