Key facts
- The lawsuit argues the Trump administration effectively gutted the 2021 law by exempting over 99.9% of companies.
- New York Attorney General Letitia James stated the rule allows owners of shell companies to remain anonymous.
- US Senator Elizabeth Warren warned the rollback increases risks of sanctions evasion, fraud, and trafficking.
Twenty-one US states and the District of Columbia sued the Trump administration on Tuesday over its rollback of reporting requirements established under the 2021 Corporate Transparency Act. The lawsuit, filed in the US District Court for the District of Oregon, asks a federal court to overturn a rule finalized in August that exempted most companies from disclosing beneficial ownership information to the Treasury Department's Financial Crimes Enforcement Network. The states argue the administration effectively gutted the law, allowing owners of shell companies to remain anonymous and increasing risks of illicit finance. US Treasury Secretary Scott Bessent had previously stated the rule eliminated a burdensome requirement without compromising national security.