The Financial Crimes Enforcement Network filed its appeal to a ruling issued by Texas District Judge Jeremy Kernodle in the Samantha Smith v. FinCEN case that still blocks the implementation of the Corporate Transparency Act.
The Supreme Court ruled in favor of the Treasury Department last month in the Texas Top Cop case challenging the law, but the Smith case injunction came out in the interim and put another injunction in place. Given the current chaos in the Department of Justice, I was skeptical that the Smith Appeal would be filed. The DOJ managed to just beat the deadline. The DOJ filed the notice of appeal on February 5.
The DOJ also filed a motion for stay pending the appeal. You would think the stay in the Smith case would likely be granted since the US Supreme Court already did the exact same thing in the Texas Top Cop Shop case. All the facts and reasoning are the same.
From the compliance perspective, FinCEN in its motion stated that it would give a 30-day period to meet the compliance deadline for filers. Now it’s just a matter of how long it takes Judge Kernodle to rule on the motion. (Obviously, there is small chance that he doesn’t lift the injunction.) If you give it a few days, it seems likely that the new Beneficial Ownership Information reporting compliance deadline will be around the Ides or March.
Sources:
- Risk & Compliance Newsletter By Richard Vanderford from the Wall Street Journal
- Docket for Smith et al v. United States Department of The Treasury et al