By now all should know that CTA is shorthand for a program requiring a federal filing of ownership and control for businesses in the United States which are below a size threshold. No doubt many readers here have control or ownership of one or more such entities and many I presume have completed and paid for their filings, or incurred expense in preparation of such filings.
The purpose of CTA was to find out the names of money launderers and scam artists by making them reveal themselves.
On March 21 the US government issued a release exempting from the program requirements all companies formed under the laws of the United States, even if owned overseas. BELOW ARE PERSONAL OBSERVATIONS, neither legal advice (which is never given in my posts) nor reflecting whether the March 21 action of the government was legally taken. (There is substantial sentiment that the March 212 announcement is contrary to the statute.)
The original statutory scheme, reduced to brass tacks, was this: if you are a crook please register and tell us who you are. You don’t have to say you are a crook, of course; just register and leave the accusation to us. We want to be able to find you crooks and assess further liability upon you. So, it required people who are crooks to register. It might take a particularly stupid crook, with the nerve to steal and swindle, to actually make a filing but we need not address that anomaly here.
The March 21 policy announcement stated that if you were a crook but were acting through an entity that you formed in the US then you still did not have to register, because you set up an entity here. The result is that even you are a foreign crook and were dumb enough to reveal yourself under the original interpretation of the law, all you now need to do (in order to not violate CTA) is spend a couple of grand to set up a simple entity in the US and then you need not undertake the dumb step of opening yourself up to greater peril by failing to file.
It is not clear to this reader that the new interpretations of the law, exempting businesses from filings just because the crook set up a US front, is consistent with the law as enacted by Congress; the new March 21 announcement is functional guidance today but who can say for the long run.
However, one thing IS clear: the statute, as originally embodied in the filing scheme, did address one major issue: foreign crooks defrauding people in the US by setting up a US front had to make some filing in the US if they set up an entity here. As flawed as the original statute may have been, the current interpretation makes the statute 100% irrelevant to foreign crooks–you may be a crook but there is no greater risk if you set up a US front. Even though recent public reportage revealed sophisticated foreign operations at work all over the world, including in the US.