NPMA has partnered with National Federation of Independent Business (NFIB) and many other organizations in a coalition to oppose S. 2563, the Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings Act, known as The ILLICIT CASH Act. The bill allegedly focuses on catching enterprises but will actually have a chilling effect on many small businesses in the pest management industry and across the economy.
The bill takes a laudable goal (rooting out criminal enterprises) and “fixes” it by placing a huge burden on very small businesses. It would require every business with 20 employees or less to file paperwork with the Financial Crimes Enforcement Network (FinCEN) that would include personally identifying information for every single person who is considered a “beneficial owner.” “Beneficial owner” is ill-defined, but as written it is simply anyone who “receives substantial economic benefits from the assets of” the business.
This paperwork would be due upon incorporation if a new business or if the business is existing, once the law is finalized. All businesses with 20 or less employees would have to file updated reports within 90 days of any ownership changes, and file additional updated reports within a year of any ownership information changes, such as an expiration of a driver’s license number or a change in address. Failure to comply with these reporting requirements would be a federal crime with civil penalties of $500 per day up to $10,000, criminal penalties of up to 4 years in prison, or both. FinCEN is very small and would have no compliance help for small businesses. This information would be listed in FinCEN and would be available to tribal, local, state and federal law enforcement without a warrant or subpoena, and foreign law enforcement entities would only have to ask someone in the US with access to view the information. NPMA and others are fighting back because this is poorly constructed bill that doesn’t actually fix the problem; criminal enterprises will simply not file paperwork.
This is a massive grab of personal information under the guise of national security and would place the onus of compliance on the smallest of small businesses. Our industry would be affected. While it is only focused on small businesses now, this law opens the door to go after medium or large businesses in the future. Even as written, the law is so broad it would bring in churches and other houses of worship; a government study estimated it would affect between 20 to 25 million businesses. NPMA will be on the Hill opposing this bill over the next few weeks.