Whitehouse Cheers 11th Circuit Court of Appeals Ruling Upholding Constitutionality of Corporate Transparency Act

Whitehouse, colleagues filed amicus brief urging court to affirm the years-long lawmaking process of the Corporate Transparency Act as a legitimate exercise of congressional authorities

Washington, DC - U.S. Senator Sheldon Whitehouse (D-RI) cheered a decision by a panel of judges of the U.S. Court of Appeals for the 11th Circuit reversing a lower court decision and affirming the constitutionality of the Corporate Transparency Act, the 2021 law that is considered the most important anti-money laundering law passed in two decades.

"We fought for years to pass the bipartisan Corporate Transparency Act to give law enforcement key information about the drug traffickers, kleptocrats, and money launderers hiding their corruption and criminality behind webs of shell companies in the United States. The 11th Circuit's unanimous decision affirms the CTA was a rational exercise of Congressional authorities, supported by extensive factfinding and a robust legislative record," said Whitehouse. "The Trump administration should heed the call of this court and Congress and give law enforcement and national security officials access to the information they need to crack down on the financing of criminals, terrorists, and foreign adversaries."

The CTA has an important role to play in protecting national security and public safety by providing law enforcement and national security officials with the names of the true owners ("beneficial ownership information") of U.S. corporations and other legal entities. This information facilitates the government's efforts to combat terrorist financing, money laundering, sanctions evasion, proliferation financing, tax evasion, and other illicit finance carried out through shell companies.

In March, the Treasury Department announced that it would not enforce the CTA's beneficial ownership information reporting rule when it comes to U.S. citizens or domestic reporting companies, and subsequently issued an interim final rule that eliminates reporting requirements for more than 99 percent of corporations and LLCs that were previously required to report, as directed by Congress.

Whitehouse and Senators Ron Wyden (D-OR), Elizabeth Warren (D-MA), and Jack Reed (D-RI), and Representative Maxine Waters (D-CA) first filed an amicus brief defending the CTA in April 2024 in National Small Business United v. Treasury, the case at the 11th Circuit Court of Appeals. Whitehouse and the members also filed briefs in Texas Top Cop Shop v. Bondi, a case at the U.S. Court of Appeals for the 5th Circuit, and Community Associations Institute v. Treasury, a case at the U.S. Court of Appeals for the 4th Circuit. In January 2025, the members filed a similar amicus brief in Firestone v. Yellen, a case at the U.S. Court of Appeals for the 9th Circuit.

"Anonymous shell corporations harm the United States' national security, foreign affairs, foreign and interstate commerce, and tax interests. Such shell companies often operate in multiple layers to hide their true owners and violations of key sanctions, money-laundering, and tax laws. Allowing illicit money to be hidden through corporate forms also undermines public safety and law enforcement efficacy on a national and international scale," wrote Whitehouse and the members in their amicus briefs.

Whitehouse's amicus brief argued that Congress has robust Article I powers to legislate in the national security and foreign affairs, interstate and foreign commerce, and tax arenas and that the CTA falls comfortably within those authorities. In enacting the CTA, Congress carefully considered testimony, reports, and interests of various stakeholders, and held numerous hearings across various committees and subcommittees over two decades. Based on this extensive record, Congress concluded that beneficial ownership information is necessary to enforce the law against threat actors who use shell companies to exploit the American financial system and launder their ill-gotten gains.

Whitehouse was the original sponsor of the TITLE Act, the precursor to the Corporate Transparency Act, alongside Senator Chuck Grassley (R-IA). Whitehouse was an original Senate sponsor of the CTA alongside former Senator Marco Rubio (R-FL) and Senator Ron Wyden (D-OR).

The CTA was the culmination of more than a decade of painstaking bipartisan congressional deliberation. The CTA passed as part of the FY2021 National Defense Authorization Act and was supported by a wide range of stakeholders, including national security experts, law enforcement, anti-corruption groups, human rights organizations, faith communities, financial institutions, real estate organizations, the U.S. Chamber of Commerce, labor unions, and the Trump Administration.