b'FOCUSEmployment Law UpdateEnforcement of the Corporate Transparency By Karen A. Tobin Act Suspended by Federal Courts Preliminary Partner, Amundsen Davis InjunctionOn December 3, 2024, in the case ofconstitutional. The court ruled that Texas Top Cop Shop v. Garland, thethe plaintiffs in this case demonstrat-U.S. District Court of Texas issued aed a substantial likelihood of success nationwide preliminary injunctionon the merits of their challenge to of the Corporate Transparency Actthe CTAs constitutionality and met (CTA), which prevents the enforce- their burden of proof. The plaintiffs ment of the CTA at this time. In anhad requested relief only for them-effort to combat money laundering,selves, which included approximately terrorism financing, and corruption,300,000 trade association members. the CTA was enacted to requireThe defendants argued that it would In an effort tocompanies to file beneficial owner- result in a nationwide injunction as ship reports with the United Stateda practical matter. The court noted combat moneyFinancial Crimes Enforcementthis practical effect and issued the Network (FINCEN) unless a com- nationwide injunction.laundering, terrorismpany falls within one of the CTAs 23While we understand that, in financing, andexemptions. light of this new ruling, clients may What Does This Mean forelect to pause reporting to FIN-corruption, theCompanies That Have Not YetCEN, we recommend that clients not abandon preparations for their CTA was enacted toComplied With the Reportingeventual compliance with the CTA. Deadline? If the injunction is stayed or limited, require companiesThe ruling of the preliminary injunc- clients should ensure that they are in to file beneficialtion is ONLY preliminary and thea position to promptly complete their U.S. Department of Justice is likelyrequired filings.ownership reports . to quickly appeal and potentially re-quest the court to stay the injunction. The court did not rule on whetherDecember 5, 2024 the CTA was constitutional, only that the act should not be enforced until the court is able to decide on the issue of whether the CTA is outside of Congress power and therefore un-6ILLINOIS BUSINESS LEADER'