Pursuant to the Bank Secrecy Act of the United States of America ("U.S.") and the regulations issued by the Financial Crimes Enforcement Network ("FinCEN"), a division of the U.S. Department of the Treasury responsible for combating money laundering, individuals and legal entities resident or domiciled in the U.S. ("U.S. Persons") that hold, directly or indirectly, a financial interest (financial interest) or signature authority (signature authority) over one or more bank accounts or financial investments located outside the U.S., the aggregate value of which exceeded US$ 10,000.00 (ten thousand U.S. dollars) during calendar year 2024, are required to file with the U.S. Department of the Treasury the Report of Foreign Bank and Financial Accounts ("FBAR").
As has been the case in recent years, the original April filing deadline was automatically extended by six months, making the final deadline October 15, 2025.
The declaration must be filed exclusively in electronic form through the FinCEN BSA E-filing system.
It is important to note that a U.S. Person is required to file the FBAR provided that, at any point during 2024, it held, directly or indirectly, a financial interest or signature authority over one or more bank accounts or financial investments located outside the U.S., with a total value exceeding US$ 10,000.00 (ten thousand U.S. dollars).
The FBAR filing obligation extends to any type of entity incorporated in the U.S., including all Limited Liability Companies ("LLCs"), even if they are treated as disregarded entities (single-member LLCs) for U.S. tax purposes.
The FBAR obligation also covers bank accounts or financial investments located outside the U.S. held by entities (including non-U.S. entities) in which a U.S. Person owns more than 50% of the share capital (or, in certain cases, of the voting shares or profit entitlements). Also covered by this obligation are accounts located outside the U.S. held by a trust of which a U.S. Person is a beneficiary entitled to more than 50% of its assets or income.
The concept of bank accounts and financial investments includes: (i) bank accounts of any nature; (ii) securities accounts (securities accounts) or commodity futures and options accounts (commodity futures and options accounts); and (iii) financial investments and accounts in general, including certain investment funds and insurance policies.
It should be noted that, in order to file the declaration, a legal entity filer must hold a tax identification number (Employer Identification Number – EIN). If the filer does not hold such a number, it must apply for one in advance to enable the filing of the declaration, or contact us to discuss possible alternatives.
Penalties for failure to file or for incorrect reporting may reach up to US$ 165,353.00 per unreported account or 50% of account balances (whichever is greater), without prejudice to potential criminal consequences.
Finally, it is worth noting that, since the enactment of the FATCA (Foreign Account Tax Compliance Act), the U.S. Department of the Treasury has had access to an important information cross-referencing mechanism for identifying bank accounts and financial investments held with foreign financial institutions, given that such institutions are required to report them to the U.S. authorities. Accordingly, the likelihood of identifying U.S. Persons that may fail to comply with this regulatory obligation has increased.
