November 29, 2023

Corporate Transparency Act Will Require New Employer Reporting Requirements Beginning January 1st

The Corporate Transparency Act, effective on January 1^st, 2024, mandates that applicable companies, including those in the agricultural sector, annually report “beneficial owners” to the Financial Crimes Enforcement Network (finCEN). Here are a few key considerations for members to keep in mind.

Who Needs to File - “Reporting companies” must identify “beneficial owners” owning at least 25% of the company or exercising “substantial control”. Basic entity information and personally identifiable information (PI) about beneficial owners will be required. Notably for the agriculture industry, exemptions may apply only to entities with over 20 Full-time equivalents (FTEs) exceeding $5 million in gross receipts and possessing a physical U.S. corporate presence.

Filing Process – Beneficial owners can streamline the reporting process by obtaining a FinCEN identifier documents in the U.S. and an online portal for filing with the Financial Crimes Enforcement Network (FinCEN) will be established, although details are yet to be made public. Over 30 million entities are expected to submit information, with an annual projection of 5 million new filings. Entities created on or after January 1^st, 2024, initially had a 30-day filing window, but FinCEN has proposed extending it to 90 days for new entities. Failure to comply may result in civil fines of $500 per day for inaccurate reports.

The Corporate Transparency Act will introduce crucial changes to producers’ businesses and has faced criticism from the National Small Business Association, who filed a lawsuit on November 15^th, 2022. The lawsuit claimed the Corporate Transparency Act is unconstitutional, but the government has opposed the lawsuit with oral arguments in October 2023. Members are urged to assess their status, consider potential exemptions, and ensure compliance with the act’s reporting requirements, commencing on January 1^st, 2024. A proactive approach will help navigate the regulatory landscape and avoid additional fines.

CAFB Submits Comments on DHS Rule Concern H-2 Visa Updates

Just prior to the Thanksgiving holiday, CAFB submitted comments for a Department of Homeland Security notice of proposed rulemaking (NPRM) aimed at “modernizing” the H-2 visa system (H-2A and H-2B). While there were some positive proposals, including promoting portability for H-2 workers, the bulk of the NPRM was largely negative for prospective and current employers. Included in the rule was a provision that would remove the two-week grace period for adopting updated Adverse Effect Wage Rates (AEWRs). Employers are now expected to reflect those changes immediately.

In addition, the DHS will now be placing stricter requirements and penalties on employers for violations around recruitment fees. CAFB argued that while employers conduct their due diligence and research on firms and third-party organizations they might work with when trying to hire H-2 workers, there is little control we can exert on practices happening hundreds or even thousands of miles away. Effectively, the DHS (and in line with recent DOL rulemaking) has effectively implied most H-2 employers are bad faith actors hoping to game the system and force unlawful fees from prospective H-2 workers. While there are certainly violations every year in both segments of the program, statistical analysis has shown that the overwhelming majority of violations are carried out by a small percentage of employers. CAFB will continue to work with other ag groups to try and steer the administration away from some of these harmful ideas.

USDA Announced Opening of Application Period for Regional Agricultural Promotion Program

The U.S. Department of Agriculture (USDA) has officially announced the Notice of Funding opportunity for the inaugural round of funding under the USDA’s Regional Agricultural Promotion Program (RAPP).

This USDA initiative will allocate up to $300 million in the first year to support eligible projects. The primary goal is to assist exporters in breaking into new markets and increasing market share in areas showing substantial growth potential. Funded through the Commodity Credit Corporation, RAPP totals a budget of $1.2 billion available over the next five years.

Secretary Vilsack shared this announcement at the President’s Export Council. The funding from RAPP is designed to provide start-up capital, enabling American exporters to diversify their markets and create new opportunities. The establishment of RAPP follows a bipartisan request from the Senate Committee on Agriculture, Nutrition and Forestry. Vilsack highlighted that region such as South and Southeast Asia, Latin America, the Middle East, and Africa present unique opportunities. The growing middle class in these regions is driving an increased desire for high-quality products. Notably, the first tranche of RAPP excludes top export markets, including China, Canada, Mexico, and the European Union.

Special emphasis will be given to Africa, Latin America/Caribbean and South/Southeast Asia. Out of the total funding available, USDA will specifically set aside $25 million to fund activities in Africa. RAPP awards are expected to cover a five-year performance beginning June 1^st, 2024, and ending September 30^th, 2029. In addition to the RAPP announcement, the USDA has revealed its planned agribusiness trade missions for 2024. These missions will include visits to Seoul, New Delhi, Vancouver, Bogota, Hanoi, Ho Chi Minh City and Casablanca. 

Matthew Viohl

Federal Policy, Director

Erin Huston

Federal Policy, Consultant

Isabella Quinonez

Public Policy Coordinator