The U.S. Supreme Court has lifted an emergency stay that had previously blocked the Corporate Transparency Act (CTA), a law requiring businesses to disclose ownership details. The decision overturns an injunction issued by a federal judge, allowing the CTA to move forward. Justice Ketanji Brown Jackson was the sole dissenter in the ruling. This decision came after a request from the U.S. Department of Justice for the Court’s intervention, and it arrived shortly after a new administration took office.

The CTA, enacted in early 2021 as part of the annual defense bill, mandates that business owners—especially those of small businesses—submit sensitive personal information, including birth dates and addresses, to the Financial Crimes Enforcement Network (FinCEN). The purpose of this requirement is to combat financial crimes by enhancing transparency and making it more difficult for illicit actors to hide their ownership structures.

The legal battle surrounding the CTA has garnered significant attention from both business groups and regulatory reform advocates, many of whom have opposed the law’s implementation. These groups have called for delays in its enforcement, arguing that the law imposes burdens on small businesses and raises privacy concerns. However, with the Supreme Court’s decision to lift the stay, the Justice Department now has the opportunity to move forward with enforcing the disclosure requirements.

The case is expected to continue through the legal system, as it is being sent back to the 5th U.S. Circuit Court of Appeals. There, the Justice Department will continue to argue that the CTA is a valid exercise of Congress’s authority over interstate commerce. The Department contends that the law is essential to fighting financial crimes such as money laundering, tax evasion, and other illicit financial activities.

In her dissenting opinion, Justice Jackson argued that the government had not demonstrated sufficient urgency to justify the Court’s intervention at this time. She pointed out that the law’s enforcement had already been delayed for nearly four years and questioned whether a further delay would have significant consequences. Jackson expressed concern that the government’s claims of urgency were overstated, especially since the law’s provisions had not been actively enforced during the extended delay.

On the other hand, the Justice Department maintained that any further postponement would undermine ongoing efforts to combat financial crimes and protect national security. Former Solicitor General Elizabeth Prelogar, who represented the government in the case, emphasized that delaying enforcement of the CTA would disrupt anti-money laundering efforts, both within the U.S. and internationally. The government has argued that the law is crucial for strengthening transparency in business ownership, which is necessary for identifying criminal activities that often involve shell companies and opaque financial arrangements.

While the Supreme Court’s ruling allows the CTA to be enforced, the case will likely continue to evolve. In addition to lifting the stay, the Court also declined to address a broader constitutional question about the authority of federal judges to issue nationwide injunctions that block laws across the entire country. Justice Neil Gorsuch expressed interest in taking up this issue in the future, suggesting that it has become a common tool in legal challenges to federal laws. He noted that nationwide injunctions, which have become increasingly prevalent, raise important questions about the scope of judicial authority.

As the legal process continues, the impact of the Supreme Court’s decision on the CTA remains to be fully seen. The ruling allows the implementation of the law to proceed, but it also sets the stage for further challenges and legal proceedings. Many businesses and organizations will be closely watching the next steps in the case, as the outcome could have significant implications for the balance between privacy, regulatory oversight, and the government’s ability to combat financial crimes.