The 5th U.S. Circuit Court of Appeals Monday reinstated the Corporate Transparency Act, overruling a Texas judge who had issued a nationwide injunction barring the Treasury Department from enforcing the reporting law.

A three-judge panel said the act was likely within Congress’ power to regulate commerce. The ruling reimposed the Jan. 1 deadline for an estimated 32.6 million small businesses to submit reports to the Financial Crimes Enforcement Network.

U.S. District Judge Amos Mazzant in East Texas put the law on hold with a ruling Dec. 3 that was cheered by farm groups such as the American Farm Bureau, the National Cattlemen’s Beef Association and R-CALF.

Mazzant ruled the law likely exceeded Congress’ constitutional authority to regulate commerce, foreign affairs or tax collections.

Fifth Circuit Judges Carl Stewart, Catharina Haynes and Stephen Higginson disagreed. The judges ruled the public has an urgent interest in the law’s intent to combat financial crimes and promote national security.

The law requires small businesses to submit photos and personal information of owners and others with substantial control over the business. The information will be available to U.S. and foreign law enforcement agencies investigating shell companies.

The law has drawn numerous lawsuits around the country. The law’s opponents claim it violates civil liberties and constitutes an illegal power grab by Congress.

Federal judges in Oregon and Virginia have upheld the law. In preliminary rulings, Mazzant and an Alabama judge ruled it was likely unconstitutional. Mazzant went a step further and issued a nationwide injunction.

The circuit court’s three judges said the government has made a strong showing it will eventually prevail. Congress has broad powers to regulate commerce, they noted.

The judges said Mazzant’s “last-minute” preliminary injunction undermines a push by the U.S. for other countries to adopt anti-money laundering and counterterrorism laws.

U.S. attorneys said Mazzant’s order threatened to stall a campaign to gain compliance with the law. The Treasury Department reported in mid-December that about 10 million businesses had filed reports.

Businesses that do not file reports could be fined $50 per day, up to $10,000, according to the law. 

Attorneys general from 25 states Friday asked the 5th Circuit to uphold Mazzant’s nationwide injunction. The states argued the law was an unconstitutional use of federal power at the expense of state power.