The Financial Crimes Enforcement Network is seeking comment on a potential rule on real estate reporting requirements. According to an advance notice of proposed rulemaking issued today, the rule would address real estate purchased without involving loans or other financing by regulated financial institutions.
“When real estate is purchased without such financing, it can be nearly impossible to trace the beneficial owners behind shell companies that are often used to purchase the real estate,” FinCEN said. “As a result, corrupt officials and criminals engaging in illicit activity can exploit the U.S. real estate sector to launder their ill-gotten wealth.”
FinCEN is asking for comment on the approach it should take with respect to the residential and commercial real estate sectors to address the vulnerability of the U.S. real estate market to money laundering and other illicit activity.
FinCEN has not imposed general recordkeeping and reporting requirements authorized under the Bank Secrecy Act on persons involved in all-cash real estate transactions, but it has imposed specific transaction reporting requirements on title insurance companies in the form of geographic targeting orders.