Newly finalized Treasury Department regulations take aim at laundering money through cash purchases of residential real estate by requiring investment advisors and real estate professionals to report cash sales to legal entities, trusts and shell companies, the Associated Press reports. The requirements won’t apply to sales to individuals or purchases involving mortgages or other financing. The new rules come as part of a Biden administration effort to combat money laundering and the movement of dirty money through the American financial system. All-cash purchases of residential real estate are considered a high risk for money laundering. The Treasury’s Financial Crimes Enforcement Network, also known as FinCEN, will administer the rules.
Under the new rules, the professionals involved in the sale will be required to report the names of the sellers and individuals benefitting from the transaction. They will also have to include details of the property being sold and payments involved, among other information. Ian Gary, executive director of the FACT Coalition, a nonprofit that promotes corporate transparency, called the rules “much-needed safeguards” in the fight against dirty money in the U.S. “After years of advocacy by lawmakers, anti-money laundering experts and civil society, the era of unmitigated financial secrecy and impunity for financial criminals in the U.S. seems to finally be over,” Gary said. Some industry representatives also welcome the new rules. Tori Syrek, a spokesperson for the National Association of Realtors, said FinCEN’s final rule is a pragmatic approach to combating money laundering and other crimes. “Bad actors are exploiting the current vulnerabilities,” Syrek said. “FinCEN’s final rule is a pragmatic, risk-based approach to combating money laundering and these other crimes.”
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