Reporting requirements are being applied to some metropolitan areas.
To crack down on the use of the U.S. Market by bad actors to launder illicit money, the Biden administration will be expanding reporting requirements for all-cash real property transactions.
Monday’s notice by the Treasury Department sought public comments on a possible regulation that could address what it calls a vulnerability in real estate markets.
Title insurance companies located in 12 metropolitan areas must file reports that identify individuals who purchase residential real estate with shell companies for all cash if the transaction exceeds $300,000.
Himamauli Das (acting director of Treasury’s Financial Crimes Enforcement Network) stated that transparency in the real-estate sector will reduce the ability for corrupt officials and criminals, to launder the proceeds from their ill-gotten gains through U.S. realty markets.
Das stated that the move could “strengthen U.S. security and help protect integrity of U.S. finances.”
Reporting requirements currently apply to the following metropolitan areas: Boston, Chicago, Dallas-Fort Worth, Honolulu and Las Vegas; Los Angeles; Miami (New York City); San Antonio; San Diego; San Francisco; Seattle
The U.S. market for real estate has been long regarded as a safe haven for corrupt officials from around the world and other criminal actors who seek to launder proceeds of criminal activity.
International Consortium of Investigative Journalismists published the “Pandora Papers” to highlight the use of shell companies by former and current world leaders and their close associates to buy real estate and other assets in America and abroad.
According to the leaked documents, King Abdullah II, a Jordanian prime minister, and Tony Blair, a former U.K. prime Minister, used shell companies for mansions, exclusive beachfront properties, and other assets over the past quarter-century.
Tax dodges are legal, but they have led to many proposals to improve tax transparency and strengthen the fight against tax fraud.
As the Biden administration released Monday’s “U.S. Strategy on Countering Corruption”, this is a push to get new regulation of the real estate market.
This strategy was published at the time President Biden is preparing to host the first White House Democracy Summit. It will be a virtual gathering for leaders and civil society experts representing more than 100 countries and will take place on Thursday and Friday.
This strategy provides broad guidelines for fighting corruption at home and abroad. The strategy calls on the U.S. government, to close regulatory gaps and raise anti-corruption efforts in U.S. diplomatic efforts. It also bolsters the protection of civil society, journalists and other media members who expose corruption.