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The Treasury Department recently released the “2020 National Strategy for Combating Terrorist and Other Illicit Financing,” which looks strategically at how the U.S. can effectively work to combat money laundering and terrorist financing. The Strategy highlights key threats and vulnerabilities in the anti-money laundering (AML) space, while also establishing priorities of increasing transparency and closing reporting gaps; improving the effectiveness of the regulatory framework for financial institutions; and, enhancing the current AML legal framework.
The Treasury Department is focused on implementing these priorities by: (1) supporting the required collection of beneficial ownership information by the government at the time companies are formed, and (2) working to minimize the risks of laundering illicit proceeds through real estate transactions. The report also discusses vulnerabilities within the real estate industry, including limited reporting obligations under the Bank Secrecy Act for real estate professionals; the formation of anonymous shell companies to launder money; issues presented in non-financed, all-cash real estate transactions; and challenges with respect to foreign buyers. The report also discusses the effectiveness of the GTOs, including loopholes and evasion that occurs under the current GTO framework, and supports implementation of a permanent solution. Treasury also conducted an assessment of federal criminal cases involving real properties that were forfeited by the Department of Justice between 2014 and 2017, and found that “real estate professionals, such as mortgage brokers and real estate agents were the most common complicit professionals identified in the overall dataset, followed by lawyers.”
The Treasury Department remains concerned about anonymity in real estate purchases, specifically through shell companies, and is working with Congress to address these issues. NAR will continue to provide helpful resources to members to aid in the fight against money laundering and terrorist financing. Stay tuned to https://www.nar.realtor/money-laundering-and-terrorism-financing for the latest updates.