New Draft Rules to Crack Down on Money Laundering in U.S. Real Estate and Investment Markets: A Major Step Forward

The Financial Accountability and Corporate Transparency (FACT) Coalition has submitted public comments in support of proposed rules by the Treasury that aim to crack down on money laundering in the U.S. real estate and private investment markets. These rules, if implemented, would mark a generational progress in combating illicit finance and corruption in the country.

For decades, the U.S. real estate and investment fund sectors have been excluded from anti-money laundering requirements, leaving them vulnerable to criminals looking to launder their dirty money. The proposed rules would close these loopholes and bring these sectors in line with the regulations that other financial institutions are subject to under the Bank Secrecy Act.

Ian Gary, executive director of the FACT Coalition, praised the Treasury for taking a historic step towards cutting off avenues for money laundering in the U.S. He emphasized the importance of releasing strong final rules that align with recommendations from anti-money laundering experts and civil society.

The proposed rules have received broad support from various stakeholders, including U.S. senators, affordable housing groups, national security experts, and anti-corruption organizations. While the comments in support were mostly positive, there were recommendations to strengthen the proposals further, such as extending the safeguards to commercial real estate purchases.

The FACT Coalition recommended clarifying appropriate penalties for entities that fail to accurately file required information, and urged the inclusion of family offices in the definition of entities required to establish anti-money laundering programs in the private investment sector. These recommendations aim to ensure the efficacy of the rules and close remaining loopholes in the U.S. financial system.

Overall, the proposed rules represent a significant step towards shedding the U.S.’s status as a hub for financial secrecy and illicit finance. By finalizing these rules and addressing remaining loopholes, Treasury is moving closer to creating a more transparent and secure financial system in the country.