NEW YORK (Reuters) – A long-awaited U.S. rule aimed at curbing money laundering in the real estate industry has reached key White House offices for review, but there are final hurdles to clear before it is formally proposed next year. This has become a hurdle.
The rule was submitted by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and delivered to the Office of Information and Regulatory Affairs on Monday, according to government records. After review by the agency, the rule is scheduled to open for a two-month public comment period beginning in February 2024, records show.
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The rule is expected to require real estate professionals to report the identities of the beneficiaries of companies that buy real estate for cash, and anti-corruption activists say criminals can anonymously share their ill-gotten gains with the United States. This will eliminate loopholes that have allowed people to hide their money in real estate.
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The Treasury Department announced earlier this month that FinCEN would propose the rules in early 2024.
Banks have long been required to understand the sources of their customers’ funds and report suspicious transactions, but no such rules exist nationally in the real estate industry.
FinCEN has operated real estate purchase disclosure rules in some cities, including New York and Miami, since 2016, but experts say they are easy to circumvent.
(Reporting by Luc Cohen and Chris Prentiss in New York; Editing by Paul Simao)