The White House is looking for public input on ways to fight corruption in the U.S. real estate market, part of a larger project to reduce illegal financial activity.
As the Financial Times reported on Tuesday (Dec. 7), the Biden administration is especially focused on the use of all-cash transactions for commercial and residential real estate purchases, which it says are often used to launder money.
The administration is also proposing an expansion of reporting requirements on all-cash purchases of residential real estate valued at $300,000 or higher, something that is already in place in 12 metropolitan areas.
“Given the relative stability of the real estate sector as a store of value, the opacity of the real estate market and gaps in industry regulation, the U.S. real estate market continues to be used as a vehicle for money laundering and can involve businesses and professions that facilitate — even if unwittingly — acquisitions of real estate in the money laundering process,” the Treasury department’s Financial Crimes Enforcement Network (FinCEN), which will be leading the process, said in a statement.
But before it can put together new regulations, the government wants public input to help create more targeted reforms and to “minimize the burden” on the real estate industry, as one senior administration official told the FT.
Some of the things the administration hopes to determine are the types of real estate that need scrutiny, the dollar value threshold, the geographic scope of the regulations and who should have to follow reporting requirements, the FT stated.
The White House’s broader anti-corruption strategy will also involve designating more intelligence and diplomatic resources and greater cooperation with foreign governments, focusing on sectors that include construction, transportation and natural resource extraction.
Read more: FinCEN Warns of Rise in Environmental Crimes
Last month, FinCEN said it had noticed an uptick in “environmental crimes,” which are offenses such as wildlife and hazardous substance trafficking or illegal mining.
“Global environmental crimes are estimated by some international organizations to generate hundreds of billions [of dollars] in illicit proceeds annually, and now rank as the third-largest illicit activity in the world following the trafficking of drugs and counterfeit goods,” FinCEN said.
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