Long-Awaited Final Rules Represent Dramatic Improvements to U.S. Anti-Money Laundering Framework

WASHINGTON, DC – On Wednesday, the Financial Accountability and Corporate Transparency (FACT) Coalition welcomed a pair of final U.S. Treasury regulations closing long-standing loopholes used by financial criminals to launder money through U.S. residential real estate and private investment markets. 

“With the introduction of these much-needed safeguards, 2024 will go down in history as a major turning point in the fight against dirty money in the U.S.,” said FACT executive director Ian Gary. “FACT is proud to have been a prominent voice of support for these important reforms. After years of advocacy by lawmakers, anti-money laundering experts, and civil society, the era of unmitigated financial secrecy and impunity for financial criminals in the U.S. seems to finally be over.”

While FACT’s analysis of the final regulations is ongoing, earlier versions were widely praised by anti-corruption advocates across the political spectrum. Treasury’s final rule for real estate transactions introduces a permanent, nationwide framework for reporting on the beneficiaries of anonymous all-cash sales and non-sale transfers of residential properties. Certain investment advisers, meanwhile, will now have to adopt standard risk-based anti-money laundering and counter-terror financing (AML/CFT) safeguards, including the requirement to file suspicious activity reports (SARs).

These new anti-money laundering safeguards – alongside the ongoing implementation of the nation’s beneficial ownership registry under the Corporate Transparency Act (CTA) – form the backbone of the U.S. strategy to combat illicit finance and corruption. The illicit finance risks associated with the U.S. real estate and private investment sectors are extensively documented in a pair of agenda-setting reports by FACT and its members, Acres of Money Laundering and Private Investments, Public Harm, as well as in Treasury’s most recent National Anti-Money Laundering Risk Assessment.

“For too long the U.S. residential real estate and investment advisory sectors have been glaring gaps in our nation’s anti-money laundering framework, allowing corrupt foreign officials and criminals to move dirty money into the U.S. financial system,” said FACT policy director Zorka Milin. “While there is more work to be done, these new rules show that the government is serious about cracking down on criminal abuse of U.S. markets and building a safer, fairer economy for all.”

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Notes to the Editor: 

• Click here to read Treasury’s final rule for residential real estate transactions.
• Click here to read Treasury’s final rule for investment advisers.
• In April, FACT submitted comprehensive recommendations to Treasury to ensure the efficacy of both final rules.
  • Click here to read FACT’s comment on the draft residential real estate rule.
  • Click here to read FACT’s comment on the draft rule for investment advisers.
• FACT’s latest report, co-published with the Anti-Corruption Data Collective and Global Financial Integrity, further expands a burgeoning evidence base that points to systemic money laundering risk in the colossal U.S. commercial real estate market. While FinCEN’s final real estate rule only covers residential properties, a separate proposed rule on commercial real estate is expected next year.