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All-cash transactions under scrutiny of Biden administration

It's part of larger "U.S. Strategy on Countering Corruption"

The Biden administration announced on Monday that it is looking to expand reporting requirements on all-cash real estate transactions.

The announcement came via a U.S. Treasury Department notice seeking public comment on this potential regulation.

According to the Biden administration, the aim of this regulation would be to crack down of individuals using the U.S. real estate market to launder money made through illicit activities, which the administration views as a vulnerability in the real estate market.

There are currently only 12 metropolitan areas in the U.S. in which title insurance companies are required by law to file reports identifying individuals who made all-cash real estate purchases exceeding $300,000 through shell companies. These metros include Boston, Chicago, Dallas-Fort Worth, Honolulu, Las Vegas, Los Angeles, Miami, New York City, San Antonio, San Diego, San Francisco, and Seattle.

“Increasing transparency in the real estate sector will curb the ability of corrupt officials and criminals to launder the proceeds of their ill-gotten gains through the U.S. real estate market,”  Himamauli Das, acting director of Treasury’s Financial Crimes Enforcement Network, said in a statement.

Das went on to say that the regulations could “strengthen U.S. national security and help protect the integrity of the U.S. financial system.”

The use of shell companies to purchase real estate and other assets in the U.S. and abroad by world and industry leaders was highlighted in the “Pandora Papers,” a collection of documents obtained and published by the International Consortium of Investigative Journalists.

These proposed regulations are just a small part of the Biden administration’s “U.S. Strategy on Countering Corruption.” The strategy offers loosely outlined plans for curbing corruption both in the U.S. and internationally, including plans to elevate anti-corruption in U.S. diplomatic efforts, as well as plans to shore up regulatory gaps, and improve protections of civil society and members of the media, including investigative journalists working to expose corruption.

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