The


U.S.
Department
of
the
Treasury’s
Financial
Crimes
Enforcement
Network
(FinCEN)

announced
on
Wednesday
the
publication
of
two
rules
that
extend
anti-money
laundering
regulations
to

real
estate
agents
and
investment
advisers,
which
is
part
of
a
broader

Biden
administration
plan
designed
to
curb
corruption.

“The
final
residential
real
estate
rule
will
require
certain
industry
professionals
to
report
information
to
FinCEN
about
non-financed
transfers
of
residential
real
estate
to
a
legal
entity
or
trust,
which
present
a
high
illicit
finance
risk,”
FinCEN
announced.
“The
rule
will
increase
transparency,
limit
the
ability
of
illicit
actors
to
anonymously
launder
illicit
proceeds
through
the
American
housing
market,
and
bolster
law
enforcement
investigative
efforts.”

FinCEN
detailed
the
potential
impact
of
the
new
rule
in
an
associated
“fact
sheet,”
which
describes
a
nationwide
requirement
for
“certain
persons
involved
in
real
estate
closings
and
settlements
to
report
information
to
FinCEN
about
specified
transfers
of
residential
real
estate
that
are
a
high
risk
for
illicit
finance.”

The
final
real
estate
rule
will
take
effect
on
Dec.
1,
2025.

The
rule
for
investment
advisers
is
effective
on
Jan.
1,
2026.
It
includes
“minimum
standards
for
anti-money
laundering
and
countering
the
financing
of
terrorism
(AML/CFT)
programs”
to
be
established
by
registered
investment
advisers
(RIAs)
and
exempt
reporting
advisers
(ERAs).
These
parties
must
report
suspicious
activity
to
FinCEN
under
provisions
of
the
Bank
Secrecy
Act.

The
rules
were
“loosened”
following
input
from
trade
groups,
according
to

reporting
at
the


The
Wall
Street
Journal.
These
groups
reportedly
took
issue
with
the
originally
proposed
versions
of
the
rule
for
investment
advisers,
but
they
said
the
the
final
version
“represented
an
improvement
to
the
department’s
2015
proposal,”
the
Journal
reported.

FinCEN
explained
that
in
terms
of
the
real
estate
rule,
a
new
flexibility
has
been
added
to
make
the
requirements
less
burdensome.
Parties
to
a
real
estate
transaction
can
now
“adopt
a
written
agreement
that
designates
a
particular
individual
with
the
duty
to
report,”
the
Journal
reported.

Meanwhile,
a
standard
of
reasonability
has
been
adopted
that
will
allow
the
person
reporting
a
transaction
to
“rely
on
information
provided
by
another
party,
so
long
as
they
don’t
have
any
reason
to
suspect
the
reliability
of
the
information.”

U.S.
Treasury
Secretary

Janet
Yellen
said
her
department
has
been
aiming
to
disrupt
attempts
by
bad
actors
to
use
the
U.S.
as
a
hiding
and
laundering
place
for
“ill-gotten
gains,”
and
that
addressing
regulatory
deficiencies
are
a
part
of
that
effort.

“These
steps
will
make
it
harder
for
criminals
to
exploit
our
strong
residential
real
estate
and
investment
adviser
sectors,”
Yellen
said.

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