Kenneth Rijock

Kenneth Rijock

Sunday, May 10, 2015

NGO GROUP ASKS FINCEN TO REPEAL EXEMPTION FOR REAL ESTATE INDUSTRY FROM AML


A coalition of non-government organizations, including Transparency International and Global Witness, have written to the Director of the Financial Crimes Enforcement Network, urging that FinCEN repeal the "temporary" exemption, from the PATRIOT Act, granted to financial institutions, in connection with real estate settlements and closings, back in 2002. The purpose of the letter is to insure that adequate due diligence be performed, by both real estate professionals, and financial institutions, regarding legal entity customers in real estate transactions. Apparently, a series of newspaper articles, exposing the fact that many expensive Manhattan residences are purchased by shell companies with anonymous owners, has alerted many NGOs to this sordid practice.  

In short, the letter asks that the loophole existing, regarding the use of shell companies, be closed by repealing the exemption, which was reportedly promulgated upon the request of a real estate industry worried over lost revenue, should high net-worth foreign clients invest in other countries.

I agree that it is high time to shut the door on anonymous corporate purchasers, given that there could be corrupt PEPs, criminal elements, and sundry foreign tax cheats in the mix of purchasers. readers who wish to review the complete text of the letter can access it here*.
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* Letter to Director Calvery 

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