Managing Partner Robert M. Steeg is a regular contributing columnist on real estate for Reuters Legal News and Westlaw Today. His article, “FinCEN Regulations That Are Combatting Corruption and Impacting the Real Estate Industry,” was published on November 11, 2024. Following is an excerpt, and you can download a PDF of the entire article below or continue reading on Reuters Legal News and Westlaw Today.
FinCEN Regulations That Are Combatting Corruption and Impacting the Real Estate Industry
Everyone would agree that money laundering by terrorists, enemy nations, and other bad actors is a problem that the government should try to control. With just such intentions, the Financial Crimes Enforcement Network (FinCEN) has implemented new regulations to combat corruption that business and real estate professionals may not be aware of, but that their clients need to comply with.
A sweeping program — the Beneficial Ownership Information (BOI) program — was established under a bipartisan federal law called the Corporate Transparency Act. The law has the stated goal of making it “harder for bad actors to hide or benefit from their ill- gotten gains through shell companies or other opaque ownership structures” by forcing companies to disclose the actual human individuals behind them.
This program is mandatory and will affect most if not all of the corporations and limited liability companies in which people in the real estate and general business fields are involved, as well as many partnerships, primarily limited partnerships and partnerships that own real estate. The deadline for compliance is Dec. 31, 2024. every corporation, limited liability company, and many partnerships.
On Aug. 28, 2024, FinCEN also issued final rules to safeguard residential real estate from money-laundering. This rule delivers on key lines of effort outlined in the Biden-Harris administration’s U.S. Strategy on Countering Corruption by closing loopholes in the U.S. financial system that will make it harder for criminals to exploit the residential real estate sector.
Here’s what business and real estate professionals need to know.