As financial sanctions have been publicized as the main strategy to punish Russian oligarchs who have invested in the US real estate market, it begs to question, what else should the government be doing to prevent money laundering not only in a time of war but for all illicit activity?
Effective April 30th, 2022, Geographic Targeting Orders (GTOs) were expanded by the Finance Crimes Enforcement Network (FinCEN) to now include the District of Columbia, Northern Virginia, and Maryland metropolitan area. GTOs have been used since 2016 to target and document cash residential real estate transactions to beneficial owners. Over the past 5 years, the Geographic Targets have been increasing.1
For the title insurance industry, the burden of collecting, documenting, reporting, and retaining this information falls on them, not on the federal agency which enacts these policies. To further compound the problem, definitions of “non-financed” transactions are changing to include cryptocurrency, ANY funds transfer, money order in any form, business check, or personal check.2 ALTA recently published its response to the FinCEN as part of an effort to request more standardization for documenting these purchases and create a database for the industry to reference in order to prevent duplication of information. As other aspects of real estate get involved one must wonder, how far-reaching will these orders go, and will they one day be countrywide?