The FinCEN reportedly extended a Geographic Targeting Order ("GTO") originally imposed in 2016 to flag potential money-laundering issues concerning the use of legal entities to purchase residential real estate. The extension has not yet been confirmed by the U.S. Treasury Department. The six-month temporary GTO, which was renewed in August 2017, requires U.S. title insurance companies to identify the natural persons behind shell companies used to purchase high-end residential real estate in select markets, including New York, Miami, Los Angeles, San Francisco, San Diego, San Antonio and Honolulu. While the GTO originally applied only to cash deals, it was broadened in 2017 to cover transactions involving wire transfers as well.
The report states that the GTO, which was set to lapse on March 20, 2018, has been renewed through September 16, 2018. Its operative provisions are expected to remain the same, including the market-specific thresholds that trigger reporting obligations. Title insurance companies that must report on a covered transaction do so by filing a FinCEN Form 8300 within 30 days of closing.
The Financial Crimes Enforcement Network ("FinCEN") expanded its efforts to combat money laundering in the luxury residential real estate market. FinCen also issued guidance on the risks associated with "all-cash" transactions in that market.