Treasury Highlights AML Risks for Investment Advisers
Assistant Secretary of the Treasury for Terrorist Financing and Financial Crimes Elizabeth Rosenberg highlighted areas of increasing concern for AML/CFT policymakers: the hiding of ownership of assets managed by investment advisers and the lack of regulation over the non-financed segment of the real estate market.
In remarks at the ABA-ABA Financial Crimes Enforcement Conference, Ms. Rosenberg pointed to instances in which investment advisers were manipulated by bad actors to hide the ownership of assets, including ownership by a Russian oligarch. She asserted that the Chinese government routinely conceals its ownership or control of investment funds to disguise efforts to steal technology or expertise, while evading the scrutiny of CFIUS. Through investigations, Treasury identified multiple instances of foreign actors or governments investing through U.S. investment advisers to conceal interests in U.S. entities and avoid scrutiny from CFIUS.
Ms. Rosenberg said Treasury's AML/CFT regime does not currently cover the approximately 24 percent of the U.S. residential real estate market that is non-financed, as well as many commercial real estate transactions. She described commercial real estate as "an attractive market in which to hide and grow illicit funds" because of its size and liquidity, as well as the absence of comprehensive AML regulation.
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