FinCEN Proposes New AML Regulations For Real Estate Sector & Investment Advisers

On April 16, 2024 the Financial Crimes Enforcement Network (FinCEN) submitted a report to Financial Accountability and Corporate Transparency (FACT Coalition) regarding proposed AML regulations in the real estate and investment advisory sector.

The proposal focuses on improving reporting and compliance requirements to fight financial crimes. It further calls for immediate feedback from stakeholders to finalize the regulations so that they can be implemented.

Why is there the need for new regulations?

Both of these sectors are about $180 trillion and have seen a lot of financial crimes due to significant financial transactions and insufficient oversight. Due to the lack of transparency, it was difficult to identify and track suspicious activities.

These regulations set clear guidelines for reporting and compliance and align well with global AML/CFT standards. In conclusion, this will save the U.S. financial system to avoid becoming a haven for illicit activities.

What are the Proposed Regulations?

The FinCEN proposed AML regulations to enhance oversight for real estate transactions that include stringent due diligence requirements.

The proposed regulations also call for reporting  transactions that exceed specific monetary thresholds to close the loop polls used in the real estate for money laundering.

For the Investment advisory sector the implementation of AML/CFT programs require  the filing of suspicious activity reports by registered investment advisers to ensure AML compliance and manage the surge of financial crimes within this sector.

Are these trillion-dollar sectors ready for these regulations, or will they use their influence to block implementation?”

FinCEN proposed new AML regulations for the residential real estate transfers and investment advisers. These will be implemented,  beginning with a public comment period in which stakeholders provide feedback on the proposals. Once reviewed and revised these regulations may get revised accordingly.

This will include the new compliance process that FinCEN believes will be beneficial for eliminating the financial crimes in these sectors.