The Treasury Department announced Monday they want new regulation requirements for all-cash real estate deals to crack down on money laundering in the housing market.
The Associated Press reported the United States real estate market has been used by individuals and shell corporations as a way to launder dirty money.
As of now, only 12 cities in the United States require title insurance companies to disclose the identity of people who use shell companies to buy residential real estate valuing $300,000 or more.
The Treasury Department asked for the public's input on a new real estate market regulation that would address weak spots in the current market.
Himamauli Das, the acting director of the Treasury Financial Crimes Enforcement Network, said being more transparent in purchases from the real estate market could "strengthen U.S. national security and help protect the integrity of the U.S. financial system."
"Increasing transparency in the real estate sector will curb the ability of corrupt officials and criminals to launder the proceeds of their ill-gotten gains through the U.S. real estate market," he added.
The Pandora Papers, which according to Investopedia, were a release of more than 12 million leaked documents that reveal the hidden and sometimes unethical or corrupt dealings of the global wealthy and elite, revealed how corrupt government officials and world leaders have been tied to using shell companies to purchase real estate in the United States and around the world.
For more reporting from the Associated Press, see below.
The U.S. real estate market has long been viewed as a stable way station for to launder proceeds from criminal activity.
The use of shell companies by current and former world leaders, and those close to them, to purchase real estate and other assets in the U.S. and elsewhere was recently spotlighted by the International Consortium of Investigative Journalists' publication of the Pandora Papers.
The leaked documents acquired by the consortium showed King Abdullah II of Jordan, former U.K. prime minister Tony Blair and other prominent figures used shell companies to purchase mansions, exclusive beachfront property, yachts and other assets for the past quarter century.
The tax dodges can be legal but have spawned various proposals to enhance tax transparency and reinforce the fight against tax evasion.
The effort to push for new real estate market regulation comes as the Biden administration on Monday issued its "U.S. Strategy on Countering Corruption."
The strategy was published as President Joe Biden prepares to host the first White House Democracy Summit, a virtual gathering of leaders and civil society experts from more than 100 countries that is set to take place Thursday and Friday.
The strategy offers broad brushstrokes for confronting corruption at home and abroad. It includes calls for the U.S. government to shore up regulatory gaps, elevating anti-corruption in U.S. diplomatic efforts and bolstering the protection of civil society and members of the media, including investigative journalists, who expose corruption.
The metropolitan areas currently facing reporting requirements are Boston; Chicago; Dallas-Fort Worth, Texas; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
