FinCEN GTOs – Real Estate
FinCEN GTOs – Real Estate – is a warning that anyone that deals with the cannabis industry or any business where large amounts of cash are involved. Be sure you understand the disclosure rules if you are assisting anyone in the purchase of a residential apartment [even if no business use is contemplated in the targeted counties.
One of the many reforms being pushed to identify buyers and combat illicit money laundering has been the Geographic Targeting Orders (GTO) issued by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Last week, FinCEN announced that they are once again updating their reporting requirements to further crack down on the flow of “dirty” money into real estate. This sixth revision of FinCEN’s GTO is effective November 17, 2018, through May 15, 2019.
The revised requirements have been made public to all parties and supersede the previous GTO. Title insurance companies now must report the identity of purchasers to FinCEN in residential real estate transactions when the:
Purchaser is buying residential real estate in New York City (as well as many other covered areas as set forth in the GTO) where the total purchase price is at least $300,000;
Purchaser is a “Legal Entity” (which is defined by the GTO as a corporation, limited liability company, partnership or other similar business entity, whether formed under the laws of a state, or of the United States or a foreign jurisdiction);
Purchase of such residential real estate is made without a bank loan or other form of external financing; and
Purchase is made, at least in part, using currency or a cashier’s check, certified check, traveler’s check, personal check, business check, money order in any form, funds transfer, or virtual currency.
FinCEN GTOs – Real Estate
GTOs continue to provide valuable data on the purchase of residential real estate by persons possibly involved in various illicit enterprises. Reissuing the GTOs will further assist in tracking illicit funds and other criminal or illicit activity, as well as inform FinCEN’s future regulatory efforts in this sector.
Today’s GTOs cover certain counties within the following major U.S. metropolitan areas:
1. The Texas counties of Bexar, Tarrant, or Dallas;
2. The Florida counties of Miami-Dade, Broward, or Palm Beach;
3. The Boroughs of Brooklyn, Queens, Bronx, Staten Island, or Manhattan in New York City, New York;
4. The California counties of San Diego, Los Angeles, San Francisco, San Mateo, or Santa Clara;
5. The City and County of Honolulu in Hawaii;
6. The Nevada county of Clark;
7. The Washington county of King;
8. The Massachusetts counties of Suffolk, or Middlesex; or
9. The Illinois county of Cook;
Transactions without bank financing that include a portion of the purchase price paid, at least in part, using currency or a cashier’s check, a certified check, a traveler’s check, a personal check, a business check, a money order in any form, a funds transfer, or virtual currency. The full text of the FinCEN GTO can be found here.