There are several agencies and organizations, both in the U.S. and abroad, that are combating money-laundering and terrorist financing and can provide guidance and support on these important issues. Real estate agents should familiarize themselves with these agencies and organizations to better understand how they impact the business of real estate.
Financial Action Task Force (FATF)
FATF is an inter-governmental body established in 1989. The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas. The FATF has developed a series of Recommendations that are recognised as the international standard for combating of money laundering and the financing of terrorism and proliferation of weapons of mass destruction.
Financial Crime Enforcement Network (FinCEN)
FinCEN is a bureau of the U.S. Department of Treasury that collects and analyzes information about financial transactions in order to combat money laundering, terrorist financiers, and other financial crimes. FinCEN is responsible for collecting Suspicious Activity Reports (SARs) which are used to report known or suspected violations of law or suspicious activity observed by financial institutions subject to the Bank Secrecy Act. Over the past several years, FinCEN has conducted SAR narrative assessments to identify reports of suspected money laundering in the real estate industry. It has also proposed rulemaking to address money laundering.
Office of Foreign Asset Control (OFAC), U.S. Department of Treasury
OFAC administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign states, organizations and individuals. As part of the Office of Terrorism and Financial Intelligence (TFI), OFAC works with TFI to safeguard the financial system against illicit use and to combat rogue nations, terrorist facilitators, weapons of mass destruction (WMD) proliferators, money launderers, drug kingpins, and other national security threats. As part of its duties, OFAC is responsible for publishing the Specially Designated Nationals (SDN) List which identifies individuals and organizations with whom U.S. citizens and permanent residents cannot conduct business.
United States Internal Revenue Service (IRS) - Currency Transaction Reports
The IRS is the U.S. federal government agency that collects taxes and enforces the internal revenue laws. The IRS requires each person engaged in a business or trade to report any cash transactions they receive in excess of $10,000 from one buyer as result of a single or related series of transactions. The transaction must be reported to the IRS using Form 8300. The information provided by Form 8300 provides valuable information to the IRS and FinCEN in their efforts to combat money laundering.