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The U.S. government is laser-focused on uncloaking bad actors hiding behind shell companies to engage in money laundering and other illicit activities and is seeking to adopt new regulations to accomplish that goal — rules that will impact the housing industry.

The Financial Crimes Enforcement Network (FinCEN) has issued a Notice of Proposed Rulemaking (NPRM) that will require companies to report beneficial-ownership information as part of the Corporate Transparency Act (CTA). The goal of the regulatory push is to prevent criminals from abusing legal corporate entities, such as shell companies, to conceal proceeds from “corrupt and criminal acts,” including using shell companies to launder or conceal illicit funds through the purchase of real estate assets.

“Current U.S. law allows those seeking to hide their financial activities to form companies anonymously — without disclosing who ultimately owns and profits from them,” explained Deputy Secretary of the Treasury Wally Adeyemo in prepared remarks. “That makes moving illicit funds into the U.S. financial system especially enticing for criminals and corrupt actors, and it makes it even more important that the federal government has the tools to prevent and combat it.”

Adeyemo said the International Monetary Fund estimates that corruption costs governments around the world some $1 trillion annually in lost tax revenue.