The U.S. Treasury Department today announced it will require people purchasing high end real estate in New York and Miami to disclose who they really are. Global Witness strongly welcomes this move, which will help stop the criminal and corrupt from hiding behind anonymously owned shell companies to launder the proceeds of crime through the property market.
“This is an important step toward keeping corrupt or dirty money out of the U.S. – but it is just the beginning. Anonymously owned shell companies are like the getaway cars for the world’s criminal and corrupt, allowing them to use the U.S. financial and legal system as a safe haven for their suspect funds,” said Stefanie Ostfeld of Global Witness.
The New York Times found that shell companies were used to purchase nearly half of all of high end properties across the U.S.
Global Witness has previously shown how owners of anonymous companies registered in the U.S. are ripping off innocent people and businesses across America. Drawing on cases involving anonymous companies from 27 states, The Great Rip Off shows how fraudsters, mobsters, money-launderers, tax-evaders and corrupt politicians are able to use anonymously-owned American companies to cover their tracks and evade the authorities.
“To keep dirty money out of the U.S. and to protect Americans from hucksters and criminals, we need to end the use of secret shell companies across the board, not just in the property market,” said Ostfeld.
Global Witness is calling for the U.S. Treasury to expand today’s program to the entire country, to make it permanent and to place the ownership information in the public domain. Congress has previously required the real estate sector to implement anti-money laundering programs in the PATRIOT Act, but Treasury granted the sector a temporary exemption more than 13 years ago. Treasury should end this exemption, bringing the U.S. in line with the global standard.
In addition, Congress should require the collection of information on the real owners of all American companies, not just those used in high end real estate.Global Witness is calling on other governments to follow the U.S. Government's lead in identifying the real owners behind property and stopping dirty money from entering the real estate market.
The UK government announced in July 2015 that it would undergo consultations to develop legislation that will require the identification of the beneficial owners of UK property. However, six months later those consultations are yet to begin. The UK government should begin those consultations immediately and other governments should follow this example.
Stefanie OstfeldDeputy Head of US Office
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