Completely rewrite the following article in a fresh and original style. Ensure the new content conveys the same sentiment and message as the original. The rewritten article should:
- Start with a compelling introduction that hooks the reader (do not label this section).
- Maintain any lists and points as they are, using numbering and bullet points where necessary. Rewrite the explanations and discussions around these points to make them fresh and original. Ensure the lists are formatted correctly with proper numbering or bullet points.
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Organize the content into clear, logical sections. Subheadings are not mandatory. Each section should have a subheading only if it enhances readability and comprehension.
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Make sure the article flows coherently, is engaging, and keeps the reader interested until the end. Reorganize and structure the content efficiently to enhance readability and comprehension. Use varied sentence structures and vocabulary to avoid monotony. Avoid directly copying any sentences or phrases from the original content. Here is the original content:
Treasury Secretary Janet Yellen said the new reporting rules will “close critical loopholes in the U.S. financial system” that had allowed criminals to launder money through all-cash residential real estate transactions.
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The U.S. Department of the Treasury on Wednesday finalized new rules for reporting cash sales of residential real estate in an effort to curb money laundering attempts by criminals.
Under the new rules, investment advisers and real estate professionals will be required to report cash sales of residential real estate that is sold to legal entities, trusts and shell companies. Those individuals will need to report names of sellers and anyone else benefitting from the transaction, as well as the details of the property being sold and any payments involved.
Cash sales to individuals and purchases that involve financing will not face the same reporting requirements.
The rules are part of an effort by the Biden administration to counter corruption through money laundering, to protect U.S. national security and to increase transparency in real estate transactions, a press statement from the Treasury’s Financial Crimes Enforcement Network (FinCEN) explained.
“The Treasury Department has been hard at work to disrupt attempts to use the United States to hide and launder ill-gotten gains,” Treasury Secretary Janet Yellen said. “That includes by addressing our biggest regulatory deficiencies, including through these two new rules that close critical loopholes in the U.S. financial system that bad actors use to facilitate serious crimes like corruption, narco-trafficking and fraud. These steps will make it harder for criminals to exploit our strong residential real estate and investment adviser sectors.”
Individuals responsible for reporting the real estate transaction details will be determined through a cascade hierarchy outlined by FinCENwhereby the reporter may be the closing or settlement agent listed on the closing statement, the individual who files the deed with the recordation office, the title insurance company or some other entity, depending on the situation.
A number of organizations expressed support for the new regulations, including the National Association of Realtors (NAR).
“Bad actors are exploiting the current vulnerabilities,” NAR spokesperson Tori Syrek said in a statement. “FinCEN’s final rule is a pragmatic, risk-based approach to combating money laundering and these other crimes.”
Ian Gary, executive director of nonprofit the FACT Coalition, said the rules were “much-needed safeguards.” The FACT Coalition works to promote corporate transparency.
“After years of advocacy by lawmakers, anti-money laundering experts and civil society, the era of unmitigated financial secrecy and impunity for financial criminals in the U.S. seems to finally be over,” Gary said.
Money laundering through real estate transactions also has the potential to drive up housing costs, which has become a core economic issue for this year’s presidential candidates. A 2019 Canadian study on the impact of money laundering on the country’s home values found that the practice pushed housing prices up by 3.7 percent to 7.5 percent.
All-cash purchases made up 46.5 percent of all luxury home purchases in Q4 2023, setting a new high in cash purchases and luxury prices, according to data from Redfin.
Improving corporate transparency has become a focal point of the Biden administration’s agenda. In conjunction with those efforts, the administration has also required around 32 million small businesses to register their business with the government in order to curb criminal acts through shell companies.
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Email Lillian Dickerson
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