Washington, DC, 11 March 2015, Global Financial Integrity.

This post was originally published on the Global Financial Integrity website.

GFI and 16 Other Groups Send Letter to FinCEN Urging Enhanced Customer Due Diligence Requirements for U.S. Banks and Real Estate Professionals

Global Financial Integrity (GFI) and sixteen other civil society organizations called on the U.S. Department of the Treasury to curb money laundering in the U.S. financial system by requiring real estate professionals and financial institutions to know their customers. In a letter to the Financial Crimes Enforcement Network (FinCEN), the Treasury Department division charged with combatting money laundering with financial intelligence, the transparency groups note that the current secrecy surrounding anonymous company ownership and the lack of due diligence in the real estate sector open the U.S. financial system to rampant abuse by criminals and kleptocrats.

Citing a recent series in The New York Times on the widespread use of anonymous companies by wealthy foreigners to buy up Manhattan real estate, the civil society letter notes that the series:

“…illustrates the ease with which it is possible to spend millions of dollars on anonymous real estate transactions facilitated by the real estate industry. Investors mask the true ownership of property in the United States through anonymous companies. The effects of such companies go far beyond hiding the ultimate owners of Manhattan’s real estate. Anonymous companies allow corrupt politicians and organized crime to transfer and hide illicitly acquired funds worldwide, and fuel an abuse of power and a culture of impunity. The ability to conceal their illicitly-obtained-gains fuels corruption, breeds instability and diverts resources from those they should benefit.”

» The complete letter is available here.

“There is simply no excuse for not knowing with whom you are doing business,” said GFI Legal Counsel and Director of Government Affairs Heather Lowe, an expert on international money laundering. “Anonymous entities are a favorite tool of criminals, terrorists, and tax evaders looking to launder illicit funds. There is no reason to grant these entities—and the dirty money they’re moving—open access to the American financial system. Taking away the temporary exemption—which somehow seems to have become permanent—granting real estate professionals an exception from knowing their customers, and also requiring banks to know the true, human, beneficial owners of each and every account that they open, are two straightforward ways to begin curbing the trillions of dollars in illicit capital flowing through the global financial system.”

The full list of letter signatories included the Center for Effective Government, Citizens for Responsibility and Ethics in Washington (CREW), EG Justice, the Financial Accountability and Corporate Transparency (FACT) Coalition, Global Financial Integrity, Global Integrity, Global Witness, the Government Accountability Project (GAP), Jubilee USA Network, Missionary Oblates USA, New Rules for Global Finance Coalition, OpenTheGovernment.org, Oxfam America, Tax Justice Network USA, Transparency International, Transparency International-USA, and U.S. Public Interest Research Group (PIRG).

Notes to Editors

• Click here to read coverage of the letter to Treasury in The New York Times.
• Click here to read the five-part February 2015 series in The New York Times, “Towers of Secrecy,” about anonymous shell companies and New York real estate.

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