On 29 August, the Financial Crimes Enforcement Network (FinCEN) published in the Federal Register its final rule on “Anti-Money Laundering Regulations for Residential Real Estate Transfers.” The rule requires entities involved in real estate closings and settlements to report the details of transactions that involve non-financed transfers of residential real estate. The reporting of information is intended to assist law enforcement agencies with their anti-money laundering efforts.
In response to the proposed rule issued by FinCEN on 16 February, WERC submitted a comment letter requesting that FinCEN mitigate the reporting requirements between a transferee and their employer or relocation management company temporarily taking the property into their custody. Specifically, WERC requested that FinCEN exempt “An individual; acting as nominee, intermediary, custodian, or an agent on behalf of another individual.”
In the final rule, FinCEN did not adopt the request for the exemption proposed by WERC. WERC had also proposed that the agency use reports under the Corporate Transparency Act in lieu of the new reporting requirements as they were redundant. FinCEN denied the request. However, the agency greatly appreciated the comments of WERC and stated the recommendation to streamline processes was not lost on them.
While FinCEN did not approve of the exemption requested by WERC, the agency also did not close the door on their consideration of WERC’s request. We will continue to pursue avenues for further clarification to mitigate reporting requirements on workforce mobility that clearly do not pose a money laundering threat.