Government Watch List
Three Key Laws currently affect the Real Estate Industry and how you do business. Two of the Three Key Laws apply now, to everybody, even to you and your company:
1. The Patriot Act - concentrates on anti-money laundering by Broadening the Money Laundering Control Act and Expanding the Bank Secrecy Act.
1a. The Money Laundering Control Act - Any person or business that "knows” money or property comes from "some” criminal activity, and engages in a financial transaction with that money or property is a "Money Launderer” who can be fined the greater of $500,000 or two times the value of the property involved and incarcerated for 20 years if the money or property did come from certain types of illegal activity.
(The Building Owners and Managers Association reports that law enforcement authorities believe real estate to be a prime target for money launderers. Consequently, real estate firms should establish Anti-Money Laundering programs as soon as possible.)
2. Executive Order 13224 & the OFAC SDN List - Prohibits all U.S. individuals and businesses from engaging in any form of financial transaction with persons or entities designated as terrorists or their associates.
3. The Bank Secrecy Act may apply to you, depending on Treasury regulations that have not been issued yet. This Act gives the Treasury Department the authority to issue anti-money laundering regulations to "Financial Institutions”. Types of "financial institutions,” include:
- loan and finance companies
- investment companies
- persons involved in real estate closings and settlements
Additional Information on the Executive Order 13224
- In 2001 President Bush issued Executive Order 13224, the Global Terrorist Executive Order for "Blocking Property Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism.” The Order gives the U.S. government additional powers for stopping the flow of international terrorist financing, and empowers the Office of Foreign Assets Control ("OFAC”) of the Department of Treasury, which enforces trade sanctions, as the federal agency responsible for implementing it.
- The Order expands the Treasury Department’s power to target the support structure of terrorist organizations by freezing the U.S. assets and blocking the U.S. transactions of terrorists and those that support them.
- All U.S. businesses and non-profit agencies must address internal operations to ensure compliance with the Order. The Order makes U.S. businesses responsible for monitoring their current interactions with investors, joint ventures, trading partners, vendors and customers. OFAC publishes and frequently updates a list of specially designated nationals that it is illegal to do business with.
OFAC SDN List
- A list of countries, persons, groups and businesses considered to be terrorists (or their associates) or narcotics traffickers whose property and interests in property is "blocked” and may not be "transferred, paid, exported, withdrawn or otherwise dealt in”.
- "Property” and "Property Interest” means money, checks, drafts, debts, notes, securities, mortgages, pledges, liens, security interests, leases, rents, real estate, insurance policies, annuities, contracts and "any other property, real or personal, tangible or intangible, or interests therein”.
- "Blocked” means that the property may not be transferred, must be reported to Treasury and, if funds, must be seized and placed in an interest bearing account.
- "Transfer” means any transaction whose purpose is to create, convey or alter, directly or indirectly, any property or property interest. This includes making, executing, delivering or conveying any assignment, check, deed, lease, mortgage, contract, gift, sale, making any payment, giving any credit, or providing any service.
This applies to everyone, now. You are responsible for not doing business with any person or business on the OFAC List.
In short, federal law prohibits any direct or indirect business, transaction, service or credit to or with anyone on the SDN List. Non-compliance is punishable by law.
Benefits of Government Watch List Search
- Compliance with Federal Laws.
- The Patriot Act
- The Money Laundering Control Act
- Executive Order 13224
- Establishment of an Anti-Money Laundering Program.
- Development of Internal Policy, Procedures, Controls and Corporate Governance.
- Provides compliance with terms and conditions of management contracts.
Managing the technicalities of government watch list searches can be complicated. Compliance Depot can help. Call 888.493.6938 to speak with a sales associate today.