The impact of beneficial ownership transparency on illicit purchases of US property

A working paper from the Anti-Corruption Data Collective

High value real estate is a popular destination for corrupt and criminal foreign assets, in part due to limited oversight and lack of transparency in real estate transactions. In response to these concerns, the US Treasury began implementing a series of Geographic Targeting Orders (GTOs) in 2016, forcing corporate buyers making all-cash purchases in targeted counties to report the company’s ultimate owner. To estimate the causal effect of GTOs on these types of transactions, we combine data on millions of real estate transactions over the period 2014-2019 with a staggered difference-in-differences design. Our analysis suggests the absence of an aggregate effect of the GTOs on corporate all-cash purchases in targeted counties, as well as little evidence of substitution into other types of purchases. We contend that the lack of overt enforcement and validation of the ownership requirements failed to create a sufficient deterrent effect to drive out participation in the sector by illicit actors.

The-impact-of-beneficial-ownership-transparency-on-illicit-purchases-of-US-property.pdf

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