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Almost a week after the start of Russia’s war against Ukraine, the United States and other countries around the world continue to work on imposing more economic sanctions on Russia. All in order to block any assets from that country.
However, in the United States the real estate sector is an important element of investment for Russian financiers and entrepreneurs. In this sense, it is not clear how the government of President Joe Biden will be able to obtain this information and prevent the movement of money from Russia through real estate.
In a study carried out by NBC News, it is highlighted that members of the real estate sector US, as well as some legislators, doubt the effectiveness of the financial blockade of Russian banks. Well, real estate in the United States is what they call a “destination of choice” for money launderers.
In the case of Russian investors, a study by the Center for Transnational Crime and Corruption at George Mason University, reveals how Russian money is laundered in the purchase and sale of real estate in the United States.
In recent decades, Sunny Isles, Florida; Cleveland, Manhattan and other large American cities, have become the favorite destination for real estate investment of the Russian oligarchy.
Since the dissolution of the Soviet Union, Russian money has entered the United States. And details of this became known, after 1999 Richard Palmer, Head of the CIA embassy in Moscow, revealed to Congress that in the last days of the Soviet Union, officials of the KGB and the Russian kleptocracy transferred billions of dollars to private accounts in the United States.
Now, that the purchase and sale of real estate becomes a way to continue moving money coming from Russia is quite feasible for the experts, since in the disclosure of information from the “field of private capital and luxury goods, there are significant gaps”. They assure experts on the subject.
In the real estate sector in the United States, there are not enough regulations to force real estate agents to inform about their buyers. This is confirmed by Louise Shelley of George Mason University.
Likewise, the work presented by NBC News indicates that in the book “American Kleptocracy: how the United States created the largest money laundering scheme in history”, by journalist Casey Michel, who assures that the possibility of seizing goods and luxuries from tycoons is “misunderstood”. The truth is that it is a real “black box”.
According to the journalist, an expert in investigations about kleptocracy and financial secrecy, the United States provided all the tools of anonymity for that oligarchy. And at the moment, it seems that President Joe Biden has no immediate executive action to address this problem .
Therefore, Michel considers that in addition to the identification and persecution of sanctioned Russian officials and oligarchs, the “anonymity in real estate, private equity, hedge funds and the art market” giving way to kleptocracy must be ended especially in the United States and the United Kingdom.
Excellent.
But: This absolutely has to be paired with ending anonymity in real estate, private equity, hedge funds, and the art market.
And we have to end the role of Western—especially US and UK—lawyers in enabling kleptocracy. https://t.co/o0QC5Egc9f
– Casey Michel 🇰🇿 (@cjcmichel) February 27, 2022
In the last five years, more than $2 have been laundered, 300 million dollars through real estate in the United States, and millions more through other alternative assets, such as art, jewelry and yachts, as revealed by a report of Global Financial Integrity.
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