United States: Updates on the FinCEN Renewed and Expanded Real Estate Geographic Targeting Orders

Tax Notes and Developments December 2022

In brief

In its press release published on 26 October 2022, The Financial Crimes and Enforcement Network (“FinCEN”) announced that its Acting Director renewed and expanded its Geographic Targeting Orders (GTOs) beginning on 27 October 2022 and ending on 24 April 2023 (with certain exceptions). 


Under the GTOs, US title insurance companies are required to collect and report information about the persons involved in certain residential real estate transactions. The novelty is that the geographic coverage of the GTOs now also includes the counties encompassing the Texas cities of Houston and Laredo, which were not previously on the list. The threshold relating to the real estate purchase price did not change from the previous period and it remains USD 300,000 for each listed county, except for the City and County of Baltimore, where the applicable threshold is USD 50,000.


Summary of the FinCEN Renewed and Expanded Real Estate Geographic Targeting Orders  

Covered Business, Covered Transaction. Under the Geographic Targeting Order, the US title insurance companies are obliged to collect and report information about the persons involved in certain “Covered Transactions.” A “Covered Transaction” is defined as a transaction in which: (i) residential real property is purchased by a legal entity; (ii) the purchase price of the residential real property is in the amount of USD 50,000 or more (in the City or County of Baltimore in Maryland), or in the amount of USD 300,000 or more (in Boston; Chicago; Dallas-Fort Worth; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; Seattle, the District of Columbia, Northern Virginia; the County of Fairfield, Connecticut, and the Hawaiian islands of Honolulu, Maui, Hawaii, and Kauai); (iii) purchase is made without a bank loan or other similar form of external financing; and (iv) the purchase is made, at least in part, using currency or a cashier’s check, a certified check, a traveler’s check, a personal check, a business check, a money order in any form, a funds transfer, or virtual currency.  

Scope of Reporting Obligation. The US title insurance companies are obliged to report the Covered Transactions by filing a FinCEN Currency Transaction Report, within 30 days of the closing of the Covered Transaction, through the Bank Secrecy Act (BSA) E-Filing system. Information that needs to be reported includes the identity of the individual primarily responsible for representing the legal entity, information about the identity of the legal entity, and information about the identity of the beneficial owners. The US title insurance company must obtain and record a copy the driver's license, passport, or other similar identifying documentation. Further, the address of real property, the date of closing and the total purchase price of the real property, together with the method of payment, are the essential elements that need to be reported.  

Definition of Beneficial Owner and Legal Entity. Under the Geographic Targeting Order (GTO), the Beneficial Owner means an individual who, directly or indirectly, owns 25% or more of the equity interests of the Legal Entity purchasing real property in the Covered Transaction. The Legal Entity means a corporation, limited liability company, partnership or other similar business entity, whether formed under the laws of a state, or of the United States, or a foreign jurisdiction, other than a business whose common stock or analogous equity interests are listed on a securities exchange regulated by the Securities Exchange Commission (SEC) or a self-regulatory organization registered with the SEC, or an entity solely owned by such a business.  

Definition of Residential Real Property. Although the GTO does not stipulate the definition of residential real property, the Frequently Asked Questions document clarifies that the definition means real property (including individual units of condominiums and cooperatives) designed principally for the occupancy of from one to four families.  

Exceptions to Reporting Obligations. The US title insurance companies are obliged to take reasonable steps to determine whether any part of the purchase price was made using the specified method of payment. There are no de minimis exceptions regarding the methods of payment.  

Reporting Deadline. The US title insurance companies are obliged to file a FinCEN Currency Transaction Report within 30 days of the closing of the transaction.   

Retention of Records. The US title insurance companies are obliged to retain all records relating to compliance with the GTO for a period of five years from the last day that the GTO is effective (including any renewals of the GTO), and make those records available to FinCEN upon request.  

Potential Penalties for Noncompliance. The US title insurance companies, and any of their officers, directors, employees, and agents, may be liable for civil or criminal penalties for violating any of the terms of the GTO. 



FinCEN renewed its GTOs requiring US title insurance companies to identify the individuals behind shell companies used in various non-financed residential real estate purchases. Reporting applies to properties with a purchase price of USD 300,000 or more in certain counties enlisted in the GTO. The transaction is reportable if the purchase is made by a legal entity, without a bank loan or similar external financing, and using (at least in part) currency or a cashier’s check, a certified check, a traveler’s check, a personal check, a business check, a money order, a funds transfer, or virtual currency. The reporting needs to be done within 30 days of closing by the US title insurance company. 


Copyright © 2023 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.