From the Panama Papers to March 2026: How the RRE Rule Happened

In February 2015, The New York Times published "Towers of Secrecy," a five-part investigation into anonymous shell company purchases in Manhattan's luxury condo market. The series pierced the secrecy of over 200 shell companies buying high-end apartments, finding connections to sanctioned individuals, accused criminals, and corrupt foreign officials. The buyers used LLCs and trusts specifically to keep their names out of public records.

The investigation created immediate political and public pressure. Congress held hearings. Anti-corruption organizations demanded action. FinCEN, which had long been aware of the vulnerability, now had the political environment to act.

FinCEN responded in January 2016 with the first Geographic Targeting Orders (GTOs) for real estate. These were temporary rules, initially covering only Manhattan and Miami-Dade County, requiring title insurance companies to identify the real human beings behind shell companies making all-cash residential purchases above certain thresholds.

The GTOs were essentially a pilot program. FinCEN was testing whether the reporting requirement would actually catch bad actors, and whether the real estate industry could operationally handle the compliance burden. The answers to both questions turned out to be yes.

Over the next eight years, FinCEN steadily expanded the GTOs to cover major metropolitan areas in 14 states plus Washington, D.C., including California, Texas, Florida, New York, Illinois, Massachusetts, Nevada, Hawaii, and others. The purchase threshold dropped to $300,000 for most areas ($50,000 in Baltimore).

The data was damning. Thirty percent of covered transactions involved beneficial owners or purchasers who had previously been flagged in suspicious activity reports. The GTOs were not catching edge cases. They were catching a massive, systemic pattern of suspicious money flowing into American real estate through anonymous structures. Meanwhile, the Panama Papers (2016) added global pressure by exposing how shell companies worldwide facilitate money laundering, with the U.S. itself identified as a major secrecy jurisdiction.

On February 7, 2024, FinCEN published a Notice of Proposed Rulemaking to make real estate reporting permanent and nationwide. After a public comment period, the final rule was published in the Federal Register on August 28, 2024.

The permanent rule is broader than the GTOs in several important ways. It applies nationwide, not just in targeted metro areas. It uses a 7-tier cascade to assign filing responsibility to settlement professionals generally, not just title insurance companies. And it requires reporting on transfers to trusts in addition to legal entities. The rule number is 31 C.F.R. Part 1031.

The original effective date was December 1, 2025. On September 30, 2025, FinCEN issued a 90-day exemptive relief, pushing the effective date to March 1, 2026. The delay was granted to give the industry more preparation time, not because the rule was being reconsidered.

March 1, 2026 is the current effective date. Reportable transfers closing on or after that date require filing. No further delays are expected. If your office handles residential closings and you do not have a reporting process in place, the preparation window is closing.

Enforcement will not be instant, but it will come. FinCEN will likely focus first on pattern violations, meaning firms with many reportable transactions and zero filings, rather than isolated mistakes from small offices acting in good faith. But "we didn't know" stops being a defense once the rule is in effect and widely publicized.

The GTOs may continue alongside the permanent rule during a transition period. Expect FinCEN to release additional guidance, updated FAQs, and potentially supplemental instructions as the industry encounters real-world edge cases. The rule is the starting point, not the final word.