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Perspective
VC – The World’s 50 Most Valuable Sports Teams – Jeff Desjardins 8/24
Worthy Insights / Opinion Pieces / Advice
Real Estate
The Real Deal – Treasury Department finally adds teeth to LLC disclosure rule – E.B. Solomont 8/22
- “The Treasury Department closed a gaping loophole in its effort to crack down on money laundering in real estate on Tuesday, extending its LLC disclosure rules to deals that involve wire transfers.”
- “In a revised geographic targeting order (GTO), Treasury officials said wire transfers would now be subject to regulations that require title insurance companies to disclose the identity of buyers who purchase luxury real estate through LLCs.”
- “The revised GTO — which covers deals in New York City, Florida, California, and Texas — was also extended to transactions in Honolulu, Hawaii.”
- “On Tuesday, FinCEN also published an eight-page advisory for financial institutions, alerting them to money-laundering risks associated with real estate. ‘Many real estate transactions involve high-value assets, opaque entities, and processes that can limit transparency because of their complexity and diversity,’ said the advisory, which cited the 1MDB fund scandal, in which embezzled funds out of Malaysia paid for luxury real estate in Beverly Hills and New York, including the Park Lane Hotel.”
- “’In addition, the real estate market can be an attractive vehicle for laundering illicit gains because of the manner in which it appreciates in value, ‘cleans’ large sums of money in a single transaction, and shields ill-gotten gains from market instability and exchange-rate fluctuations,’ the advisory said.”
- “The Treasury Department initially launched the LLC disclosure rule in March 2016 in an attempt to crack down on the flow of illicit funds. Since then, FinCEN has renewed the regulation twice, most recently in February. Since July 2016, the rule has covered deals in all five boroughs of New York City; Miami, Broward and Palm Beach counties in Florida; Los Angeles; San Francisco; San Diego; and San Antonio, Texas. The rule applies to cash deals above $3 million in Manhattan and $1.5 million in the other boroughs.”
China
- In late 2015 China updated its Food Safety Law. “The new version removed a clause in the previous law that said victims must prove personal injury or loss to be eligible for compensation. The change has spawned a cottage industry of professional complainers who’ve developed sophisticated operations to challenge food manufacturers and retailers for compensation.”
- “A Beijing court said 80 percent of the food safety-related cases in 2015 were filed by individuals who specialize in finding flaws. ‘They are the No. 1 problem supermarkets in China are facing now,’ says Chu Dong, vice chairman of the China Chainstore & Franchise Association, an industry group. ‘They are harming not just the retail industry but placing a heavy burden on regulatory and judicial authorities in China and betraying the spirit of the law.’”
- “Professional complainers are a mainstay on the mainland because the nation’s laws guarantee aggrieved buyers a unique degree of protection and compensation. A different statute granting compensation of three times the purchase price to those who buy counterfeit or damaged goods has given rise to professional ‘fraudbusters’ who scour store shelves on the lookout for fakes. Their ranks swelled tenfold after the more generous food safety law came into effect, says Shandong native Wang Hai, who prefers to be called a ‘food safety informer.’ Pending cases he’s filed include complaints about fake alcohol and beef from steroid-injected cattle smuggled from overseas.”
- “On the plus side, these folks help police the system. The negative is that there is also a good deal of gaming the system.”
- “Wal-Mart, one of the leading Western supermarket chains in China, received almost 4,000 food safety complaints last year, compared with about 700 the year before the revised law took effect, according to a person familiar with the matter who asked not to be identified because the information hasn’t been disclosed publicly.”
Europe
NYT – Wine War in Southern France Has Streets Running Red – Liz Alderman 8/25
- Wine makers in the Languedoc region in France are taking matters into their own hands to keep Spanish wines from undercutting their pricing and production.