II 

117TH CONGRESS 

2D SESSION S. 4075 

To prevent money laundering, the financing of terrorism, or other forms 

of illicit finance through United States real estate and vehicle transactions, including by Russian oligarchs, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 7, 2022 

Mr. WHITEHOUSE (for himself, Mr. CASSIDY, Ms. WARREN, and Mr. WICKER) 

introduced the following bill; which was read twice and referred to the 

Committee on Banking, Housing, and Urban Affairs 

A BILL 

To prevent money laundering, the financing of terrorism, 

or other forms of illicit finance through United States 

real estate and vehicle transactions, including by Russian 

oligarchs, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Kleptocrat Liability 

5 for Excessive Property Transactions and Ownership Act’’ 

6 or the ‘‘KLEPTO Act’’. 

7 SEC. 2. DEFINITIONS. 

8 In this Act: 


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1 (1) ADMINISTRATOR.—The term ‘‘Adminis2 trator’’ means the Administrator of the Federal 

3 Aviation Administration. 

4 (2) BANK SECRECY ACT.—The term ‘‘Bank Se5 crecy Act’’ means— 

6 (A) section 21 of the Federal Deposit In7 surance Act (12 U.S.C. 1829b); 

8 (B) chapter 2 of title I of Public Law 91– 

9 508 (12 U.S.C. 1951 et seq.); and 

10 (C) subchapter II of chapter 53 of title 31, 

11 United States Code. 

12 (3) BENEFICIAL OWNER.—The term ‘‘beneficial 

13 owner’’ has the meaning given the term in section 

14 5336(a) of title 31, United States Code. 

15 (4) COVERED ENTITY.—The term ‘‘covered en16 tity’’ means a non-natural person, association, or ar17 rangement, including any trust, partnership, founda18 tion, corporation, limited liability company, or other 

19 public or private entity. 

20 (5) DIRECTOR.—The term ‘‘Director’’ means 

21 the Director of FinCEN. 

22 (6) FINCEN.—The term ‘‘FinCEN’’ means the 

23 Financial Crimes Enforcement Network of the De24 partment of the Treasury. 


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1 (7) FOREIGN PERSON.—The term ‘‘foreign per2 son’’ means an individual who is not— 

3 (A) a United States person; or 

4 (B) an alien lawfully admitted for perma5 nent residence into the United States. 

6 (8) REAL ESTATE PROFESSIONAL.—The term 

7 ‘‘real estate professional’’— 

8 (A) means a person described in section 

9 5312(a)(2)(U) of title 31, United States Code; 

10 and 

11 (B) may include a loan broker, lender, title 

12 insurance company, title insurance agent, es13 crow agent, developer, investment company, in14 vestment adviser, real estate investment trust, 

15 real estate agent, attorney, law firm, or other 

16 financial, real estate, or legal professional. 

17 (9) SECRETARY.—The term ‘‘Secretary’’ means 

18 the Secretary of the Treasury. 

19 (10) STATE.—The term ‘‘State’’ means any 

20 State of the United States, the District of Columbia, 

21 the Commonwealth of Puerto Rico, the Common22 wealth of the Northern Mariana Islands, American 

23 Samoa, Guam, the United States Virgin Islands, and 

24 any other commonwealth, territory, or possession of 

25 the United States. 


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1 (11) UNITED STATES PERSON.—The term 

2 ‘‘United States person’’ means a natural person who 

3 is a citizen of the United States or who owes perma4 nent allegiance to the United States. 

5 SEC. 3. ANTI-MONEY LAUNDERING SAFEGUARDS FOR REAL 

6 ESTATE TRANSACTIONS. 

7 (a) RULEMAKING.—Not later than 1 year after the 

8 date of enactment of this Act, in conjunction with the au9 thority under section 5318(a)(2) of title 31, United States 

10 Code, the Director shall issue a final rule to guard against 

11 money laundering, the financing of terrorism, or other 

12 forms of illicit finance through commercial and residential 

13 real estate transactions under the Bank Secrecy Act, in14 cluding by— 

15 (1) requiring real estate professionals to collect 

16 and report to the Director beneficial ownership in17 formation for each commercial and residential real 

18 estate transaction involving real estate located in a 

19 State and involving a buyer or seller that is a cov20 ered entity, regardless of the transfer price; 

21 (2) in collecting and reporting the information 

22 under paragraph (1), defining commercial or resi23 dential real estate transactions to include direct and 

24 indirect transfers of real estate, including through 

25 the direct or indirect transfer of the ownership or 


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1 control of a covered entity that directly or indirectly 

2 owns or controls the real estate that is the subject 

3 of the transaction; 

4 (3) establishing a system to determine which 

5 real estate professionals must collect and report the 

6 information under paragraph (1); 

7 (4) requiring the Director to validate the infor8 mation reported under paragraph (1); 

9 (5) requiring real estate professionals reporting 

10 information under paragraph (1) to take reasonable 

11 measures to verify the accuracy of the information 

12 reported under this subsection; and 

13 (6) using the definition of ‘‘beneficial owner’’ in 

14 section 5336(a) of title 31, United States Code. 

15 (b) REPORT.—Not later than 360 days after the date 

16 of enactment of this Act, the Secretary shall submit to 

17 the appropriate congressional committees a report on how 

18 digital ledger technology can be implemented to create a 

19 tamper-proof permanent record of direct and indirect 

20 transfers of real estate, including through direct or indi21 rect transfer of ownership or control of a covered entity 

22 that directly or indirectly owns or controls the real estate 

23 that is subject to the transaction. 

24 (c) ANTI-MONEY LAUNDERING REQUIREMENTS FOR

25 REAL ESTATE PROFESSIONALS.—In the rule required 


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1 under subsection (a), the Director shall require the 1 or 

2 more real estate professionals determined under sub3 section (a)(3) to— 

4 (1) report suspicious transactions under section 

5 5318(g)(1) of title 31, United States Code; 

6 (2) establish anti-money laundering programs 

7 under section 5318(h) of title 31, United States 

8 Code; 

9 (3) establish customer due diligence policies, 

10 procedures, and controls under section 5318(i) of 

11 title 31, United States Code; and 

12 (4) establish written procedures reasonably de13 signed to identify and verify under section 5318(l) of 

14 title 31, United States Code, the identity of cus15 tomers, including the beneficial owners of any cov16 ered entity, involved in commercial and residential 

17 real estate transactions. 

18 SEC. 4. REAL ESTATE PILOT PROGRAM. 

19 (a) IN GENERAL.—Not later than 2 years after the 

20 date of enactment of this Act, the Secretary shall pilot 

21 a comprehensive e-governance framework for the trans22 parency of commercial and residential real estate sales and 

23 purchases in the United States, which shall— 


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1 (1) designate a pilot locale for the implementa2 tion of the pilot program after obtaining the consent 

3 of the relevant State; and 

4 (2) design a cloud-based distributed ledger for 

5 real estate in the pilot locale, which shall— 

6 (A) consist of a cloud-based network for 

7 digital governance that— 

8 (i) provides real-time integrated infor9 mation to users, which may include indi10 viduals, entities, and governments; and 

11 (ii) allows users to conduct economic 

12 and other activity through an internet 

13 website or mobile application; 

14 (B) be designed to minimize corruption 

15 and maximize transparency for persons engaged 

16 in real estate transactions, investment, assist17 ance, and any other activities under section 3; 

18 and 

19 (C) include the integration with other sys20 tems required under subsection (b) and the ca21 pabilities described in subsection (c). 

22 (b) INTEGRATION WITH OTHER SYSTEMS.—The Sec23 retary shall design the framework established under sub24 section (a) to be capable of integration with— 


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1 (1) the Bank Secretary Act databases main2 tained by FinCEN, including— 

3 (A) the beneficial ownership information 

4 collected by FinCEN under Geographic Tar5 geting Orders; 

6 (B) the directory of beneficial ownership 

7 information collected under section 5336 of title 

8 31, United States Code; and 

9 (C) any other Bank Secrecy Act database 

10 as determined by the Director; 

11 (2) the sanctions lists maintained by the De12 partment of the Treasury’s Office of Foreign Assets 

13 Control; 

14 (3) the information exchanging systems of the 

15 Egmont Group of Financial Intelligence Units; 

16 (4) the digital business registry databases of 

17 other countries; 

18 (5) the real estate registries of States and polit19 ical subdivisions of States; 

20 (6) the beneficial ownership information col21 lected under section 3(a); and 

22 (7) any other system as determined by the Sec23 retary. 

24 (c) OTHER REQUIREMENTS.— 


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1 (1) OPEN SOURCE.—The Secretary shall ensure 

2 that the code used for the framework established 

3 under subsection (a) is open source and capable of 

4 being audited. 

5 (2) MULTI-LINGUAL FUNCTIONALITY.—The 

6 Secretary shall ensure that the framework estab7 lished under subsection (a) is functional in— 

8 (A) English, Spanish, French, and Por9 tuguese; and 

10 (B) any other language as determined by 

11 the Secretary. 

12 (3) STANDARDS.—The Secretary shall include 

13 in the framework established under subsection (a) 

14 standards for entities seeking to create their own e15 governance systems. 

16 SEC. 5. CERTIFICATION OF AIRCRAFT REGISTRATION. 

17 (a) IN GENERAL.—Before approving a certificate of 

18 registration issued under section 44103 of title 49, United 

19 States Code, with a covered entity, the Administrator of 

20 the Federal Aviation Administration shall require the cov21 ered entity to— 

22 (1) identify each beneficial owner of the covered 

23 entity by— 

24 (A) name; 


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1 (B) current residential or business street 

2 address; 

3 (C) a unique identifying number from a 

4 nonexpired passport issued by the United 

5 States or a nonexpired drivers license issued by 

6 a State or if neither is available, a legible and 

7 credible copy of the pages of a nonexpired pass8 port issued by the government of a foreign 

9 country bearing a photograph, date of birth, 

10 and unique identifying information for the per11 son; 

12 (D) nationality; and 

13 (E) the make, model, and serial number of 

14 the aircraft to be registered; 

15 (2) in the case of a covered entity that is owned 

16 or controlled by more than 1 entity— 

17 (A) identify how each entity relates to 

18 every other entity, including— 

19 (i) the extent to which each entity 

20 holds an ownership interest in or exercises 

21 control over another entity; and 

22 (ii) the relationship of each such enti23 ty with the beneficial owners who are nat24 ural persons; and 


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1 (B) identify each trust grantor, trustee, 

2 trust protector, and beneficiary of the covered 

3 entity that is a foreign person; 

4 (3) in the case of a trust or association, identify 

5 the chain of control within the trust or association, 

6 including with respect to the beneficial owners, any 

7 trust grantor, trustee, trust protector, and bene8 ficiary, and any association director, officer, or man9 ager; and 

10 (4) disclose to the Administrator any beneficial 

11 owner of the covered entity that is a foreign person. 

12 (b) TIMING.— 

13 (1) IN GENERAL.—The Administrator shall re14 quire a covered entity to provide the information de15 scribed in subsection (a) when submitting an appli16 cation for aircraft certification. 

17 (2) EXISTING REGISTRANTS.—For a covered 

18 entity that submitted an application for aircraft cer19 tification prior to enactment of this Act, the Admin20 istrator shall require the covered entity to provide 

21 the information described in subsection (a) in a new 

22 submission to the Administrator not later than 180 

23 days after the date of enactment of this Act. 

24 (3) UPDATES.—The Administrator shall require 

25 a covered entity to update a submission of the inforVerDate Sep 11 2014 02:58 Apr 12, 2022 Jkt 029200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S4075.IS S4075

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1 mation described in subsection (a) not later than 60 

2 days after the date of any change in— 

3 (A) the list of beneficial owners of the cov4 ered entity; or 

5 (B) the information required to be pro6 vided relating to each such beneficial owner. 

7 SEC. 6. ANTI-MONEY LAUNDERING REQUIREMENTS FOR 

8 BUSINESSES ENGAGED IN VEHICLE SALES. 

9 Not later than 1 year after the date of enactment 

10 of this Act, in conjunction with the authority under section 

11 5318(a)(2) of title 31, United States Code, the Secretary 

12 shall issue a final rule that requires all businesses de13 scribed in section 5312(a)(2)(T) of title 31, United States 

14 Code, to comply with the due diligence and reporting re15 quirements applicable to financial institutions under sub16 chapter II of chapter 53 of title 31, United States Code, 

17 including— 

18 (1) reporting suspicious transactions under sec19 tion 5318(g)(1) of title 31, United States Code; 

20 (2) establishing anti-money laundering pro21 grams under section 5318(h) of title 31, United 

22 States Code; 

23 (3) establishing customer due diligence policies, 

24 procedures, and controls under section 5318(i) of 

25 title 31, United States Code; and 


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1 (4) establishing written procedures reasonably 

2 designed to identify and verify under section 5318(l) 

3 of title 31, United States Code, the identity of cus4 tomers, including the beneficial owners of any cov5 ered entity, involved in a vehicle sale. 

6 SEC. 7. BENEFICIAL OWNERSHIP DIRECTORY. 

7 If an entity formed under the law of a foreign country 

8 takes ownership or control of real estate located within 

9 the United States through a real estate transaction carried 

10 out by a real estate professional subject to this Act, and 

11 if that entity would have qualified as a reporting company 

12 under section 5336(a)(11)(A)(ii) of title 31, United States 

13 Code, except that a State exempted the entity from a State 

14 registration requirement because the only business of the 

15 entity within the State is to purchase or hold real estate 

16 within a State, that entity shall nevertheless be deemed 

17 a reporting company under section 5336(a)(11)(A)(ii) of 

18 such title and shall file the reports required under section 

19 5336(b) of such title. 

20 SEC. 8. APPLICABILITY. 

21 This Act and the rules issued under this Act shall 

22 apply to beneficial owners of covered entities regardless 

23 of whether the covered entity is a reporting company, as 

24 defined in section 5336(a) of title 31, United States Code. 


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1 SEC. 9. PROGRAM COST ESTIMATION. 

2 Not later than 120 days after the date of enactment 

3 of this Act, the Secretary and the Administrator shall each 

4 submit to Congress a cost estimate for implementing this 

5 Act. 

6 SEC. 10. EFFECTIVE DATE. 

7 The effective date of each rule issued under this Act 

8 shall be 1 year after the date on which the final rule is 

9 issued. 

Æ 


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