With the passage of the USA Patriot Act of 2001, which required that financial institutions create anti-money-laundering compliance programs, anyone purchasing property must be checked against a list of names of known and suspected terrorists. The list has been around since before the September 11 attacks, but increasingly the ritual closing ceremony has involved writing yet another check to the title company that runs the homebuyer’s name against that list.
What’s behind it? The Treasury Department’s Office of Foreign Assets Control maintains the “specifically designated nationals” (SDN) list of people blocked from participating in “any transaction or dealing … in property or interests” within the United States. These people have been identified “to have committed, or to pose a significant risk of committing, acts of terrorism,” according to White House Executive Order 13224, which was issued Sept. 24, 2001. Although the blocked-persons list has been around in some form for about a decade, under the order private individuals (be they jewelers, pawnbrokers or suburban families) buying or selling property are now considered “financial institutions” by the government. And the responsibility has fallen to the title companies to check all parties involved in a transaction against the list. “The SDN list has been around for years. Obviously, since 9/11 the use of charities and banks and different organizations for terrorists to move money have brought it more to light in recent days,” says Molly Millerwise, a Treasury spokesperson, explaining why homebuyers in the heartland are considered financial institutions under the jurisdiction of the Office of Foreign Asset Control. Terrorists, she says, use property to launder money.
