A bipartisan group of senators released a bill Friday meant to track down real estate, yachts, private jets and other luxuries owned by foreign oligarchs.
The bill, called the Kleptocrat Liability for Excessive Property Transactions and Ownership (Klepto) Act, would impose far stricter rules for how much information must be disclosed about who is purchasing a wide range of assets often used for money laundering.
Sens. Elizabeth Warren (D-Mass.), Sheldon Whitehouse (D-R.I.), Roger Wicker (R-Miss.) and Bill Cassidy (R-La.) introduced the bill Friday as a way to ramp up pressure on Russian President Vladimir Putin.
“Right now in this country, sanctioned Russian oligarchs, criminals and terrorists are able to stash their money in the shadows by buying and selling mansions, yachts and private jets,” Warren said.
“It’s time we close these loopholes and give U.S. officials the tools they need to track down the hidden wealth of these corrupt actors and fully enforce sanctions.”
Putin is believed to have amassed billions of dollars in wealth during his nearly two decades as Russia’s leader, held largely through a network of shell companies and luxury assets administered by wealthy Russian business leaders.
While more than a dozen Russian oligarchs and businesses are under U.S. sanctions, much of their U.S.-based assets may be hidden from the view of law enforcement through anonymous shell companies.
“Putin and his cronies move millions of dollars to buy yachts and fund Putin’s war machine while the Russian people suffer. It’s time the U.S. takes action and stops oligarchs from abusing our financial system for their own benefit,” Cassidy said.
The legislation forces the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to require parties involved in real estate sales to disclose the “beneficial owner” of a company involved in the transaction. That means an individual who wants to purchase a home through a company must identify themselves as the person who controls the firm.
The Federal Aviation Administration would also be required to collect beneficial ownership information for all aircraft registered in the U.S. FinCEN must additionally expand current anti-money laundering reporting rules to the real estate sector, along with businesses that sell boats, planes and automobiles.
“I am pleased to co-sponsor the bipartisan Klepto Act with my colleagues,” Wicker said.
“Russian oligarchs and their Western enablers are fueling the horrific destruction and killing in Ukraine. We need to do everything in our power to seize the luxury assets they have purchased with blood money. Ukraine must win this war and Putin’s aggression and war crimes must be severely punished.”
To keep track of the beneficial ownership information, the bill orders Treasury to try using a digital ledger system — also known as a blockchain, the foundation of cryptocurrencies.
“Putin and his corrupt oligarchs pillage their own people, then use all manner of financial schemes to stash that stolen money in high-end real estate, mega-yachts and private jets,” Whitehouse said.
“Step one in neutralizing those oligarchs and their schemes is pinpointing their crooked assets. This bipartisan legislation will shine the light of transparency on these shady transactions and help to crack down on kleptocracy and international corruption.”