Real estate lawyers fret about Treasury reporting requirement: Professional Ethics Committee to research the issue.

Real estate attorneys are concerned that the latest U.S. Treasury Department crackdown on money laundering is putting them between a rock and a hard place.

The problem centers on the Treasury Department's Financial Crimes Enforcement Network, better known as "FinCEN," and its latest version of a Geographic Targeting Order, or "GTO."

The updated order requires title insurance companies or their "agents" to identify the principles behind high-end, cash real estate purchases in Miami-Dade, Broward, and Palm Beach counties.

Failure to report within 30 days of a closing could result in a $500,000 fine or up to 10 years in prison.

Real estate attorneys often act as title agents and are subject to the order. At least one legal expert is warning that a new secrecy provision could conflict with an attorney's ethical obligation to inform clients and obtain their consent.

The issue was raised at the Bar's Professional Ethics Committee at the Annual Convention in Orlando and the committee directed staff to do more research.

Florida Bar Ethics Counsel Elizabeth Tarbert declined to say whether or how many members have contacted the Bar for guidance. So far, no attorneys have been disciplined for issues arising from GTO reporting requirements, according to the Bar's Division of Lawyer Regulation.

FinCEN spokeswoman Candice Basso confirmed that the GTO covering Florida, which originated in 2016, was extended March 21 and will expire September 16 of this year.

"The GTOs issued to date have provided FinCEN and law enforcement with important information about money laundering vulnerabilities in the real estate sector," Basso wrote in an email. "These GTOs are a valuable tool, and they were extended."

The GTO makes no direct reference to a confidentiality or secrecy requirement and Basso declined to be interviewed or address the secrecy question.

"We have no comment about further development with our GTOs," Basso wrote.

One potential source of the concern is a document FinCEN issued early last month titled, "Answers to Frequently Asked Bank Secrecy Act (BSA) Questions."

Question 9, under a heading dealing with Suspicious Activity Reports, reads, "Federal law (31 U.S.C. 5318(g)(2)) prohibits the notification to any person that is involved in the activity being reported on a SAR that the activity has been reported. This prohibition extends to disclosures that could indirectly result in the notification to the subject of a SAR that a SAR has been filed...