A bipartisan group of U.S. senators reintroduced sanctions legislation this week targeting Russia that also includes a provision tackling money laundering in all-cash purchases of real estate.

The bill seeks to impose sanctions on Russia, targeting the country’s banks, energy projects, cyber sector and sovereign debt, for Moscow’s interference in democratic processes and aggression against Ukraine. The Kremlin dismissed the legislation, describing it as a racketeering effort.

One aspect of the bill focuses on residential real-estate purchases made in cash by limited liability corporations, also known as shell companies. Real-estate transactions are generally public after they are completed, but there are ways that buyers can introduce secrecy to avoid detection.

Certain transactions currently require title insurance companies to report the names of beneficial owners to the U.S. Treasury Department. The policy, which falls under a program called a Geographic Targeting Order, applies to all-cash purchases of residential real estate above $300,000 made by shell companies in 12 U.S. metropolitan areas.

The geographic targeting program began in January 2016 in Manhattan and Miami. It is subject to renewal every six months, and it has expanded steadily in the years since it was introduced.

The new bill seeks to take the effort nationwide, and make it permanent.

Purchases of property in cash by shell companies are legal, but they are attractive to money launderers because they can sometimes be made anonymously without explaining the origin of the funds used. The secrecy, as well as the market’s general stability, makes real estate an attractive asset to kleptocrats, human traffickers and other criminals, who exploit holes in the U.S. financial system to legitimize their illicit funds, anticorruption groups say.

“U.S. real estate is a great place to stash dirty money,” said Clark Gascoigne, deputy director of the Financial Accountability and Corporate Transparency Coalition, a consortium of groups that push policies to combat corruption.

The legislation announced Wednesday is tougher on Moscow than a bill proposed last summer that didn’t make it through the last Congress. That bill also included the real-estate provision. It isn’t clear whether it will pass this time around.

The bill also would have to pass the Democratic-controlled House before reaching President Trump’s desk. The senators proposing the bill, Robert Menendez (D., N.J.) and Lindsey Graham (R., S.C.), didn’t respond to requests for comment.

Steve Gottheim, senior counsel with the American Land Title Association, which represents the title companies required to furnish the data underlying the program, said the industry wants to know what law enforcement has learned from the data it has gathered.

“We see the [legislation] as a way to help us continue the conversation of ‘Let’s give law enforcement the tools they need to prevent money laundering in real estate,’” he said.

—Josh Barbanel contributed to this article.

Write to Samuel Rubenfeld at samuel.rubenfeld@wsj.com