On April 9, the two real estate regulators – the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and the Real Estate Council of British Columbia (RECBC) – announced that they have entered a memorandum of understanding (MOU) in an attempt to prevent money laundering in the real estate industry in BC.
POSSIBLE BENEFITS
The MOU allows them to share compliance-related information – which will help facilitate legal actions against money laundering, particularly in the real estate sector, in accordance with the Proceeds of Crime (Money Laundering) Act and the Terrorist Financing Act.
Moreover, this information-sharing agreement should help increase awareness of illegal financial activities, encouraging compliance by strengthening law enforcement in the property development sector in BC and nationwide.
RESPONSIBILITIES OF RECBC
RECBC is a state agency responsible for setting conduct standards for the real estate industry. It is also responsible for enforcing licensee requirements as well as entry qualifications of individuals and brokerages involved in the sales, rental and management of immovable properties in compliance with the Real Estate Services Act.
RECBC commented on the new development: “With this agreement, RECBC can participate in strengthening the compliance of BC real estate brokerages, to increase reporting of suspicious transactions and reduce the risk of criminal activity in BC’s real estate market. This coordination will help ensure that BC’s real estate industry is no longer attractive to money launderers. The MOU will also increase opportunities for RECBC and FINTRAC to work together to monitor trends and emerging risks, and develop education and information to support BC’s real estate industry to do its part in fighting money laundering.”
RECBC Chair Elain Duvall added, “RECBC is proud to become the first real estate regulator in Canada to partner with FINTRAC. By working together we can play an important role in the efforts to stop money laundering and terrorist financing, helping to ensure that British Columbians can have confidence in the real estate services they receive.”
FINTRAC’S BACKGROUNDS
FINTRAC is a financial intelligence unit which monitors monetary transactions in order to identify and prevent illegal financial activities such as money laundering or any other forms of financing of terrorism. These illicit activities can possibly take place in various forms, ranging from isolated acts to activities mutually planned by organizations.
“We are pleased to work more closely with the Real Estate Council of British Columbia to ensure compliance in the real estate sector. Together, we will strengthen oversight in the sector, reduce the burden on real estate businesses and help to protect Canadians and Canada’s economy,” said Nada Semaan, Director and Chief Executive Officer of FINTRAC.
FINTRACT plays a very important role in helping Canadian authorities deal with terrorist financing. According to a report by the Canada Revenue Agency, FINTRAC provided 2,466 disclosures of illegal financial activities to the Royal Canadian Mounted Police (RCMP) and other security agencies in Canada last year. The financial intelligence unit assisted them in investigating money laundering and other financial crimes.
Out of the 2,466 disclosures, 1,821 disclosures were related to money laundering, 447 disclosures pertained to the financing of terrorism and risks to the security of the country, and 198 disclosures revealed a combination of money laundering, the financing of terrorism and risks to the security of the country.