ORGANIZATIONS representing key professions in the BC real estate sector on Monday submitted joint recommendations to the provincial and federal governments to help protect BC’s housing market from money laundering.
The participating organizations include the British Columbia Real Estate Association, the Appraisal Institute of Canada – BC Association, BC Notaries Association, Canadian Mortgage Brokers Association – British Columbia, and the Real Estate Board of Greater Vancouver.
In their submission, these organizations also commit to shared best practices to help keep the proceeds of organized crime out of the economy. Their efforts focus on helping protect the real estate market from unscrupulous operators and ensuring the public can have full confidence in BC’s real estate market. All of the organizations have fully supported and participated in the government’s investigations into money laundering and real estate.
These organizations say a real estate transaction involves multiple professionals. It will take a coordinated effort by all involved, working in collaboration with government, to stop money laundering. The joint recommendations and best practices submitted by them reflect their commitment to the professionals and consumers they serve.
As a group of real estate organizations representing industry professionals, we are committed to a transparent real estate market and to ensuring that the public can continue to have full confidence in the real estate industry. Illegal funds have no place in BC’s real estate market. We are supportive of the government’s investigations into money laundering and real estate, having actively participated in Peter German’s review and the Expert Panel on Money Laundering.
As an industry, we have come together to commit to shared best practices and make recommendations to government. By aligning as an industry and working in collaboration with government, we can help facilitate an environment in which consumers are well-served and industry professionals can thrive.
Anti-money laundering recommendations
Our collaboration has resulted in a commitment from the undersigned organizations to pursue the following shared best practices and recommendations for government:
- Accept only verified funds – For sectors of real estate that are not already required to do so, we recommend that they accept funds only in forms that are verifiable through Canadian financial institutions.
- Mandatory anti-money laundering education – We recommend the introduction of mandatory anti-money laundering education for all real estate professionals subject to the reporting requirements administered by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to ensure that those professionals are trained in recognizing and reporting suspicious transactions. FINTRAC should work with sector organizations, regulators and the provincial government to improve existing resources so that they better reflect real-world situations and improve compliance.
- Smart regulation – We recommend that the federal government amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to allow FINTRAC intelligence to be made available to additional regulatory authorities, including the BC Securities Commission and the Financial Institutions Commission (FICOM). Optimally, the federal and provincial governments, as well as their respective agencies, should coordinate their actions, share information, such as the provincial assignment registry, and create a comprehensive, efficient enforcement regime.
- Ongoing engagement – We recommend governments and regulatory agencies, including FINTRAC, better utilize on-the-ground experience of real estate professionals to develop compliance resources and test policy ideas. This will result in well-crafted, practical regulation and foster a culture of compliance to protect consumers and the economy.
- Timely and transparent reporting – We recommend that FINTRAC implement a framework to identify and report trends on a regular basis and in language that is consistent and understandable to professionals, the public and media. This reporting system should also include consistency in examinations with immediate feedback designed to help industry professionals improve their compliance systems.
For a backgrounder to the statement, click here.
BC GOVERNMENT’S REACTION
DAVID Eby, Attorney General, and Carole James, Minister of Finance, issued the following statement on anti-money laundering commitments by the real estate industry:
“We are very pleased that five real estate organizations have come together to help fight money laundering in British Columbia. This commitment by real estate professionals to collaborate and develop best practices will go a long way towards getting dirty money out of the real estate market, protecting consumers and helping industry professionals improve their knowledge and regulatory compliance.
“As we review two reports to government on money laundering in real estate, we welcome this strong support from the real estate sector for our efforts to stop criminals from exploiting B.C.’s real estate market. We thank these groups for participating in the reviews by Peter German and the Expert Panel on Money Laundering and for providing the industry’s input.
“The steps being taken by the B.C. Real Estate Association, the Appraisal Institute of Canada, the BC Notaries Association, the Canadian Mortgage Brokers Association and the Real Estate Board of Greater Vancouver are practical and valuable actions that will help guard against criminals using real estate to launder funds. These actions include accepting only verified funds, introducing mandatory anti-money laundering education and making recommendations to government on better information sharing, more engagement with industry and timely and transparent reporting.
“We applaud these industry associations for their work towards stopping money laundering and ensuring public confidence in the real estate industry.”