FinTRAC Audits the AML Programs of 500 Real Estate Firms with Troubling Results

What Happened?

March 6, 2020: Canada’s financial watchdog FinTRAC audited 500 real estate companies, and found 172 were guilty of violating anti-money laundering rules by neither checking the identities of their clients nor reporting large cash deals to the government.

At half of the companies audited, the sales agents had no formal training on how to properly detect money laundering or verify the identity of their clients.

In response, FinTRAC is implementing an ownership registry beginning May 2020, and making it mandatory for real estate agents to take an anti-money laundering course–a first for Canada.

Source: https://www.occrp.org/en/daily/11760-canada-real-estate-firms-violate-anti-money-laundering-rules

Who Is Impacted?

Real-Estate Developers, Brokers, and Sales Representatives.

Why This Matters?

In 2019, an expert panel estimated that $5.3 billion dollars (US$ 4 billion) were laundered through real-estate transactions in Canada in 2018.

With their 2019 budget increase from the Canadian government, FinTRAC has launched an aggressive front to combat this activity in our economy.

“This offensive is sending a strong message to the sector and to people who might seek to exploit it that we all are determined to protect the Canadian people and the economy.” – FinTRAC spokesperson, Erica Constant

What’s Next?

The provinces hope these actions from the Regulator will prevent the use of trusts, corporations, or partnerships to hide transactions from public view. 

learn more

Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

Request a demo today.