B.C.’s real estate sector Monday made five recommendations to Victoria and Ottawa aimed at helping protect the industry from unscrupulous operators involved in money laundering.
“We want a clean sector,” said B.C. Real Estate Association CEO Darlene Hyde. “It’s a complex crime from what we can see. No one seems to have a handle on it. We need to know a lot.”
“As an industry, we have come together to commit to shared best practices and make recommendations to government,” five sector groups said in a statement. “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.”
Earlier this month, B.C. Attorney General David Eby received a report from investigator and former RCMP deputy commissioner Peter German on money laundering in the B.C. real estate sector. The report is to be released publicly once cabinet reviews it, Eby said.
The extent of money laundering in real estate remains unknown, but anti-financial crime advocacy group Transparency International Canada suggests tens of billions of dollars of criminal proceeds could be washed in the Toronto and Vancouver markets annually.
The sector group said for public confidence to remain, there can be no illegal funds in the market. It is supportive of German’s work and is committed to upholding best practices to keep organized crime funds out of the market, it said.
“There’s so many players involved in real estate that you can’t take a siloed approach,” Hyde said. “It’s critical. It’s a very complex business this money-laundering crime.”
Attorney General David Eby and Minister of Finance Carole James said in a joint statement that industry involvement in develop best practices would help get dirty money out of the real estate market, help industry professionals improve their knowledge and regulatory compliance and protect consumers.
“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,” the statement said.
The sector groups made five recommendations to the federal and provincial governments:
- Only verified funds coming through Canadian financial institutions should be accepted for transactions;
- Anti-money-laundering procedures should be mandatory for real estate professionals, and transactions should be subject to reporting requirements administered by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to ensure those professionals recognize and report suspicious transactions;
- Ottawa should amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to make FINTRAC intelligence available to regulatory authorities, including the BC Securities Commission and the Financial Institutions Commission. All agencies should share information, such as the provincial assignment registry, and create a comprehensive, efficient enforcement regime;
- Governments and agencies, including FINTRAC, should work with real estate professionals to develop compliance resources and test policy ideas
- FINTRAC should implement a framework to identify and report trends regularly and in language consistent and understandable to professionals, the public and media.
The real estate organizations involved are 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.