Many in industry ignore AML Compliance law
Canada passed legislation to get tough on money laundering and terror financing fifteen years ago, but getting everyone to comply with the law has been a challenge—especially in real estate.
According to a report by Alexandra Posadzki in the Toronto Star online edition, numerous Canadian real-estate companies have failed to name a Compliance officer, and many others have not identified or implemented any plan whatsoever to flag money laundering or other suspicious transactions common to real-estate sales. This sampling of data was compiled by Fintrac, Canada’s national financial-intelligence unit.
A real-estate industry representative noted that many real-estate businesses are very small and local to their area, characteristics that are not suited to large-scale compliance initiatives meant for large operations. However, members of Canada’s New Democratic Party have pushed for answers to why so many in the industry are allowed to ignore the rules, and they point to the alleged corruption in the Vancouver real-estate market as evidence of larger forces at play.
All-cash purchases of high-end real estate have gained notoriety in the West as popular vehicles for laundering illicit money, and Vancouver, B.C. last year drew a lot of attention in Canada and is again under the microscope for questionable real-estate transactions.
While Fintrac does compliance enforcement actions, the current emphasis with the non-compliant real-estate entities is providing information on what they need to do to achieve compliance.
Other nations like the U.S. and Britain are struggling with this reality as well, and FinCEN in the U.S. has been pushing for greater transparency and compliance, especially in high-value markets like New York and Miami.