Nearly 9 out of 10 real estate entities in the province have significant deficiencies in their anti-laundering controls
With the real estate segment now operating as one of the crucial components of B.C.’s economic engine, the need to identify and address possible fracture points brought about by money laundering has become paramount, according to Canada’s financial watchdog.
In a report by FINTRAC, fully 88% of real estate entities in B.C. were found to have “significant” and “very significant” deficiencies in their risk assessment, client identification, record keeping, and reporting policies and procedures.
The agency conducted 130 examinations of anti-money laundering controls in B.C. (87 of which are in Vancouver and the Lower Mainland) between 2015 and 2017, Postmedia reported.
The findings reinforced FINTRAC’s November 2016 report on the national housing market, which found “deficiencies in most aspects of the real estate sector’s compliance programs that render it more vulnerable of being used by criminals to launder illicit funds.”
FINTRAC is paying particular attention to money laundering via real estate as widespread property speculation has been blamed for Vancouver’s unaffordability crisis. The agency also noted that funds accumulated via these channels are used in organized crime pursuits such as the fentanyl trade.
A separate investigation by the provincial government outlined how Vancouver’s casinos were used as conduits for money laundering by foreign nationals, especially well-to-do Chinese.