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Money Laundering & FINTRAC Compliance

September 18, 2013

 

RE/MAX CROSSROADS RULES & REGULATIONS BULLETIN:

 

Money Laundering & FINTRAC Compliance

 

Realtors are reminded to know and understand their responsibilities under FINTRAC (stands for Financial Transactions and Reports Analysis Center of Canada), which was established to enforce the money laundering and anti-terrorist financing regulations of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act - especially after the attacks of September 11th in the U.S.    The attached document shows how money laundering happens in the real estate industry, based on research by ABCsolutions for CREA members.

 

Failure to comply can result in serious consequences for you and the brokerage.  According to the Sept 2013 REALTOR Edge publication (copies available for free at reception), FINTRAC routinely selects brokerages from across the country for random audits to ensure compliance with the Act.  If monetary penalties are laid for non-compliance, amount will vary depending on the degree of non-compliance and risk imposed on the system.

 

There are various reporting requirements for brokers under FINTRAC, including:

 

·         Suspicious Transactions

You must report where there are reasonable grounds to suspect that a transaction or an attempted transaction is related to the commission or attempted commission of a money laundering offence or a terrorist activity financing offence. 

 

·         Terrorist Property

You must report where you know that there is property in your possession or control that is owned or controlled by or on behalf of a terrorist or a terrorist group. 

 

·         Large Cash Transactions

You must report large cash transactions involving amounts of $10,000 or more received in cash. 

 

 

Brokers must also keep these records:

•  Large cash transaction records

•  Receipt of funds records

•  Client information records

•  Copies of official corporate records (binding provisions)

•  Copies of suspicious transaction reports

 

 

Below are useful websites, publications, forms and tools from CREA to help you and your clients understand what’s required of you to comply with FINTRAC requirements:

 

  • A booklet of the FINTRAC requirements can be found here. This was last revised Aug 7, 2008. 
  • There is also a convenient web site with the most recent content here.

NOTE:  “CREA recommends that REALTORS® advise clients of the FINTRAC requirements BEFORE any real estate documents are signed. This is to avoid members being involved in a buyer agency or listing agreement, only to discover the client later refuses to provide the identification information now required by law.  A REALTOR® who continues to represent a client who refuses to provide identification information is in non-compliance of the law.”

  • CREA has also prepared a brochure REALTORS® can use to explain FINTRAC regulations to consumers. Click here.

 

Several forms have been developed by CREA to help with compliance. CREA recommends you always refer to the forms posted here and in WEBForms as the most current.

  • The Risk Assessment Form for brokers is here.
  • Individual Identification Information Record is here.
  • The Corporation/Entity Identification Information Record is here.
  • The Receipt of Funds Record is here.
  • Identification Mandatory/Agent Agreement form is here.
  • Template Consent Agreement is here.

 

Realtors who would like to view a FINTRAC compliance training video, see below. 

 

 

Also, CREA has training modules including Money Laundering 101 are available on their www.RealtorLink.ca  website under the Training tab in the Money Laundering Compliance Centre.

 

 

Questions?

 

If you have any question or comments, please contact The Canadian Real Estate Association at info@crea.ca

 


Tagged with: money laundering fintrac compliance fraud audit
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