New Anti-Money Laundering Regulations in Canada

New Anti-Money Laundering Regulations

The Issue

The Department of Finance and FINTRAC are currently proceeding with an aggressive plan to implement new anti-money

laundering and anti-terrorist financing (AML/ATF) regulations in mid 2008 and 2009. New regulations affecting the real

estate industry take effect on June 23rd, 2008.

REALTORS® have consistently supported the federal government's efforts to monitor, document and report known

suspicious and illegal activity since 2002, and have been meeting regularly with officials since 2005 to develop a clear

implementation protocol for the adoption of the new requirements. Despite this, licensees are being asked to perform

functions that they are simply unable to do.

We also believe that neither the federal government, our industry, nor the general public is adequately prepared for the

June implementation deadline.

Our Concerns

Among the major concerns that REALTORS® have are:

• The Federal Government is unprepared for the June 23rd, 2008 deadline – placing REALTORS® at risk of noncompliance.

The interpretations and guidelines for the new regulations remain incomplete.

• Huge loopholes in the legislation still remain. For example, the private sale market is not captured under the

regulations. As a result, criminal activity can and will continue to operate through these channels.

• Government will be forcing salespeople into a law-enforcement role.

• REALTORS® will be required to identify the client of a cooperating Broker. This will leave unsecured private

information in every real estate office.

• Under the new rules, REALTORS® will now be required to ask for and verify the identity of private buyers or sellers –

individuals with whom they have no legal or contractual obligation.

• REALTORS® do not have the tools to identify beneficial owners, third party participants, or assignees.

• The industry is not prepared, in terms of procedures or security resources, for the major increase in personal

information that will evolve with the new regulations.

Recommendation:

REALTORS® urge the government of Canada to

delay the enforcement

of the new anti-money laundering and

anti-terrorist financing regulations until such a time that guidelines are clear for all concerned. Industry must be given an

appropriate amount of time to properly prepare - and thus continue to function as a partner with government in combating

criminal activity.

REALTORS® urge the government to

rescind the requirement for identifying and recording the personal information

of any individuals with whom they have no legal relationship. They also call on the government to close major loopholes in

the regulations by regulating the private sale and For Sale By Owner Industries immediately.

REALTORS® call upon the Government of Canada to

initiate a public campaign to educate the general public

with

respect to the mandatory new client identification, record keeping, and reporting requirements as authorized under the

Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

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Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

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