Portion of article from RealtyTimes:
As of June 23, 2008, the latest amendments to Canada’s anti-money laundering legislation place additional responsibilities and liabilities on professionals and companies in real estate and other financial service sectors, adding new complexity to their relationships with the public.
“It is very ironic, in a day and age when we see numerous ads about protecting your personal information, and not sharing it, that you have this type of legislation that comes in force,” said Ottawa-based lawyer Patrick Veilleux of McCarthy Tétrault LLB, an anti-money laundering specialist.
The new regulations and amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000 have broadened and heightened reporting obligations and compliance issues. The overseeing body is The Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, Canada’s financial intelligence unit. This specialized agency was created “to collect, analyze and disclose financial information and intelligence on suspected money laundering and terrorist activities financing.”
As a result, real estate transactions lose significant aspects of privacy. Confidential third-party transactions may be difficult if not impossible. The overlap between these obligations and privacy regulations under PIPEDA may be challenging for brokerages.
“It used to be that real estate agents and brokers only reported and kept client identification on file for specific transactions, for example, C$10,000 in cash or more,” said Veilleux. “Going forward, for every real estate transaction in Canada, brokers must identify clients and keep a photocopy of their driver’s license or passport, for five years for every transaction. As Canadians, if you want to sell or purchase real estate, you must provide documents that say ‘I am who I say I am’ and that are kept on file by the brokerage.”
Clients may not enjoy this apparent invasion of privacy. Brokers and salespeople face the added concern that requiring detailed personal information may anger prospects and clients and could interfere with trading in real estate.
Is the “big brother” solution bigger than the problem? Worldwide projections, according to the International Monetary Fund, set the annual money laundering total at US$500 billion. In this post-911 era, detecting and disrupting terrorist financing is a significant goal.
These new federal requirements affect everyone. In the middle of high-stress real estate transactions, brokers and salespeople must add a new function to their roles or face significant consequences.
Funny enough, I’m in the middle of reading Orwell’s classic novel, 1984.
I have mixed feelings about this… but we’ll see how it goes. I don’t think it will have a significant effect on anything. After all, you need to show your license in order to buy a case of beer – why not a house? 🙂
