Re: Time to rethink FINTRAC (September REM)

As an established consultant in the anti-money laundering compliance field here in Canada, I have made it a practice to be open to the opinions from professionals working in the various sectors governed by Canada’s money laundering legislation. Since 2000, when the new AML legislation came into force and FINTRAC emerged as the regulatory authority governing the legislation, I have seen all reporting sectors go through a series of stages as they struggle with the new compliance requirements. Real estate officials have been quite vociferous in the first decade of compliance about why these requirements are needed in the first place; and specifically, why Realtors need to do this when all they are doing is selling properties and trying to make a living.

This rather tunnel-versioned perspective seemed to be disappearing somewhat these past few years, with more and more Realtors demonstrating that they truly get it now and can see how they can be used quite effectively to launder the proceeds of crime through the selling and buying of property – residential or commercial.

Then along comes Hannon Bell with his rant in REM, which makes me really wonder what he has learned and understood about this whole program in the first place. It is clear to me that he only wants to sell real estate and make a living and leave all the compliance to someone else – despite the ever-increasing evidence from across the world that real estate continues to be one of the most popular means through which criminals can hide their dirty money. Hannon has certainly done a disservice to the real estate sector through his narrow thinking in my view. AML compliance is here to stay I am afraid and Hannon needs to get over his feelings of being a pawn in someone’s chess game and start being a part of the solution – other Realtors seem to have got that message.

Chris Walker

About Business Crime Solutions, Inc.

Merrickville, Ont.



Well said Hannon Bell! There is no need to make suggestions about what needs to be done, it’s really quite easy – give the task to the lawyers who actually handle and transfer funds as they are better positioned than agents to assess any risks. Though I doubt that they do the job unpaid as we do!

If I wanted to be a policeman, I would have joined the Mounties.

Furthermore if customs and border protection didn’t let these crooks in we wouldn’t have to be involved at all.

John Zimnoch

Re/Max Hallmark Realty

Toronto

 

 

13 COMMENTS

  1. Once again, Chris Walker has chimed in with his criticisms of real estate industry members who feel that Fintrac isn’t something that we should be involved with. Chris’ particular concern over Hannon Bell’s recent Rem article can only be regarded as lame – as Hannon only articulated what the majority probably believe. CREA have never really consulted the membership on Fintrac, which is consistent with what we’ve come to expect from CREA.

    Instead of sulking about Hannon Bell’s article, Chris Walker could have used this opportunity to explain to professional real estate, exactly how our efforts could actually squirrel out a: money laundering terrorist, but he didn’t. Chris Walker has avoided addressing any of the specific doubts that have been raised by professional real estate, regarding the actual functionality of Fintrac, vis-a-vis professional real estate.

    If Chris Walker wants to refute what Hannon Bell had to say, then we need to see an argument; repudiation, isn’t an argument!

  2. Quietly without recognition our members, Canadian REALTORS, have spent over $212 Million Dollars protecting Canadian homeowners in the last few years. They have verified the indentity of over 7.5 million new neighbours who were moving in next door across Canada.

    Add in the 1.6 Billion dollars they paid in the last 10 years ensuring realtor.ca was up and running, the value of REALTOR goes well beyond a simple SOLD sign on your front yard!

  3. Yet again it is about lack information, communication and motivation. I asked at recent seminar held by Fintrac representives “How many actual cases, connections, bad guys have been caught as a direct result of the fintrac disclosures?” Answer “No idea… they didn’t think any connections where recored”. What!!!! Wouldn’t it help us to see our time and responsiblities (we can go to jail and/or pay a hugh fine) isn’t a waste and that we are doing our part to fight crime and terrorism. Wouldn’t it help that if this information was made public the bad guys would go elsewhere to do there dirty business. Doesn’t it make sense that we register a client ONCE and have all their information recorded further purchases are then just notations to the regerstration. I don’t believe in a board of over 100 offices any of them will take cash or uncertified cheques for any amount of money let alone $10,000.

  4. What I have always found funny with regards to this subject in Real Estate is that so many reps. think they are hard done by to get I.D. from a client that is spending a few hundred thousand dollars and usually considerable amounts of time with them. They say “it’s not my job” or “I’m not paid for this” or “I’m not a cop”. My back ground is from the retail industry and FINTRAC is involved there also, if someone purchases a product .. especially by cash … with a value higher than $10,000.00 then the retail associate (usually a part time worker) must complete the compliance forms, and they are much more detailed than seeing I.D and answering 3 questions. The part time employee makes something like $10 – $20 per hour, we make considerably more per transaction and complain more about such petty little things it drives me crazy.

    • Are you saying for example that – let’s say someone wants to buy furniture worth more than 10k or install a sound system worth more than, or a swimming pool – and wants to pay cash, as many long time immigrants have done, forever – your comment applies?

      Never heard of this before. Perhaps clarify, Nathan.

      Respectfully
      Carolyne L

      • http://www.fintrac-canafe.gc.ca/reporting-declaration/info/rptlctr-eng.asp a quick google search got me this link. It is true. Not sure if most or all stores actually comply. As to “it’s not my job, I am not getting paid to do this” ??? It takes 5 minutes out of the dozens of hours I spend with a client for a single transaction. My guess is that the cash transactions (if any) will be done via FSBO’s. Let the seller explain to his bank where he got the money from. I am sure they then will have to fill out some more forms.

    • Nathan, does the retail do this after hours and not get paid or are they paid as this is part of their job. Filling out FINTRAC forms is actually a distraction from what I am paid to do… and as we know very ineffective. What we are tired of is a government that is very unsupportive of our industry. This is not our job.

  5. Well said, Chris. It’s remarkable there are still so many agents who are purely 1950’s sales people interested in as little responsibility and as much “producing” as possible. Fortunately, the ranks of consultative, representative, diligent, accountable agents are growing. Consumers are seeing to that.

    I love it when we are given more responsibility through official channels. It’s never been easier to eschew the image of the leisure-suit clad glad-handing mouthpiece of yesteryear.

  6. Chris,
    Your business cannot be attacked or wiped out because of issues like this while Hannon’s can. Your business financially benefits from crime prevention, while REALTORS have been exposed to an unknowing public’s awareness that their realtor is now required to complete an untrained but highly consequential review of their person.

    Has CREA run one public service announcement that it’s members have completed over 7.5 million investigative reviews on Canadians since 2000?
    What percent of those 7.5 million Canadians were fully informed of what was contained in and what forms were completed to meet Fintrac requirements by their REALTOR?

    What happens when the Government requests all 7.5 million investigations be scanned and forwarded for entry into their national database?

    What happens to the untrained REALTOR that mistakes the innocent looking young couple that subsequently is found to be otherwise?

    What happens to the broker owner and all their agents when one of their agents gets branded for letting a terrorist purchase real estate in their local community?

    Risk Exposure in the LTTP profession is always addressed in a reactive manner after a court case proves previous warnings were accurate. Pro-Active solutions, training and mandated common business practices for all agents in a brokerage remain unaddressed.

    I would not operate or expose a brokerage I owned to these risks without clear, concise, easy and mandated common practices on anything that put my brokerage at risk, yet apparently that still is not being pro-actively addressed by brokers.

  7. Well f there ever was a rant, the rant is from Chris Walker, a guy making a living off of educational programs in FINTRAC. Chris we aren’t making a living we are just handed unnecessary paperwork. John Zimnoch summed it up accurately…not you. Chris Walker, might be time for you to start doing all your workshops pro-bono as well since you are so passionate about this.

    • “more and more Realtors demonstrating that they truly get it now and can see how they can be used quite effectively to launder the proceeds of crime through the selling and buying of property – residential or commercial.” Really Chris …sounds pretty self serving given your business model.

      I would like to see numbers on how much Fintrac spends on specifically monitoring this huge dragnet paper work program and how effective it has been ? Then I would like to know how much this program has ad will cost Canadian businesses to operate under threat of fines up to half a million to store and shred millions of useless documents for the sake of a few that are actually connected to these crimes. When you consider that these few likely have info from fake ids we are not trained to spot as I like most agents have no idea what most of the acceptable ids are even supposed to look like. Yet here is the menu of draconian penalties I doubt that a trained and salaried FIntrac agent would who made a paperwork mistake would be subject to the same penalties.

      Failure to report suspicious transactions: up to
      $2 million and/or 5 years imprisonment.

      Failure to report a large cash transaction or an electronic funds transfer: up to $500,000 for the first offence, $1 million for subsequent offences.

      Failure to meet record keeping requirements: up to $500,000 and/or 5 years imprisonment.

      Failure to provide assistance or provide information during compliance examination: up to $500,000 and/or 5 years imprisonment.

      Disclosing the fact that a suspicious transaction report was made, or disclosing the contents of such a report, with the intent to prejudice a criminal investigation: up to 2 years imprisonment.

      I am all for effective methods to catch these criminals and honestly if this information was actually going in to a database where it was analysed and patterns and correlations to criminals could be spotted but honestly do not see the reason for having private businesses absorb the cost to establish maintain and ultimately shred this huge database of likely worthless paperwork. Hiring one more investigative financial analyst at Fintrac would likely be more effective than this paperwork monster.
      What is sad is that while I have a no love for terrorism in any form the overreaction government mandated spending to address the terrorist threat is out of proportion to its real impact on our citizens and has been turned in to big business for those posed to profit. This overreaction means that to a certain extent they have already been successful in crippling our economy to a small extent :)

      • How many terrorists and money launderers have be caught as a direct result of FINTRAC documentation completed by a Realtor?

    • If FINTRAC is so vital, why does the client neither have to date or sign anywhere on the form stating that the information therein is true and accurate?

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