Canada's Real Estate is booming with Chinese and other foreign investors, but reports also say that Canada has become the perfect place to invest money coming from the illegal activities of foreign investors. How so? These investors buy properties in Canada to turn their 'dirty money' clean.
According to the Financial Transactions and Report Analysis Centre of Canada or Fintrac, the real estate industry in Canada is more prone to money laundering than any other financial industries like banks and casino.
In a news article from the Province that was obtained from Canadian Border Service Agency through a freedom of information request, Vancouver is being targeted by a small percentage of Chinese nationals as a place for illicit offshore investments. In an investigation done by the news agency, reports show that the number of Chinese, and other international groups, laundering money in Canadian real estate is increasing by the day.
Under Canada's Law, the responsibility to report suspicious transactions or those transactions over $10,000 rests with real estate agents and their brokerages. Paperwork should be filed, and the identification of the individual or company involved in the transaction must be attained. Penalties for not doing so are firm, with fines up to $2 million and/or five years in prison.
Real Estate agents in Canada are very eager to follow, but it is very easy to fool an agent. An experienced realtor told the Province that with their busy schedules, they don't really have the luxury of time to investigate the identity of their clients. Another real estate agent told the news agency that they only write in the report for Fintrac "what they are told" about the identities of their prospects.
In an article in the National Post, City Manager Penny Ballem was asked if Vancouver officials are taking actions against money laundering. "In terms of corruption and money laundering, I can tell you in my conversations with (Vancouver Police Chief) Jim Chu, and the provincial solicitor general, [that] these things are always a challenge for all levels of government," Ballem said.
