According to an article published in CBC News, a report prepared for Canada's anti-money laundering watchdog refers to offshore cash in the real estate sector as a "significant risk" for criminal offenses. It was also said that FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) commissioned a profile of the sector's vulnerabilities by accountancy firm Grant Thornton.
"The purchase of Canadian real estate assets with offshore money and/or by offshore persons was noted as a significant risk factor," the source quotes what was said in an overview of the report. Furthermore, the said report also points out a lack of "quality and ethics infrastructure" in the area as a concern of "critical importance."
It was also mentioned that the agency says it has conducted more than 200 compliance examinations in the real estate sector in Western Canada in the past three years. It was noted that by law, real estate brokers, sales representatives and real estate agents are required to report doubtful transactions and transactions involving the cash of $10,000 or more.
But the source says that as of the present, FINTRAC's records only has a total of eight reports from January 2012 to June 2015 involving suspicious or large cash transactions.
was also mentioned. It notes the use of legal trust accounts as a specific area of concern for the real estate sector and lawyers are exempt from FINTRAC's requirements because of solicitor-client privilege.
Kenneth (Kim) Marsh, the vice-president in IPSA International, a company that works with foreign governments and banks to recover funds and investigate fraud, said that he has recently been hired by a number of defrauded Chinese banks trying to track down cash laundered into the markets in Vancouver.
"The real estate market is one of those methods that is used fairly extensively," he said. Adding, "I've seen a number of cases now where large amounts of high-end real estate have been purchased over a short period of time, and people are on the run." Furthermore he believes that the Canadian real estate market has established a status as a place to launder money.
"We're not seeing a lot of disclosures from the real estate industry and who knows what's going on with the legal industry," he said. "They don't have to comply. They're not transparent. They're basically unaccountable."
He also said that there is a danger that the flight of cash out of China may intensify with current situation in the country's economy and stock market.
Source: https://www.cbc.ca/news/canada/british-columbia/real-estate-bought-with-offshore-cash-raises-money-laundering-concerns-1.3202169
