Would you be suspicious if a client inadequately explains the last minute substitution of the purchasing party’s name? How about if a client arrives at a real estate closing with a significant amount of money? You should be. These are examples of money laundering, defined as the process used to disguise the source of money or assets derived from illegal activities.
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act requires real estate brokers/salespeople to be vigilant in reviewing transactions that may be considered money laundering, and to report such transactions to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
The three primary categories of matters that must be reported to FINTRAC are suspicious transactions, terrorist property, and any cash transactions of $10,000 or more. Unfortunately, the definition of ‘suspicious transaction’ is deliberately vague, and real estate professionals are advised to use their own judgment. For example, if the transaction “gives rise to discomfort, apprehension, or mistrust.” Failure to report a suspicious transaction may lead to either a summary offence ($500,000 fine for the first offence and up to $1 million for subsequent offences) or an indictable offence (maximum fine of $2 million per offence, imprisonment of up to five years, or both).
Still not certain about what constitutes a ‘suspicious transaction’? OREA Real Estate College offers an online continuing education course – Money Laundering – that will teach you how to recognize suspicious transactions.
In addition, at the conclusion of this two-module course, you will be able to:
• describe how the Proceeds of Crime (Money Laundering) and Terrorist Financing Act applies to the real estate profession
• design a system that will ensure compliance with the Act
• identify the penalties for non-compliance and how to avoid them
Celebrating OREA’s 90th Birthday
The College is offering a free nine-credit bundle of CE online courses in celebration of OREA’s 90th birthday. This offer is available until December 31, 2012. Courses must be completed by December 31, 2013.
For more information, go to http://www.orea.com/cepromo?utm_source=homepage&utm_medium=button&utm_campaign=cepromo.
Have you been involved in a suspicious transaction? How did you handle it?