As published in REM - independent news and opinion for Canada's real estate industry.
"Sometimes we are the red flag and sometimes we are the bull." – I made that up myself.
a. An all-wheel drive option on your Opel Kadet.
b. The marks in the mud bank proving Darwin’s theory.
c. A Scandinavian missing person’s bureau.
The exam-writing experts say if you’re not sure of the answer in a multiple-choice question, always select (d.) which in this case is Financial Transaction and Reports Analysis Centre of Canada.
Hey – you’re good!
There are some clues in the correct answer about how the program works. The first four letters of the fifth word and the last three words give us “Anal Centre of Canada”, which as we Westerners know refers collectively to Ottawa and Toronto.
But enough about them.
Recently two compliance officers from FINTRAC audited our office. Over the course of an afternoon, they reviewed sales and property management files chosen at random including transaction record sheets, trust account records and deposit books.
Then the fun began: interviews with sales staff also chosen at random from those in the office. Even more reason to be out prospecting. The interviews are designed to test knowledge of and training in the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
Sure, we knew about the $10,000 cash threshold.
However, that’s about all.
We couldn’t demonstrate any on-going training.
We weren’t familiar with suspicious transaction reporting.
We had never printed the terrorist list from the Office of the Superintendent of Financial Institutions (OFSI) website, circulated it to our staff or compared it to our client lists.
We had no provision to review our policy and procedures. Since we had none; I felt the lack of review should not have been held against us. The compliance officers took an opposing view.
We were given 30 days to detail how we intended to overcome the deficiencies. We were able to find one other office in all of B.C. that had completed the process and developed a training manual. Scattered through a number of websites and the B.C. Licensee Practice Manual (pp.101-105) is a lot of material. However, as with all things, the devil is in the details. (I threw in the ‘devil’ to appease the creationists among you who might have been offended by the Darwinian reference above.)
- A series of cash deposits totaling $10,000 or more meets the definition if received within 24 hours or over a weekend.
- A cash deposit of $9,900 meant to avoid the legal threshold must be reported as suspicious activity.
- You cannot advise a client you are going to report either a cash deposit or a suspicious activity. (There’s a test of agency!)
- Wire money transfers from certain countries (there’s a website) might require reporting.
- When you receive large cash transactions, the client must provide and you must copy and retain appropriate government issued identification.
So – no need to panic – we are not prevented from dealing with Osama bin Laden or taking his suitcase of dusty money – we just have to report it. If we don’t, the maximum penalty is a fine of $2 million and five years in jail.
I might be able to squeeze the $2 million but I definitely can’t afford the five years. They’re coming for you next – are you up for it?
Marty Douglas is a managing broker for Coast Realty Group (Comox Valley) Ltd, managing two of 15 Coast Realty Group offices on Vancouver Island and the Sunshine Coast of B.C. He is a past Chair of the Real Estate Errors and Omissions Corporation of B.C. and the Real Estate Council of B.C., the B.C. Real Estate Association, and is a current director of the Vancouver Island Real Estate Board. Email email@example.com, 1-800-715-3999; Fax (250) 897-3933.
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