November 8th - 2007

CREA issues Call to Action on proposed FINTRAC changes

Proposed changes to Canada's anti-money laundering and anti-terrorist financing framework could be costly for REALTORS®.

Proposed changes to Canada's anti-money laundering and anti-terrorist financing framework could be costly for REALTORS®. CREA says the federal government's proposals unfairly target real estate professionals and REALTORS® need to understand and voice their concerns.
 
Although CREA convinced the federal government to abandon several proposals that would have been unreasonably onerous or impossible for the industry to comply with during its three-year consultation, four key concerns remain.
 
One of the main objections is that registrants are being singled out under the regulations, while competitors will not be. CREA has been requesting that all competitors to organized real estate including homebuilders, lawyers, or in-house commercial real estate practitioners, be required to adhere to the same new requirements as regsitrants.
 
In addition, there are three new requirements CREA has strongly objected to throughout the consultations. The first is the regulation that says REALTORS® must report suspicious transactions to FINTRAC - this remains unclear in the context of the real estate transaction.
 
Another concern is the requirement for each broker office to conduct a written self-assessment of their exposure to money laundering activities. CREA has argued that REALTORS® do not have the necessary training or resources to perform a task that is best left to law enforcement officials.
 
In the case of overseas clients, the new regulations will require REALTORS® to contract the services of an agent whose purpose is to confirm personal identification of the client. CREA believes several of the proposals are unreasonable given the strong level of compliance by the real estate industry. In fact, FINTRAC's own data indicate that less than one per cent of all money laundering and terrorist financing investigations have involved real estate transactions since the Proceeds of Crime (Money Laundering) and Terrorist Financing Act was amended in 2001.
 
In its submission, CREA states that some of the proposed changes would be costly and excessively onerous for small real estate brokerages, which make up more than 65 per cent of its membership. Other proposals could also represent a violation of civil liberties. CREA's Federal Affairs Committee has even recommended a legal review of the document to determine whether a legal challenge may be warranted with respect to some of the proposals.
 
Get involved
To get REALTORS® involved in shaping the outcome of this important issue, CREA has put forth a Call to Action asking REALTORS® to participate in an e-letter campaign to get the message to the Prime Minister.  Here’s a portion of the letter which spells out the objections:
 
“As a REALTOR®, I have significant concerns with recent changes made to the Proceeds of Crime (Money laundering) (terrorist Financing) regulations - changes that were published in late June of this year. These amendments have put me at a distinct disadvantage compared to my competitors who also facilitate the buying and selling of real estate…I join my fellow REALTORS® in requesting that any new regulatory requirements for our industry also be delayed until all our competitors are included. I strongly believe these other groups must be captured in order to maintain a level and competitive playing field. Until they are, there should not be any additional regulations implemented that increase the regulatory burden of a REALTOR®.”
 
To participate, visit www.letsbefair.ca and click on “Send a Letter.” Then, simply fill in the blanks and hit “send.” Your letter will be forwarded to your local Member of Parliament and the Prime Minister.

Share this item

Anti-competitive behaviour – be aware of it; avoid it Condo market cooling

For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
Facebook LinkedIn YouTube Instagram

The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.

OREA AI Assistant