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Professional Standards Manual

Trading Services

2. Acting For Sellers

(w) Proceeds of Crime (Money Laundering) and Terrorist Financing Act

[updated 08/25/2015]

The following summary of the legislative requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act applies to licensees when acting as an agent regarding the purchase or sale of real estate. These requirements do not apply to licensee’s activities related to property management. If you are an employee of a licensee, these requirements are the responsibility of your employer except with respect to reporting suspicious transactions and terrorist property, which is applicable to both. If you are a licensee acting on behalf of a brokerage, these requirements are the responsibility of the brokerage except with respect to reporting suspicious transactions and terrorist property, which is applicable to both.

(i) Reporting Suspicious Transactions

You must report where there are reasonable grounds to suspect that a transaction or an attempted transaction is related to the commission or attempted commission of a money laundering offence or a terrorist activity financing offence.

See: 

at www.fintrac-canafe.gc.ca.

(ii) Terrorist Property

You must report where you know that there is property in your possession or control that is owned or controlled by or on behalf of a terrorist or a terrorist group.

See Guideline 5: Submitting Terrorist Property Reports to FINTRAC at www.fintrac-canafe.gc.ca.

(iii) Large Cash Transactions

You must report large cash transactions involving amounts of $10,000 or more received in cash.

See:

at www.fintrac-canafe.gc.ca.

(iv) Record Keeping

You must keep the following records:

  • large cash transaction records
  • receipt of funds records
  • client information records
  • copies of official corporate records (binding provisions)
  • copies of suspicious transaction reports
  • records of the purpose and intended nature of your business relationships
  • records on the measures you take to monitor your business relationships and the information you obtain as a result of your monitoring.

See Guideline 6B: Record Keeping and Client Identification for Real Estate at www.fintrac-canafe.gc.ca.

(v) Ascertaining Identity

You must take specific measures to identify the following individuals or entities:

  • any individual who conducts a large cash transaction
  • any individual or entity for whom you have to keep a client information record or a receipt of funds record
  • any individual for whom you have to send a suspicious transaction report (reasonable measures and exceptions apply).

See Guideline 6B: Record Keeping and Client Identification for Real Estate at www.fintrac-canafe.gc.ca.

(vi) Use of personal information

The use of personal information in Canadian commercial activities is protected by the Personal Information Protection and Electronic Documents Act (PIPEDA), or by substantially similar provincial legislation. You have to inform individuals concerning the collection of personal information about them. However, you do not have to inform individuals when you include personal information about them in any of the reports that you are required to make to FINTRAC. You can get more information about your responsibilities in this area from the following:

(vii) Business Relationship

You enter into a business relationship when you conduct two or more transactions in which you have to:

  • Ascertain the identity of the individual; or
  • Confirm the existence of a corporation or other entity

See Guideline 6B: Record Keeping and Client Identification for Real Estate

See also the Report from Council newsletter: Changes to Canada's Anti-Money Laundering Regulations Affect Brokerages (June 2014), and Clarifying Brokerages' Obligations Under the FINTRAC Regime (August 2014).

(viii) Third Party Determination

Where a large cash transaction record or a client information record is required, you must take reasonable measures to determine whether the individual is acting on behalf of a third party.

In cases where a third party is involved, you must obtain specific information about the third party and their relationship with the individual providing the cash or the client.

See Guideline 6B: Record Keeping and Client Identification for Real Estate at www.fintrac-canafe.gc.ca.

(ix) Compliance Regime

The following five elements must be included in a compliance regime:

(1) The appointment of a compliance officer

(2) The development and application of written compliance policies and procedures

(3) The assessment and documentation of risks of money laundering and terrorist financing and measures to mitigate high risks

(4) Implementation and documentation of an ongoing compliance training program

(5) A documented review of the effectiveness of policies and procedures, training program and risk assessment.

See Guideline 4: Implementation of a Compliance Regime at www.fintrac-canafe.gc.ca. For further information call 1-866-346-8722 or visit www.fintrac-canafe.gc.ca.