Special Cases - Make Reports
Builders who meet the definition of a ’real estate developer’ must report two types of possibly suspicious activity to the Financial Transactions Reporting and Analysis Centre of Canada (FINTRAC):
- Large Cash Transactions (defined as $10,000 or more in cash). This type of report must be filed within 15 days, normally over the internet. More
- Suspicious Transactions (where there are reasonable grounds to suspect money laundering or terrorist activity is involved). This type of report must be filed within 30 days, normally over the internet. More
Builders must also report to FINTRAC, the Royal Canadian Mounted Police (RCMP), and the Canadian Security Intelligence Service (CSIS) if they ever find they have in their possession:
- known Terrorist Property (including funds or other assets given towards the purchase of a house or condo). The FINTRAC report must be made within 15 days, in hard copy (paper). More
All reports will go into FINTRAC’s database for analysis, along with all the ones received from financial institutions, insurance companies, accountants, security/investment advisors, money services businesses, casinos, dealers in precious gems, accountants, licensed real estate agents and brokers. The Centre looks for patterns that could help prove that people or companies are trying to place cash and/or launder money from criminal or terrorist activities.
In one case from the Netherlands, a man set up two offshore companies as well as one in his own country providing legitimate services.
He was not registered as the owner of any of the companies. To hide his involvement he used two trust and company service providers as legal representatives offshore, plus a front man at home. They opened bank accounts with three different banks in different jurisdictions, explaining that the companies were part of an international structure, which wanted to benefit from favourable tax treatment by means of inter-company loans.
Then, the man used the companies to set up loan-back arrangements to transfer, layer and integrate the income from his criminal activity with funds from his legitimate enterprises. And in order to buy real estate, he had the front man arrange a fraudulent loan from one of the companies.
See ‘Money Laundering and Terrorist Financing Through the Real Estate Sector’Financial Action Task Force Secretariat Organization for Economic Cooperation and Development, 2008