The FINTRAC updates announced on June 1, 2021 must be complied with by real estate agents and brokerages across Canada starting on April 1, 2022. Here are answers to five of the most frequently asked questions I receive when conducting FINTRAC updates for brokerages and real estate boards.

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1. Why should I care about FINTRAC?

To me the main reason is that if a lender is suspicious about any buyer at any time before closing, they can cancel the mortgage commitment. Then the deal may not close and you will not be paid your commission. Do not associate with or represent any suspicious buyers.

2. Why does FINTRAC matter if I do not accept cash as a deposit on any real estate agreement?

FINTRAC is not just about cash. Every bank draft you receive as a deposit on a real estate agreement is suspicious because there is rarely any proof who purchased it or how they purchased it. What about a corporation that buys or sells real estate? Do you know who their shareholders are who actually own the corporation? They could be criminals. All of these are examples of potential money laundering.

3. What are some of the key reminders when completing the FINTRAC ID forms?

All sections need to be completed carefully. The client occupation should be specific because this connects the client to their geographic location. Always ask if the deal is being done on behalf of a third party.

4. What are some of the key new requirements announced June 1, 2021?

Every new client should now be considered to be in a business relationship with your brokerage, regardless how many deals they have done in the past with your brokerage. As such, a proper explanation of the deal should be included in section D of the FINTRAC Identification form. There is also a new Beneficial Ownership Form to complete for every client, which will, for example, ask for details on all shareholders of a corporation who own more than 25 per cent of the shares and whether a buyer may be a Politically Exposed Person.

5. What must a brokerage do now to make sure they comply with their FINTRAC obligations?

Real estate brokerages must make sure they have an up-to-date FINTRAC policy with a FINTRAC compliance officer; that all agents and employees of the brokerage have taken the required FINTRAC training; that a proper brokerage risk assessment is completed every two years; and that a FINTRAC audit is also completed to make sure that your FINTRAC regime is up-to-date. I have completed FINTRAC audits for real estate brokerages across Ontario and in other provinces.

If you have any question related to FINTRAC, or if you want to set up a seminar for your brokerage, do not hesitate to contact me.

5 COMMENTS

  1. Interesting article Mark. I could spend a lot of time on each of your 5 issues but let me share a quick thought on two facts you commented on. First, all requirements that came into force on June 1, 2021 must be in place by June 1st, 2021 period. FINTRACs reference to April 1, 2022 means that should FINTRAC inform a Brokerage that they are doing a Compliance Examination on them, FINTRAC will only ask for transactions/records that relate to the June 1, 2021 requirements that occurred after March 31, 2022. Your comment implies that realtors do not have to do anything until April 1st. Not exactly the case.
    Secondly, you reference the fact that every first time transaction with a realtor now results in a Business Relationship (BR), which is true. However the associated activity with every BR is much more than just the few ones you list in your narrative. If you are trying to be helpful Mark may I suggest that you provide all the detail and not just a taste. With the heavy duty fines coming down By FINTRAC on brokerages these days many of the cited deficiencies can arise from too little information being taken as what is required versus being exposed to the whole situation. Too little is never enough. Fines in the 6-figure range these days are proof of that.

  2. Fintrac did nothing for years while all the money laundering was going on in BC, which is approx. 20 or more years! Now all of a sudden they are putting more onus on Realtors. They let lawyers get away with not complying or at least very lax compliance. Typical government BS. Read a book by Sam Cooper, ‘Willful Blindness’ and it will open your eyes to all the corruption that has been going on far too long. I’ve been saying for the last 20 years there is money laundering going on in Vancouver and TO, and nobody is paying attention. Wonder why how prices are so high in these cities, including Montreal? Two words, ‘Money Laundering’.

  3. Always wanted to be a detective. But, an unpaid detective… hmm…
    Also, is fair to rob these government people of their jobs, but doing most of their work…???
    Tsk tsk tsk #Confused

  4. Would it be of any use or value to include a copy of the agent Fintrac report in the agreement of purchase and sale correspondence sent to the buyer and or seller law office? Date sent recorded…

    Carolyne L

    • Lawyers have their own client Fintrac reporting to do. Would this provide a crosscheck? Although likely due to privacy the lawyer wouldn’t be able to share his report. Just thinking out loud; likely the real estate brokerage office would not be permitted to forward to the law office unless of course the buyer signed permission to share.

      Carlos, are you in Canada?

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