New Anti-Money Laundering and Regulatory Frameworks in the Works

Anti-money laundering (AML) refers to regulations and measures implemented to combat money laundering and terrorist financing activities. Money laundering involves disguising the origins of illegally obtained funds and making them appear legitimate, while terrorist financing involves providing financial support to individuals or organizations involved in terrorist activities.

In Canada, the government has initiated a consultation process to gather public input on potential changes to the country’s AML/ATF regime. These changes could have implications for the real estate sector, which has been identified as particularly susceptible to money laundering.

The consultation paper proposes expanding the AML/ATF framework to include additional reporting entities in the real estate industry. This could involve requiring for-sale-by-owner companies, real estate auction platforms, building supply and renovation companies, title insurers, and mortgage insurers to adhere to AML/ATF obligations. It also suggests obligating real estate representatives to identify unrepresented parties and conduct third-party determinations in transactions involving unrepresented parties.

Furthermore, the paper explores the possibility of extending the AML/ATF framework to cover high-value goods, such as automobiles, yachts, aircraft, art, and other luxury products that can be exploited for money laundering purposes. It also considers including other sectors like bulk cash, company service providers, white-label automated teller machines (WLATMs), and factoring companies within the regulatory framework.

These potential changes aim to strengthen the AML/ATF regime, increase transparency, and mitigate the risks of money laundering in the real estate sector. By expanding reporting obligations and enhancing regulatory requirements, the government seeks to make it more difficult for individuals to use real estate transactions as a means to launder illicit funds. Stakeholders, including individuals and organizations involved in real estate, have the opportunity to provide feedback on these proposals during the consultation period.