BC Government Releases Cullen Commission Final Report and Recommendations
TAGS: Anti-Money Laundering Cullen Commission Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
On Wednesday, June 15, the BC Government publicly released the final report and recommendations from the Cullen Commission of Inquiry into Money Laundering in BC.
The Commission was established in May 2019 to examine the extent of money laundering in BC. Areas of focus included real estate, as well as the gaming sector, financial institutions, the corporate sector, lawyers and notaries, accountants, luxury goods and virtual assets. Last year, former BCREA Chief Executive Officer Darlene Hyde and Chief Economist Brendon Ogmundson represented BC’s real estate boards and Realtors by participating in the inquiry to provide context and insight into the functions of the real estate sector.
In the final report, Commissioner Austin Cullen recommends the creation of a provincial anti-money laundering unit and changes to FINTRAC. Additionally, the Commissioner was unable to find a link between money laundering in real estate and housing unaffordability.
“The commissioner’s findings, after more than a year of study, show that the volume of money laundering in our province is ‘enormous’ is profoundly concerning,” said BC Attorney General and Minister Responsible for Housing David Eby.
Read more about the findings and recommendations:
Focus on real estate
One of the many areas of focus of the inquiry and final report was money laundering in real estate.
In addition to finding no link between housing prices and money laundering, Commissioner Cullen highlighted that “the real estate sector is highly vulnerable to money laundering.” He also wrote that REALTORS®:
- have a poor record of anti-money laundering reporting and compliance;
- display an inadequate understanding of, and hold misplaced beliefs about, how money laundering occurs in the real estate industry;
- are confused about how to comply with their federal anti-money laundering obligations; and that
- most real estate agents and brokers have no background in compliance or anti-money laundering measures, and there is significant frustration in the industry about the lack of guidance.
The report was also critical of FINTRAC, Canada’s financial intelligence unit, saying that “law enforcement bodies in BC cannot rely on FINTRAC to produce timely, useful intelligence about money laundering.” As a solution, Commissioner Cullen called for the “need for clear, simple guidance from FINTRAC about when transactions must be reported.”
BCREA continued advocacy
We know Realtors, as members of the public and trusted advisors for consumers are concerned about money laundering in real estate and your frustrations around the difficulties of the current compliance requirements. As BCREA continues to review and analyze the report and its findings, we will inform you of developments that impact your day-to-day work and the future of the profession.
We will also continue to advocate for more transparency and collaboration with the real estate sector from regulatory bodies to ensure that any changes to anti-money laundering requirements for Realtors are effective and created with careful consideration for the nuances of the real estate transaction and the protection of Realtors and their clients.
If you have questions about the Cullen Commission, email [email protected].
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