FINTRAC Client Identification in Real Estate

FINTRAC Real Estate

Client Identification

• Who is a client?: A person or entity that purchases or sells a property, or any other person or entity that is involved in a real estate transaction.
• Identifying clients: Real estate agents, brokers, and developers must identify clients before facilitating a transaction.
• Required information: Clients must provide identification, including:
  • Name
  • Address
  • Date of birth
  • Occupation
  • Identification numbers (e.g. driver's license, passport)

Reporting Suspicious Transactions

• What is a suspicious transaction?: A transaction that is suspected to be related to money laundering or terrorist financing.
• Reporting requirements: Real estate agents, brokers, and developers must report suspicious transactions to FINTRAC within 3 days.
• Reporting criteria: A transaction is considered suspicious if:
  • It is unusual or does not make sense
  • It is conducted in a way that is not typical for the industry
  • The client is unwilling to provide information or is evasive

Record Keeping

• Record keeping requirements: Real estate agents, brokers, and developers must keep records of all transactions, including:
  • Client identification information
  • Transaction details (e.g. date, amount, property information)
  • Records of suspicious transactions and reports made to FINTRAC
• Record retention: Records must be kept for at least 5 years from the date of the transaction.
• Record format: Records can be kept in electronic or paper format, but must be easily accessible and retrievable.

FINTRAC Real Estate

Client Identification

• A client is a person or entity involved in a real estate transaction, including buyers, sellers, or others facilitating a transaction.
• Real estate agents, brokers, and developers must identify clients before facilitating a transaction.
• Clients must provide identification information, including name, address, date of birth, occupation, and identification numbers (e.g. driver's license, passport).

Reporting Suspicious Transactions

• A suspicious transaction is one suspected to be related to money laundering or terrorist financing.
• Real estate agents, brokers, and developers must report suspicious transactions to FINTRAC within 3 days.
• A transaction is considered suspicious if it is unusual, does not make sense, is conducted in an unusual way, or if the client is unwilling to provide information or is evasive.

Record Keeping

• Real estate agents, brokers, and developers must keep records of all transactions, including client identification information, transaction details (e.g. date, amount, property information), and records of suspicious transactions and reports made to FINTRAC.
• Records must be kept for at least 5 years from the date of the transaction.
• Records can be kept in electronic or paper format, but must be easily accessible and retrievable.

FINTRAC Real Estate Regulations

Client Identification

• Real estate agents, brokers, and developers must identify clients, including individuals and entities, through government-issued ID and corporate records.
• Client information to be recorded and verified includes name, date of birth, address, occupation, and purpose of transaction.

Reporting Suspicious Transactions

• Real estate agents, brokers, and developers must report suspicious transactions to FINTRAC, including transactions exceeding $10,000 in cash, and those related to money laundering or terrorist financing.
• Reports must be submitted to FINTRAC within 3 days of the suspicious transaction.

Record Keeping

• Real estate agents, brokers, and developers must maintain records of client information, transactions, suspicious transactions, and measures taken to prevent money laundering and terrorist financing.
• Records must be retained for at least 5 years from the date of the transaction.

Sanctions and Penalties

• Failure to comply with FINTRAC regulations can result in administrative monetary penalties (AMPs), criminal penalties, and revocation of licenses.
• AMPs can range from $500 to $500,000 per violation.

AML Obligations

• Real estate agents, brokers, and developers must implement an anti-money laundering (AML) program, including risk assessment, client identification, ongoing monitoring, and reporting of suspicious transactions.
• Employees must receive training on AML obligations and procedures.