Suspicious transactions tied to foreign buyers

by |
Vancouver-based banks reported more suspicious applications coming from mainland China than any other country.

Banks are required to report any suspicious activity to the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC), and the Globe and Mail received that data through an access of information act. It shows that Vancouver banks reported suspicious transactions originating from mainland China 17 times more often than transactions originating from any other country.

According to the Globe’s findings, financial institutions in Vancouver, Richmond, West Vancouver, and North Vancouver, reported more than 8,600 suspicious transactions to FinTRAC between January 2012 and July 2015.

Of those transactions, 5,895 came from unknown origin and 1,660 were made by Canadian citizens.

Of the remaining 1,045 flagged transactions, 83% (865 reports) came from mainland China.
These reports are purportedly triggered when the sum is larger than $10,000, when third parties send frequent wire transfers to clients, or when multiple deposits from someone other than the account holder are made.

Attorney Christine Duhaime told the Globe that while it could not be determined whether the incoming suspicious funds were used to purchase real estate, one could “surmise pretty accurately that if the funds are from China and involve large volumes, they are for real estate purchases, because there is not much else foreign nationals from China buy in Canada that would trigger a [suspicious transaction report].”

Potential money laundering in Canadian real estate – including from China – has been a topic of growing interest.

The FinTRAC data publication comes on the heels of a recently released CMHC report on the amount of foreign condo investment in Vancouver and Toronto.

Foreign condo owners own 3.5% of units in Vancouver and 3.3% in Toronto; up from 2.3% and 2.4% a year ago, respectively.

The methodology is somewhat incomplete but a step in the right direction in determining how much those major markets are being influenced by foreign money.
  • Joss Covenoho on 2015-12-10 10:34:13 AM

    This is an extremely misleading title, suggesting that the Chinese conduct suspicious activity, in order to gain a public response to stop the Chinese from the overrated price increases and from owning so much Canadian land. Only once you read further into the ad, do you see that transfers over $10,000 do not IMMEDIATELY indicate crime or money laundering, that $10,000 is simply the trigger. The Chinese are CASH people, they trade heavily in cash, which throws Canada off, both culturally and technically.

  • Cinzia on 2015-12-10 2:22:45 PM

    Perhaps we should focus on Canadians. The number of suspicious transactions by Canadian citizens is double those from China. Inflammatory headlines are great. As long as they're accurate.

  • G on 2015-12-10 10:15:45 PM

    What an insult and disgrace that Canada enforces "moneylaundering" laws against subjects of a Communist dictatorship with an abominable human rights record that starts with 2,500 acknowledged executions a year.

    But, wait, our new Vogue PM is on record as singling out China as the country he most admires in the world "because their basic dictatorship is allowing them to actually turn their economy around on a dime and say 'we need to go green fastest . . . we need to start investing in solar.' I mean there is a flexibility that I know Stephen Harper must dream about of having a dictatorship that he can do everything he wanted that I find quite interesting."

    Can't wait to see his worship of Xi Jingping when they meet. Maybe a firm personal assurance that Canada will fully cooperate in tracking down criminals who dare to send their money out of the People's Republic.

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions