@*@ Header
The Vancouver and surrounding area real estate market has been overheated for years. Much anecdotal eveidence says Chinese buyers are fuelling the skyrocketing costs. In addition to overheated housing, recnt large scale deals involving Chinese buyers include of 232 acres in the Port Moody-Anmore area, the purchase of a downtown Vancouver hotel, office buildings and the Westwood Golf and Country Club.

The Vancouver and surrounding area real estate market has been overheated for years. Much anecdotal eveidence says Chinese buyers are fuelling the skyrocketing costs. In addition to overheated housing, recnt large scale deals involving Chinese buyers include of 232 acres in the Port Moody-Anmore area, the purchase of a downtown Vancouver hotel, office buildings and the Westwood Golf and Country Club.
Photo Credit: CBC

Chinese money laundering in Canadian real estate?

A new report for the government agency that tracks money laundering says the overly hot real estate market in Canadian cities has a “significant risk”  for criminal activity.

In Canada, professionals and businesses are required to report cash transactions of 10,000 dollars or more, as well as report on anything they find suspicious.

The report focuses on the Vancouver market where a great deal of offshore money is used to purchase real estate.

The Financial Transactions and Reports Analysis Centre of Canada, commonly known as FINTRAC, commissioned a study by a Toronto accounting firm to investigate all reporting sectors in 2014, but to concentrate on real estate. The report says real estate is seen as a higher risk for money laundering than all other areas including casinos, banks, and money-wiring services (all of which have to file reports to FINTRAC).

“The purchase of Canadian real estate assets with offshore money and or by offshore persons was noted as a significant risk factor,” a summary of the report noted.

Quoted in the National Post news service, a Fintrac official said, “We have significantly increased our examinations in the Vancouver area. Our compliance people are not happy.”

Earlier this year, Chinese buyers paid about a million dollars for the British Columbia ghost town of Bradian with a view to creating a huge ski reort/ housing development in the mountains near Lillooet
Earlier this year, Chinese buyers paid about a million dollars for the British Columbia ghost town of Bradian with a view to creating a huge ski reort/ housing development in the mountains near Lillooet © John Lovelace Real Estate Team

FINTRAC noted that between January 2012 to June 2015, it received only eight reports from Vancouver area brokers, sales reps, and real estate agencies involving large cash transactions or suspicious deals. These involved two cash deals, and five suspicious real estate deals..

This does not agree with anecdotal reports of many large cash transactions taking place.

Additionally, in that same time period, Fintrac noted that financial institutions in the Vancouver area reported  127,804 large cash transactions, and 8,246 suspicious transactions. Even at that Fintrac noted that banks are under-reporting by not scrutinized real estate deals they are involved with.

Additionally, the Canadian Border Services Agency, reports that in all of North America, Vancouver airport leads in seizures of unreported cash being brought in by Chinese citizens. Between June 2012 and June 2015, some 10 million dollars in undeclared funds was discovered on incoming passengers. However most of it was later returned to the Chinese.  The National Post writes that experts they spoke to say this represents a fraction of the illicit money pouring into the Vancouver real-estate market in the wake of a anti-corruption crackdown in China.

Realtors who deal with many Chinese clients say they believe they are complying with Fintrac rules, adding they file client-broker information based on what they are told and say it’s up to Fintrac to determine what is true or false.

Quoted in the (Vancouver) Province newspaper, one realtor noted, “It would be very easy to fool an agent. We are busy by nature and we live off commissions. How much time would you spend investigating identity, profession, and source of income?”

Kenneth (Kim) Marsh is a vice-president with IPSA International, a company that works with foreign governments and banks to recover funds and investigate fraud.

He told CBC news that he has recently been hired by a number of defrauded Chinese banks trying to track down cash laundered into the markets in Vancouver.

“I’ve seen a number of cases now where large amounts of high-end real estate have been purchased over a short period of time, and people are on the run”, adding thats the Canadian real estate market has developed a reputation as place to launder money.

Marsh says there is a danger the flight of cash out of China may intensify with current turmoil in the country’s economy and stock market

There are about 100,000 realtors licenced in Canada but an official noted that Fintrac has only charged seven realtors with infractions, fining them about 10,000 each.

On March 31, Canada’s former ambassador to China, David Mulroney, told a University of British Columbia audience, “There is a significant problem with Chinese officials who are absconding with state funds, and there’s a massive international manhunt,” adding “China is the No. 1 exporter of hot money in the world.”

In addition to the anti-corruption crackdown in China, the state is trying to recover over 1-trillion dollars estimated to have been illegally taken out of the country during the last ten years.

with files from CBC, Business Vancouver, Sam Cooper-National Post

Tagged with: , , ,
Posted in Economy, Immigration & Refuge, International, Politics

Do you want to report an error or a typo? Click here!

@*@ Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

 characters available

Note: By submitting your comments, you acknowledge that Radio Canada International has the right to reproduce, broadcast and publicize those comments or any part thereof in any manner whatsoever. Radio Canada International does not endorse any of the views posted. Your comments will be pre-moderated and published if they meet netiquette guidelines.

Netiquette »

When you express your personal opinion in an online forum, you must be as courteous as if you were speaking with someone face-to-face. Insults and personal attacks will not be tolerated. To disagree with an opinion, an idea or an event is one thing, but to show disrespect for other people is quite another. Great minds don’t always think alike—and that’s precisely what makes online dialogue so interesting and valuable.

Netiquette is the set of rules of conduct governing how you should behave when communicating via the Internet. Before you post a message to a blog or forum, it’s important to read and understand these rules. Otherwise, you may be banned from posting.

  1. RCInet.ca’s online forums are not anonymous. Users must register, and give their full name and place of residence, which are displayed alongside each of their comments. RCInet.ca reserves the right not to publish comments if there is any doubt as to the identity of their author.
  2. Assuming the identity of another person with intent to mislead or cause harm is a serious infraction that may result in the offender being banned.
  3. RCInet.ca’s online forums are open to everyone, without regard to age, ethnic origin, religion, gender or sexual orientation.
  4. Comments that are defamatory, hateful, racist, xenophobic, sexist, or that disparage an ethnic origin, religious affiliation or age group will not be published.
  5. In online speak, writing in ALL CAPS is considered yelling, and may be interpreted as aggressive behaviour, which is unpleasant for the people reading. Any message containing one or more words in all caps (except for initialisms and acronyms) will be rejected, as will any message containing one or more words in bold, italic or underlined characters.
  6. Use of vulgar, obscene or objectionable language is prohibited. Forums are public places and your comments could offend some users. People who use inappropriate language will be banned.
  7. Mutual respect is essential among users. Insulting, threatening or harassing another user is prohibited. You can express your disagreement with an idea without attacking anyone.
  8. Exchanging arguments and opposing views is a key component of healthy debate, but it should not turn into a dialogue or private discussion between two users who address each other without regard for the other participants. Messages of this type will not be posted.
  9. Radio Canada International publishes contents in five languages. The language used in the forums has to be the same as the contents we publish. The usage of other languages, with the exception of some words, is forbidden. Messages that are off-topic will not be published.
  10. Making repetitive posts disrupts the flow of discussions and will not be tolerated.
  11. Adding images or any other type of file to comments is forbidden. Including hyperlinks to other websites is allowed, as long as they comply with netiquette. Radio Canada International  is in no way responsible for the content of such sites, however.
  12. Copying and pasting text written by someone else, even if you credit the author, is unacceptable if that text makes up the majority of your comment.
  13. Posting any type of advertising or call to action, in any form, to Radio Canada International  forums is prohibited.
  14. All comments and other types of content are moderated before publication. Radio Canada International  reserves the right to refuse any comment for publication.
  15. Radio Canada International  reserves the right to close a forum at any time, without notice.
  16. Radio Canada International  reserves the right to amend this code of conduct (netiquette) at any time, without notice.
  17. By participating in its online forums, you allow Radio Canada International to publish your comments on the web for an indefinite time. This also implies that these messages will be indexed by Internet search engines.
  18. Radio Canada International has no obligation to remove your messages from the web if one day you request it. We invite you to carefully consider your comments and the consequences of their posting.

*