Effective June 23, 2008, the new FINTRAC legislation takes effect.  The legislation sets out that effective June 23, 2008, when REALTORS® receive funds in any form and any amount, we must keep a receipt of funds record and identify the client who gave or provided us the funds.

Here is an overview, based on the information provided to me from FINTRAC, OREA, and TREB at the time of this posting.

• Every broker office has to have a "Compliance Officer"
• The compliance program and office policies have to be in writing.
• There is a significant increase in client ID and record keeping requirements.
• There is the introduction of reporting suspicious "attempted" transactions.
• Record keeping is now required for ALL receipts of funds.
• A broker must identify and verify the identification of third parties and beneficial owners to a transaction.
• A broker must also have verified identification for offshore buyers, and do that by using approved "agents".
• Once every 2 years a broker must complete a self-assessment of risk of being implicated in money laundering or terrorist financing situations because of their real estate business, and identify what measures must be taken to reduce the risk.

So how does this affect the typical Real Estate Transaction?

All clients (buyers and sellers) will have to show ID and it must be recorded in the form of Name, Address, Date of birth, occupation, and the type of ID shown, recording the number on the original identification issued by the government.  Photocopies are not necessary.  In Ontario, Provincial Health cards are not accepted.

Privacy issues
The requirement that REALTORS® confirm identification also increases a REALTOR®'s responsibility
under the Personal Information Protection and Electronic Documents Act (PIPEDA). The antimoney
laundering legislation has now defined a new category of information which it deems
"necessary" for the purposes identified.
The advice CREA has always given to REALTORS® is that they should be diligent in collecting
only the information absolutely necessary for the transaction, based on the premise that the
more information you collect, the greater your exposure in terms of adequately protecting it and
ensuring there is no further unauthorized disclosure.
Principle 7 of PIPEDA and the Privacy Code requires REALTORS® to protect information with
safeguards appropriate to the sensitivity of the information. Tools used to confirm identification -
such as drivers licenses, health cards, or other government issued identification - are all sensitive
and require the highest form of protection.
It is the responsibility of the REALTOR® to protect that personal information collected as part
of the FINTRAC compliance process against loss, theft, unauthorized access, disclosure or
copying.

CLICK ON FINTRAC to read all the regulations for yourself.  

And please do not be alarmed when I ask you for ID on our first meeting.

Cheers,

Brian Matthews

Sales Representative

Re/Max West Realty Inc., Brokerage