Provincial agencies collaborating in the crackdown on Chinese money laundering
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The Ministry of the Attorney General of British Columbia announced late last week that it will be clamping down on alleged money laundering by foreign nationals in the province’s casinos.
The move came in the wake of a previous recommendation that called for an in-depth investigation of possible fraudulent activity and manipulation by unscrupulous Chinese and other foreign criminal elements in B.C.’s real estate, horse racing, and luxury car segments.
“There is good reason to believe the bulk of the cash we saw in casinos is a fraction of the cash generated through illicit activities that may be circulating in British Columbia’s economy,” David Eby told Bloomberg.
“We cannot ignore red flags that came out of the casino reviews of connections between individuals bringing bulk cash to casinos, and our real estate market,” he added. “I have great confidence that findings from the probe we are launching will give a great picture on how criminals are profiting from our system and how we can do our best to eradicate money laundering.”
In concert with these efforts, Finance Minister Carole James has assigned a panel of experts to scrutinize laundering in B.C.’s real estate markets.
“Our goal is simple, as you’ve heard: Get dirty money out of our housing market,” James said. “When the real estate market is vulnerable to illicit activity and unethical behavior, people, our communities and our economies suffer. This is something we have to tackle.”
Both agencies’ examinations are set to be completed by March 2019.
Read more: B.C. real estate particularly vulnerable to money laundering – FINTRAC
A report released early last month by the C.D. Howe Institute argued that Canada’s less-than-optimal regulatory regime – which allows for hidden ownership of real estate and other assets – has made the nation especially vulnerable to money laundering by foreign nationals.
Former FINTRAC deputy director and report author Denis Meunier warned that the ease in registering corporations – often used as facades by criminal organizations engaged in corruption, tax evasion, and drug trafficking – is a particular area of weakness.
“[The average Canadian] must provide a government approved photo identification to obtain a bank account, library card or official documents such as a passport and driver’s licence,” Meunier wrote in the report, as quoted by Global News. “No such scrutiny is placed on the beneficial owners of corporations or parties to a trust.”
Official estimates noted that these factors are helping foreign crime elements launder $5 billion up to as much as $100 billion every year.
