People encouraged to speak up and offer suggestions and solutions regarding a central registry
Enough talk—it’s time for action.
(But first, more talk.)
The government of British Columbia has been outspoken on anti-money laundering measures, particularly after more than $7 billion was discovered to have been “washed” through the province, $5 billion of which had gone through real estate.
This week, British Columbians have been invited to take part in public engagements on creating a central registry of company beneficial ownership, as well as modernizing mortgage broker regulation to guard against money laundering.
“Money laundering in our economy must end,” said Carole James, Minister of Finance. “These consultations are an opportunity for the public to voice concerns around how we can prevent dirty money from coming into our communities through these channels and create a better, safer British Columbia.”
The consultations reflect key recommendations from the Expert Panel on Money Laundering in B.C. Real Estate, which released its Combating Money Laundering report in May 2019. In its landmark report, the panel identified the disclosure of beneficial ownership as the single most important measure that can be taken to combat money laundering.
The Mortgage Broker Act (MBA) is under review because, as the consultation paper reads, “it has not kept pace with evolving national and international standards such as money laundering in the real estate market.”
As such, the purpose of the consultation is to replace the MBA with “modern legislation” that would establish several requirements, including: business authorization for all mortgage lenders; dedicated compliance management as well as compliance requirements for employees; licensing standards; minimum standards of conduct; and transparency and disclosure within transactions. Also on the table are enhanced disclosure and reporting requirements for complex products and reducing regulatory gaps.
In addressing these, the Ministry of Finance hopes to achieve its goal of “a regulatory framework that helps to ensure British Columbians continue to benefit from a financial services sector that is strong, stable, and inspires public confidence and trust.”
The government has already begun a beneficial land ownership registry for real estate, launching in spring 2020. The Land Owner Transparency Act will create Canada’s first beneficial land ownership registry for real estate, and as of May 1, 2020, all B.C. private companies will be required to keep transparency registers of beneficial owners within their records offices.
Consultation topics include: a government-maintained transparency registry, public access to said registry, the protection of personal information, the verification of beneficial ownership information; compliance and enforcement; and a transparency register for other entities. The goal is to determine how a potential registry will impact businesses as well as determine ways of streamlining the process, whether B.C. registries should be linked to other entities, the role of government in ensuring that information is correctly reported, and what penalties should apply for being non-compliant, among others.
The registry is intended to help give tax auditors, law enforcement agencies and federal and provincial regulators the information required to conduct their investigations. In the report, James also indicated that it will help those government agencies to crack down on tax frauds and those engaged in money laundering.
“When the price of real estate grows because of the influx of dirty money, it pushes costs above what local incomes can support. From the young family struggling to purchase a home to the small businesses unable to attract talented employees, everyone is affected by money laundering,” she wrote. “Our work to stamp out money laundering is limited by a lack of data, including information on beneficial ownership in corporations and in real estate. That’s why the Expert Panel has made several recommendations to improve data collection and data sharing — including Recommendation 5, which suggests consultation on a full corporate beneficial ownership registry consistent with best practices.”
Feedback for both consultations will be accepted until 4 p.m. PT on March 13, 2020.
