Public ownership registry would obstruct money launderers

by Neil Sharma15 May 2019

By creating a publicly accessible ownership registry, laundering money through real estate would become immensely harder, according to the C.D. Howe Institute.

“Anonymity and invisibility could be reduced by implementing a publicly accessible registry of beneficial ownership of companies, trusts and real estate,” Kevin Comeau, author of Why We Fail to Catch Money Launderers 99.9 Percent of the Time, said in a statement.

“Structured properly, a public registry would offer a two-way flow of information—communication of beneficial ownership information to the world and communication of foreign-based information to Canadian authorities—which would bring more bad guys into the light of day.

Only information pertaining to beneficial ownership of companies, trusts and real estate would be publicly available, while only a registrar could access sensitive material like passport numbers or full residential addresses.

Calum Ross, a leverage wealth expert and VERICO broker with Mortgage Management Group—and author of The Real Estate Retirement Plan: An Investment and Lifestyle Solution for Canadians—says a public registry shouldn’t even be the subject of debate.

“It won’t completely prevent money laundering from happening, but it would make it significantly more difficult and, therefore, draw more attention to it,” he said. “The key reason money laundering is done through corporations is because if I look up the property, it only comes up with a number rather than a name. The real question I’d ask is what are we gaining by not having this information disclosed?

“When I went to speak at U.S. banking conferences, this came up and they thought we were crazy here in Canada. I was asked, ‘Is money laundering not a problem for you in Canada? Why wouldn’t such information be disclosed?’”

British Columbia is taking steps to implement a beneficial ownership registry. After broad consultations, the provincial government introduced a bill on April 1 that went through a second reading a couple of weeks ago. It is expected to pass before the legislative session ends at the end of the month.

Norma Miller, a senior policy analyst with the British Columbia Real Estate Association, noted that a beneficial ownership registry alone wouldn’t curb money laundering, but as a part of a comprehensive solution it would be integral.

“A key one for us is smart regulation,” said Miller. “Make connections between the federal and provincial governments, and their agencies, because money laundering is hard to piece together and if you don’t have that coordinated effort, it’s not the best use of government funds. We also want to see FINTRAC [Financial Transactions and Reports Analysis Centre of Canada] offering data to the public, but also data that’s consistent and easy to understand, and to provide timely feedback to professionals who have to report to them, like realtors.”

 

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