Saturday, April 2, 2016

China leading 'Suspicious Transactions' in Vancouver

Between January, 2012, and July, 2015, financial institutions in Vancouver, Richmond, West Vancouver and North Vancouver reported more than 8,600 suspicious transactions to the Financial Transactions and Reports Analysis Centre of Canada. (FinTRAC)

The vast majority – 5,895 – do not include the citizenship of the clients. 1,660 of the transactions were tied to Canadian citizens. In the remaining 1,045 reports, 865 transactions in accounts belonged to Mainland Chinese. Chinese citizens cannot legally transfer more than $50,000 (U.S.) a year out of China without government permission. The next largest group was from Hong Kong, at 50, and then 43 involving Taiwan.
Despite the legal requirement to disclose such transactions, Canadian banks still process them and do not have to shut down the accounts. The numbers add weight to suggestions that international money is having a trickle-down effect on the affordability in Greater Vancouver’s real estate market, where the average price of a detached home reached $1.58-million in November.
A B.C. Supreme Court case last year heard that CIBC regularly helped rich clients bring money out of China. The transactions used to avoid the law should trigger the bank’s obligation to report them as suspicious, even though no Canadian laws are broken.

FinTRAC says it passed along 1,260 pieces of evidence to police last year, with 1,000 related to money-laundering investigations. In fiscal 2015, it received a total of 92,531 suspicious transaction reports – generally defined as transfers of $10,000 or more into or out of Canada. That marked an increase of more than 13 per cent from the previous year.

Police say Chinese nationals buying property in Canada often can't be tied to crime. They do question if the banks should continue making money by facilitating such suspicious transactions.

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