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ANSWERS has sold to the public (other than in the capacity of a real estate broker or sales representative): • five or more new houses or condominium units; • one or more new commercial or industrial buildings; • one or more new multi-unit residential buildings each of which contains five or more residential units; or • two or more new multi-unit residential buildings that together contain five or more residential units. 1 Furthermore, once you meet the definition of a "real estate developer" you will always be considered a real estate devel- oper and must comply with the Act whenever you engage in the sale of a new house, condominium unit, commercial build- ing, industrial building, or multi-unit residential building to the public from that point forward (unless there is a substantial and permanent change to your operations). 2 B. FINTRAC. The regulations to the Act require real estate developers to report any "suspicious transaction" to FINTRAC within 30 days of the fact that gave rise to the suspi- cion. A suspicious transaction is one in which there are reason- able grounds to suspect that the transaction (whether it has been completed or is in progress) is related to money laundering or a terrorist activity financing offence. FINTRAC is Canada's financial intelligence unit responsible for analyzing and disclos- ing financial information and intelligence on suspected money laundering and terrorist activities financing, and the agency responsible for collecting information under and ensuring com- pliance with the Act. scribed sale transaction, as described earlier. However, there are exceptions, such as: • you do not have to keep a receipt of funds record or client information record if you sell the new building to a public body (provincial or federal department, Crown agency, an incorporated municipality or a hospital authority) or a very large corporation (a company with minimum net assets of $75 million with shares traded on a Canadian stock exchange or an exchange outside Canada designated by the Minister of Finance, and that is operated in a country 3 E. ALL OF THE ABOVE. Real estate developers must complete all of these items when engaged in a pre- TRUE. A real estate developer is defined under the Act as any person or entity who, in a given calendar year after 2007 that is a member of the Financial Action Task Force), • you do not have to submit a "large cash transaction report" if the cash is received from a public body or finan- cial institution, and • if you use a real estate broker or sales representative (that is not your employee) to sell your building, it becomes the obligation of the broker or sales representative to col- lect the necessary information and report to FINTRAC as required under the Act. The items listed in this question are only short summaries of the types of information that real estate developers are required to obtain and maintain; for further details please refer to Guideline 6B – Record Keeping and Client Identification for Real Estate available on FINTRAC's website (www.fintrac.gc.ca). of $10,000 CDN (or its equivalent in foreign currency) or more in cash. This includes receipt of 2 or more cash transactions by or on behalf of the same client within 24 hours that add up to $10,000 or more. 4 5 NO. All real estate developers must implement a compli- ance regime that includes: • appointment of a compliance officer; • development and implementation of written compliance policies and procedures; • assessment and documentation of the areas in which you are particularly at risk for money laundering and the mea- sures you will take to mitigate these high risk areas, and the development of methods to conduct ongoing monitor- ing of these areas; • implementation of an ongoing compliance training pro- gram for employees and agents; and • ongoing reviews of the effectiveness of the various ele- ments of the regime (i.e. every 2 years). YOUR RANKING? nOne or fewer correct: Might be time to brush up nTwo or three correct: Not bad, but could do better. nFour or five correct: Impressive. A. $10,000. Real estate developers must submit a large cash transaction report to FINTRAC within 15 days of receipt way to attract attention? it's easy. Looking for an easier JIL_CL_Aug_08.indd 1 12 • FEBRUARY 2009 INHOUSE 7/15/08 10:18:45 AM