Fintrac removed reference to ‘ethnic communities’ in draft document for industry

Fintrac removed 'ethnic communities' reference

TORONTO — Canada’s money-laundering watchdog drafted a document warning the real estate sector to be on guard for “specific ethnic communities” dealing with terrorism and war, before removing the reference at the behest of an industry association, documents show.

Correspondence between Fintrac and the Canadian Real Estate Association, obtained by The Canadian Press through an Access to Information request, shows that the industry group was concerned that the reference would encourage agents to stop doing business with people based on their ethnicity.

The draft guidance document was aimed at helping companies meet their obligations to detect money laundering and terrorist financing.

It lists several examples of factors that may increase a company’s risk of becoming entangled in financial crimes, including dealing with “a specific ethnic community that is currently dealing with specific events (e.g. prevalence of terrorism or money laundering, war, etc.) in the home country.”

Such a reference would constitute a violation of the Human Rights Act, the real estate association said in its letter.

“Canadians are rightly proud of the Human Rights Act, and especially in this day and age when we see what’s happening south of the border,” said CREA spokesman Randall McCauley.

“Our lawyers would have rightly pointed out or reminded Fintrac that no Canadian can discriminate against another or deny access to a service based on where they’re from.”

The federal agency says it was not referring to any particular ethnic community in the document.

“The intent of the guidance was to highlight, broadly, that regulated businesses may deal with clients that have a material connection to high-risk jurisdictions or other jurisdictions that are currently dealing with specific events, including terrorism or money laundering, war, a high level of corruption, or organized crime,” Fintrac spokeswoman Renee Bercier said in an email.

“Fintrac chose to remove the terminology as it recognized the potential for misinterpretation and misrepresentation.”

Companies in certain sectors — including banks, casinos and real estate firms — are legally required to identify their clients, keep records and report suspicious or large cash transactions to Fintrac. They are also required to assess their exposure to money laundering and terrorism financing risk.

Canada’s real estate sector has become an area of particular concern after a report released last fall by the Paris-based Financial Action Take Force said it is susceptible to the illegal dumping of cash.

Fintrac provided CREA with the draft of its guidance document in 2014.

In a letter to Fintrac dated Dec. 23, 2014, CREA calls the reference to ethnicity in the document “inappropriate,” particularly if read alongside another section of the guide that encourages companies to introduce measures that can be used to terminate business relationships, a process referred to as “de-marketing.”

“If this guidance were followed it could result in realtor members being liable for violating human rights law,” the letter reads, before going on to cite Sec. 5 of Canada’s Human Rights Act.

That section says it is a discriminatory practice to deny access to any good, service, facility or accommodation to someone for any of the prohibited grounds of discrimination.

In a response letter dated Feb. 6, 2015, Fintrac says it opted to remove the references to ethnicity and de-marketing.

The reference to ethnicity — and the decision to remove it — illustrates just how controversial the issue has become in the debate over foreign capital flowing into Canada’s real estate market.

Thomas Davidoff, an associate professor at the University of British Columbia’s Sauder School of Business, says affordability concerns in markets like Vancouver and Toronto have in some cases resulted in ethnic divisions.

“People get their underwear in a bunch when they’re feeling threatened about having a roof over their head,” says Davidoff.

For instance, reports of money flowing into Vancouver’s housing market from China have resulted in some Vancouverites blaming the Chinese for pricing them out of the market for single-family, detached homes, says Davidoff.

“Politicians and government needs to protect citizens while being tolerant and encouraging people to behave decently towards other people,” he said. “That can be a challenge.”

 

Follow @alexposadzki on Twitter.

Alexandra Posadzki, The Canadian Press

Canadian Press

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

QUIZ: Do you know what’s on TV?

Fall is normally the time when new television shows are released

COVID-19 outbreak declared at Calvary Chapel Kelowna

Attendees of the Sept. 13 morning church service may have been exposed, Interior Health says

Unofficial holidays: Here’s what people are celebrating for the week of Sept. 27 to Oct. 3

World Farm Animals Day, Drink Beer Day and Virus Appreciation Day are all coming up this week

Kelowna man injured during arrest sues RCMP

Supreme Court civil claim alleges Dustin Blondin was the victim of an ‘unprovoked attack’

United Way celebrates seven decades of impact in Southern Interior

Organization sees issues with poverty, mental health and addictions, heighten during the pandemic

B.C. records 98 more COVID-19 cases, most in Lower Mainland

One new senior home outbreak, Surrey Memorial outbreak over

End of CERB means uncertainty for some, new system for others

As of a week ago, the CERB had paid out $79.3 billion to 8.8 million people

West Kelowna Warriors complete sweep of Vernon Vipers

Warriors edge Snakes 2-1 as Okanagan Cup BCHL exhibition tournament begins

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Horgan, Wilkinson trade barbs over MSP premiums, health care at campaign stops

Horgan called a snap election for Oct. 24 earlier this week

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Public input sharpens vision of Oyama Ithmus Park

Proposed project to shape the long-term future of waterfront land in Lake Country

PHOTOS: Ghost sighting in Vernon’s Polson Park

Mom and daughter photoshoot brings joy and laughter to bystanders

Most Read