Feds Lax On Real Estate Sector Compliance With Anti-Money Laundering Law:

Ottawa must strengthen its efforts to combat money laundering in real estate, critics say that the documents revealed that dozens of companies have not shown how they are trying to detect suspicious transactions.

The Canadian Press reported this week that at least 85 companies not compliance plans flag suspicious transactions are fully implemented - including cases where money laundering is suspected - nearly 15 years after it was legally obliged to do so.

"We can have the best rules around holding money laundering out of our real estate market, but if no one enforces the rules, what are they?" said David Eby, a spokesman for NDP housing in BC, where some said the housing market is particularly susceptible to money laundering.

"The Realtors seem to have rules or reporting obligations seriously and Fintrac (Financial Transactions and Reports Analysis Centre of Canada) does not seem too concerned when they see the mass of non-compliance."

Fintrac data obtained through a request for access to information show that 38 companies had partially implemented a compliance regime, while another 47 did not have. The names of the companies are not included in the documents.

Data were collected from 337 reports of conformity assessment that were submitted to the federal agency to combat money laundering of about 1000 companies in the real estate sector. It's just a tape throughout the industry - there are about 20,000 real estate companies supervised by Fintrac.

Darren Gibb, Fintrac spokesman, said reports of conformity assessment are only one tool the agency uses in its execution process.

 Fintrac uses data collected from compliance reports to significantly increase the number of on-site inspections is done in the real estate sector, he said.

He has also spent "much time and effort" in collaboration with the real estate sector and the Canadian Association of real estate to help real estate agents understand their obligations under the Proceeds of Crime (best money laundering) and financing terrorism, Gibb said.

But Christine Duhaime, a specialist in the fight against money laundering and the financing of the fight against terrorism lawyer, said most real estate agents who knew had no compliance plan, no compliance officer and do not know what or how a suspicious transaction report.

"I literally have never met a real estate agent across the country who really understands and complies with AML (money laundering) with full rights," Duhaime said.

The Real Estate Council of Ontario said remind its members of their legal obligations following the report of the Canadian press.

Cams Exam Quesiton No 40

Question No 40:

When drafting an AML policy, which of the following internal parties is most important to have approve the policy?

A. Senior management.
B. The audit department.
C. The sales team management.
D. The operational staff management.

Answer: A

Casino Industry Discusses Anti-Money-Laundering Efforts

Industry Players casinos in Las Vegas gathered to discuss ways to keep companies can be used for money laundering.

About 400 personalities have attended Law Conference last week Bank Secrecy, Inc. Informo Vegas.

They spoke as the government and the private sector could work more is the prevention efforts.

A Working Group of government and industry leaders to share information might help, said Chris Warrener, FBI Criminal Investigation division assistant director.

He said the government would get a knowledge of the problems m More direct in some areas, while providing the context for casinos.

"I hope we go the direction," said Warrener.

Attendees also discussed the challenges faced by casinos, is that if they face a mayor A Regulatory pressure. The Conference Center is located in the LMA MEAN Tanto applies to all casinos, REGARDLESS Do Size.

Caesar Palace, the House Nugget Casino has been fined in recent years in Antigua. Las Vegas Sands Corp. promised Millions of years ago Put A final paragraph Investigation of Money Laundering. It was recently announced Fined partially related to this payment.

"If you are in Las Vegas, Nevada, Emeryville, California, Sparks, Pahrump, where - crimes occur, and sometimes people go to Las Spending Illegals: casino winnings" said attorney Jeffrey Setness. "There should be a big casino. You will always have the same kind of requirements."

Cams Exam Quesiton No 39

Question No 39:

When conducting training for AML purposes for account opening staff, which of the following addresses the most important aspects to consider in the training?

A. What the employees need to do, the importance of AML efforts and the penalties for non-compliance.
B. The governmental AML bodies, what the employees need to do and the importance of AML efforts.
C. The penalties for non-compliance, the governmental AML bodies, and what employees need to do.
D. The importance of AML efforts, the governmental AML bodies and the penalties for non-compliance.

Answer: A

Cyprus Needs an Anti-Money Laundering Champion

Back in 2012, organizational change and leadership expert Marina Theodotou and I co-wrote a report of PwC entitled "Professional Services: driving growth and employment in Cyprus". (positive) impact of the sector on employment and growth of the economy and as a reference point both in Cyprus as a place to do business and as an innovative analyzed. analysis "SWOT" (identifying strengths, weaknesses, opportunities and threats) and monitoring for the government, the private sector and industry representatives was held.

One of the main risks that "the loss of favorable tax system was stressed. We cite the risk, he flatly denied at the time that the troika would require an increase in the tax rate of 10% of businesses in 12, 5% (as it did quickly a few months later), the introduction of a common tax base at European level is proposed, the European Commission relaunched in mid-2015, and the risk of a tax on financial transactions.

We also highlight the risk of excessive concentration in a market (Russia) and said: "In the future, Cyprus may have to be distinguished not by its tax system, but only on the basis of the quality of their service."

Fast forward to 2016 and we can add global precipitation Papers leak Panama as another major risk for the sector, for two main reasons.

The first is related to the global appetite of voters. Clearly public support, not only for the suppression of money laundering and tax evasion, but what has so far been perfectly legal tax planning, too. This could be the next target for British Prime Minister David Cameron, after hosting the summit against corruption this week.

Combine the difficulties in creating tax structures with a common tax base for companies (pushed through if the UK left the EU, perhaps) and it will be a major setback for professional services in Cyprus.

The impact on the economy as a whole can not be ignored. The two combined sectors account for almost 16% of GDP in 2015. This makes them larger than the direct contribution of tourism.

International Banks Risk Aversion

The second risk relates to how international banks Panama gather documents.

Just this week, the Financial Times reported that Barclays, Deutsche Bank and UBS have decided to close their accounts at 25,000-30,000 divisions of corporate and investment banking.

The FT said the closure of the accounts of the company showed banks are becoming more aggressive, "either because they are considered too risky under the rules of the fight against money laundering or because it was no longer profitable to light of the new regulations. "

Last month, Deutsche Bank has also ceased to be a correspondent bank for transactions in euros with BCR Cyprus. The decision was taken before the escape of paper and Panama RCB Cyprus "categorically denies" any link with Panama documents.

But Deutsche Bank was already becoming extremely careful. Its own internal investigation this year (after the issues raised by a Cypriot bank probably doing due diligence correctly) said a "systemic" failure internal controls and a "pattern of possible money laundering".

Other big banks are also struggling with reputation. UBS was indicted by a Belgian court in February to money laundering and serious and organized tax fraud (which denies the charges). Barclays paid a fine of £ 72m at the end of last year, when the Financial Conduct Authority UK found that could be used for money laundering.

Before this attack, one can imagine what the mantra is as international banks these days: "If it sounds risky, download it."

The opportunity for Cyprus

This brings me to the possibility that Cyprus and the need for a national champion.

In this new world order, only survive squeaky clean. Cyprus has done much in recent years to improve its record of compliance, in letter and in practice.

Of the 10 areas covered by the OECD in its strict "second peer review" late last year, Cyprus has been found fully compliant at seven and "largely compliant" in three areas. This puts Cyprus ahead of Luxembourg (fully compliant to five), the same level as Germany, the Netherlands and the United Kingdom (also seven) but behind Malta (eight) and Ireland (10).

The only problem is that no one is aware. I know this because of the flow of foreign journalists who come knocking on my door every year with nothing but money laundering in their minds. As for (which are mostly NATO countries), Russia is bad, so the Russian business should mean money laundering.

One reason knows that Cyprus was cleaning his act is because there are many agencies in the fight against money laundering: the Institute of Chartered Accountants of Cyprus (ICPAC / SELK), the Securities and Exchange Commission of Cyprus (CySEC) the Central Bank of Cyprus, the Bar, and, of course, MOKAS, the money anti-laundering unit in the attorney general's office.

A Single Record And With One Voice

There is no single record of what they did, who were fined, closed, or the withdrawal of licenses.

It's time their efforts were gathered in one place and saved, shared with one that meets foreign journalists, politicians and potential investors in their daily lives, then shouted to the four winds for everyone with an interest in promoting investment in Cyprus.

This work should not drop regulators and supervisors mentioned above could be interpreted as a conflict of interest. However, there is a body that has investments in Cyprus as its main objective, namely investments Agency Cyprus (CIPA).

The work done is too important to leave to the younger ones. It only needs a persuasive champion with the following qualities:

• A impeccable reputation.
• Strong sales skills to convince a skeptical international audience.
• A background in the area so he or she can identify the remaining weaknesses.
• The diplomatic skills to pressure the government and the sector silently make the necessary changes.

In case you think I put forward the requirement of a fund in the sector excluded me. But there must be someone out there.

Cams Exam Quesiton No 38

Question No 38:

Which of the following controls would most effectively minimize the need to correct failures to collect required customer information in the account opening process?

A. A quality review staff that checks paper applications to ensure all fields are complete.
B. An automated account opening platform that requires data entry prior to allowing the account to be opened.
C. Requiring that a manager review and approve all new account applications.
D. Documenting a procedure that sets forth the steps required to open an account.

Answer: B

Cams Exam Quesiton No 37

Question No 37:

A financial institution is looking to establish an online account opening service. The institution plans to offer this product to new and existing customers within the country. Which of the following would be the best plan of action for an AML specialist to recommend enabling the institution to verify the customer's identity?

A. Do not offer the product, as it is too high risk as the customer cannot be seen to verify their identity.
B. Require all customers to send a copy of valid photo identification to the institution.
C. Ensure that the institution has a reliable third party source that will enable verification of the customer.
D. Allow customers to enter required information, but require all customers to come to the institution in person for verification.

Answer: C

Review Recommends Anti-Money Laundering Rules for Real Estate

Last year, the global regulatory agency against money laundering - the working group Paris-based Financial Action Task Force (FATF) - has published a critical report emphasizing that residential property in Australia is a haven for the international money laundering, particularly China, and recommended that Australia implement countermeasures to ensure that real estate agents, lawyers and accountants to facilitate property transactions are captured by the regulatory network.

FATF conclusions are saved by the statements of operations in Australia and Analysis Centre (AUSTRAC), who warned that "launder illicit funds through real estate is a method of money laundering created in Australia".

In 2003, Australia decided to carry out money laundering (AML) comprehensive regulation that captured accountants, lawyers, real estate agents and other non-financial companies. However, the second phase of the reform to the fight against money laundering and terrorist financing in 2006, which would have captured these non-financial guards, remained in limbo for a decade, yet has not been implemented by the government. All attempts to adopt legislative measures were put in the "too hard basket" for our policy makers and delayed indefinitely.

As noted last year by Nathan Lynch analysts regulations head for Australia and New Zealand in Thomson Reuters

"AUSTRAC surveillance efforts ... are being frustrated by the fact that money launderers often use unregulated entities as a" first contact point "to help hide the source of funding. If a criminal is a cash deposit suspect in an account of real estate agent or a trusted lawyer, for example, the suspicious transaction need not be reported to AUSTRAC. entities such as banks reporting are required to report these transactions in three days business after the formation of a suspicion. lawyers are not required to report transactions threshold under the legacy of financial transactions Act 1988, no suspicious questions, reports, leaving no realtors reporting obligations ".

Moreover, Lynch said that "politicians were obviously evasive about its commitment of both parties to go through a second tranche of the [AML law] ... the politicians are willing to turn a blind eye."

On Friday, the legislative review of the fight against money laundering and terrorism Financing Act 2006 was published, which among other things provides for the extension of the fight against money laundering (AML) for non-financial guards as real estate agents, lawyers and accountants:

Real estate can be a useful channel for criminals wishing to launder illicit funds for a number of reasons. Criminals can buy a property with large amounts of money, live on the property, renovate the property (the use of illicit money) to increase their value and sell the property at a later date for a capital gain. The last actual ownership of the property can also easily hide.

The increase in the value of real estate market of Australia in recent years has increased the attractiveness of Australia as a place to invest illicit wealth, with high value properties that offer ideal for washing large amounts of illicit funds opportunities. This is particularly the case following the global financial crisis that Australia, with its relatively stable economy, is considered a country that is "safe" to invest or hide the criminal wealth.

AUSTRAC released a policy report in 2015 which highlights some of the common methods of laundering money through real estate, including:

• The use of third parties to buy properties
• The use of loans and mortgages (for example, criminals take a mortgage to buy a property and pay off the mortgage with cash lump sum)
• Property values ​​management (ie, criminals buy and sell real estate at a price above or below market value)
• structuring cash deposits to purchase real estate (ie, criminals money deposit below the registration threshold AUD10,000 to different banks and then use these deposits to get a cashier's check to purchase a property)
• The purchase and rental properties, but provide illicit funds tenant to pay rent
• Buying a property using illegal funds with the intention of carrying out other criminal activities in the property, and
• Uing illicit funds to renovate the properties.

Cases have been identified in Australia, where estate agents have made cash payments significant for vacation properties (some of which were subsequently used for criminal purposes, such as laboratories or storage of weapons of drugs firearms or drugs) in deposits for the sale of goods or cash bonuses to the seller in exchange for a lower selling price of the contract ...

There are other conditions that make the investment of illegal funds in the attractive Australian property sector, including lack of AML / CTF DNFPBs regulations that facilitate real estate transactions, reducing the risk that the customer's identity or source of funds for questioning, and eliminates the risk that the transaction will be reported to AUSTRAC.

Recently there has been much attention in buying real estate in Australia by foreign buyers who try to hide their identity. The House of Representatives Standing Committee on Economics considered this issue in 2014 and recommended that the government is considering the purchase of a residential property by foreign investors as a possible area of ​​research for this review.

Addressing the risk of ML / FT posed by DNFPBs

DNFBPs not regulated under / CTF Act ALD generates a large gap in the AML / CFT regime in Australia that provides opportunities for criminals to abuse the DNFPBs services to launder illicit funds. ..

The extent of AML / CFT regulation to the remaining DNFBPs deliver a number of important benefits:

• A current "blind spot" regulator would be eliminated and a wider range of information collected and reported to AUSTRAC, and shared with police
• Suspicions about transactions would be communicated earlier in the chain of transactions taking place today, providing opportunities for the application of principles to disrupt criminal activities and
• More detailed information about the recipient of the funds and assets are collected when the complex legal structures were first established.

This expanded database AUSTRAC would generate financial information to better help the police to "follow the money" fight against serious and organized crime and protect national security of Australia. Australia also become more hostile to threats of ML / FT, improve the integrity and credibility of financial institutions in Australia and the financial system, increase the attractiveness of Australia as a place to do business and align the scheme in force / AML CTF with the FATF standards ...

Recommendation 4.6

AUSTRAC Department and the Attorney General, in consultation with industry, should:
a) Develop options for the regulation of lawyers, conveyancers, accountants, dealers in high-value, real estate agents and providers of trust and company service under the AML / CFT Act, and
b) Conduct a cost-benefit analysis of regulatory options to regulate lawyers, accountants, valuable brokers, real estate agents and trusted vendors and business services under the AML / CTF Act.