Whether buying or selling a home, your Real Estate representative will ask you to provide legal (government issued) identification such as your drivers license, birth certificate or similar documentation. In addition, you may be asked if you are acting on behalf of a third party. This measure of requesting client identification is a fairly new requirement.
FINTRAC (The Financial Transactions and Report Analysis Centre of Canada) was developed by the Canadian government as an initiative to fight money laundering and terrorist financing both in Canada and abroad.
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) legally requires all businesses such as Real Estate Brokerages, Insurance companies, Banks, etc. to provide client identification information; regardless of how well you know the client you are providing service to. Yes, even family members must provide this information. This ensures that the financial institutions, etc. can adhere to their legal obligations and sustain the battle against money laundering and terrorist financing.
Money laundering is when criminals disguise the source of money or assets acquired by illegal activities such as drug trafficking, fraud, extortion, smuggling, etc. The techniques used are countless and can be quite highly developed. In fact, the yearly estimate of this criminal activity, as determined by the International Monetary Fund (IMF), adds up to five hundred billion U.S. dollars being laundered globally every year.
Terrorist financing is somewhat different than Money laundering as it allows a means for terrorist activities which represents a major threat to worldwide security including Canada and Canadians. Many terrorist groups obtain a flow of funds through legal avenues as well as through criminal activities. Charity organizations have been known to unintentionally be donating funds that are ultimately channelled to terrorist organizations.
Money laundering and terrorist financing is a substantial concern; we must do our part to eliminate it.