Posted on May 21, 2015
In recent weeks we have seen a number of national and regional media reports describing two significant money-laundering schemes that pose a significant risk to Canadian reporting entities, including dealers in precious metals and stones.
Specifically, we have seen reports regarding:
· A rise in the amount and frequency of undeclared currency seized from travelers attempting to enter Canada; and
· Reports suggesting a sharp increase in the number of foreign investors converting proceeds of crime earned abroad into commercial and residential real estate in the Vancouver market.
In many cases the source of the money as well as the citizenship of the investors and travelers can be traced to China.
There are a number of reasons why China is experiencing a spike in capital flight. One of the reasons involves the aggressive crackdown on corruption and money laundering by the Chinese government. China is seizing and forfeiting assets at a brisk pace prompting some Chinese to illegally convert and conceal their criminal assets abroad. Politically exposed Chinese and their relatives living in Canada are feeling the pressure. In fact, the mother of Vancouver Mayor Gregor Robertson’s girlfriend was recently arrested in China on corruption-related criminal charges.
Another reason has to do with the increased difficulty of transferring money internationally undetected through financial institutions. The robust anti-money laundering regimes of financial institutions is causing alternative money laundering schemes, such as cash smuggling, and investment in real estate and precious metals and stones to become more appealing.
Dealers in precious metals and stones should be aware of this trend and apply this awareness to their risk assessment of customer transactions.
To read more on these trends check out:
For more information on your building and maintaining your FINTRAC anti-money laundering compliance program contact Clarium Fraud and Compliance Solutions Ltd.