Canadian city councillor wants background checks for property developers

KUALA LUMPUR (Jan 30): A councillor from the Canadian city of Vancouver wants more stringent checks on the backgrounds of those applying for property development permits, The Edge Malaysia reported.

Such an exercise can reveal if “they are linked to financial crime cases or wanted in other jurisdictions”, said councillor Melissa De Genova

“It’s a tool that I believe can be used to combat money laundering and the flow of suspected illicit funds through Vancouver’s real estate and property development industry,” De Genova told the weekly.

“It’s also a tool that can help potential development permit applicants clear their name if they have outstanding allegations against them in other jurisdictions,” she added.

According to the weekly’s report, an estimated that C$5.3 billion (RM16.7 billion), mainly foreign cash, “was laundered through real estate in the province of British Columbia, with most of it funnelling through Vancouver”.

De Genova had also filed a motion to “increase efforts at City Hall to combat money laundering”, resulting in Vancouver no longer accepting cash payments of over C$10,000

“I was seeing people with large amounts of cash coming to City Hall to pay fees, taxes and fines, and there was no identification requirement.  

“It was quite troubling to see that the people paying these large amounts in cash did not have to provide any ID or explain the source of funds,” she said.

It was also reported that “a majority of the suspicious transactions took place in Vancouver, which contributed to increasing the cost of buying a home in the province by at least 5%”.

Former RCMP deputy commissioner Peter German said “know-your-client” processes “are fundamental to transparency and foundational to conducting due diligence”.

German explained that municipalities can “look at internal processes” such as “determining sources of funds for procurement contracts and seek legal opinions as to what extent they have the authority to vet the people seeking development permits”.

“Vancouver is leading the way on this issue as the council is really concerned as to what they can do to combat money laundering,” he added.

“The volume of investments in property in the Greater Vancouver area has been unprecedented, causing different reactions by Canadians. This is not unique to Canada, many other countries have had the same experience,” Vancouver-based global compliance specialist, Kim Marsh told The Edge.

“Large-scale property development projects often include multiple investors. It is imperative when conducting anti-money laundering due diligence, that the source of funds is researched as well as the source of wealth,” Marsh added.

Read the full report in this week’s The Edge Malaysia

Get the latest news @ www.EdgeProp.my

Subscribe to our Telegram channel for the latest stories and updates 

Click here for more property stories