Money Laundering Bigger Problem then Anticipated

According to a report Combating Money Laundering in B.C. Real Estate by Maureen Maloney approximately $46.7 billion was laundered through Canada’s economy in 2018. While also stating the “dirty money” isn’t new to the Province of British Columbia and that it needs to be addressed on a nationwide scale.

I believe there was from $90 billion to $110 billion laundered, be the figure small or large, it is still considered to be an increasing issue which needs to be solved as soon as possible. Especially before we find ourselves amid another financial crisis, with an impact far greater.

Canada is one of the top first world countries as a destination for easy money laundering. This is mainly due to regulations not being as strict and transparent. Now the country is involved with large sums of “dirty money” rolling through the economy for the past few years and continuing on the rise unless the Government of Canada decides to step up and provide solutions.

In British Columbia, the housing market has sky rocketed from “dirty money” and purchases of luxury cars have been a craze for the past couple of years mainly due to that same sequence of mondey laundering.

Unfortunately, Canada does not require a public registry of beneficial ownership and therefore it does not have one in place at all. Indicated in the report by Maloney, much of the funds for these pruchases originated from corrupt regimes, such as Russia, China and several middle eastern countries.

When luxury cars are bought, the dealership is not required to report large transactions (including cash). There is no investigation done into these transactions even if it was a large international wire transfer. On top of this there is a provincial tax rebate for vehicles to be exported and sold in other countries.

The money launderers are taking full advantage of this, the numbers from 2014 to 2016 rise in rebate claims to an astounding 3,674% and from 2016 to 2018 to an additional 121.18%. This is summing up to approximately $85 million in taxes which has been refunded to money launderers.

Due to this increase, more staff was hired to process the rebate requests instead of utilizing the resources to investigate and stricken the regulations and policies around purchase of luxury cars.

If nothing is done to stricken anti-money laundering laws and regulations in Canada, we will be seeing another financial crisis very soon.