Two years after a land ownership transparency registry was introduced in B.C. to help combat money laundering and tax evasion, it is now finally in full force.
Still, it will likely take more time, perhaps years, for the usefulness of the registry to be tested and proven, say those whose regulatory and policing work could benefit from the registry.
“It’s very helpful to have this,” said Ron Usher, general counsel for the Society of Notaries Public of B.C. “But stay tuned. It will be three of four years before a real evaluation is done.”
A B.C. government-commissioned expert panel on money laundering in real estate concluded in its 2019 report that disclosing beneficial ownership of property was the single most important measure that can be taken to combat money laundering.
Legislation was passed in B.C. the same year to create the first-of-its-kind registry in Canada.
Starting in November 2020, companies, trusts, partnership and others who purchased property in B.C., where property ownership was not clear, had to file reports to reveal the true or beneficial owners. That information is placed in the new registry.
However, existing owners of property were given a one-year extension because of the COVID-19 pandemic and to give them more time to gather the necessary information to file with the registry.
That deadline was Nov. 30.
The public has access to basic information in the registry, but police and regulators have access to broader information including property owners’ citizenship, social insurance numbers and addresses.
As of Nov. 30, there had been 9,421 public searches and 98 searches by authorities such as regulators or law enforcement, according to information supplied to Postmedia by B.C.’s Finance Ministry.
However, authorities can also use the public search function and may be represented in those numbers, say ministry officials.
It is not clear whether all pre-existing owners who would be required to do so have now filed. That determination will take long-term analysis and is complex, as there are many different possible types of reporting bodies and different exemptions, said ministry officials.
So far, 58,301 pre-existing owners have filed reports involving 144,908 individual properties.
“These are still early days for the registry, but when it matures it will be a powerful tool we can use to close tax loopholes, fight tax evasion and help stop money laundering,” says B.C. Finance Minister Selina Robinson.
Money laundering has been a hot-button issue in B.C. in the past several years, with far-reaching implications for the economy, the law, policing and trust in institutions.
The B.C. NDP government commissioned several independent reports and launched a public commission into money laundering headed by B.C. Supreme Court Justice Austin Cullen that delivered its recommendations this summer.
Postmedia News investigations put a spotlight on money laundering. Between 2017 and 2019 its probes revealed that at least $43 million in properties were tied to B.C.’s largest money-laundering investigation.
A Postmedia analysis of 12 money-laundering cases dating back nearly three decades found money is laundered in real estate using a number of mechanisms, often with the help of shell companies and involving several countries and banks.
The B.C. Securities Commission said it expects the new registry will be useful for intelligence gathering for investigations into investment market misconduct or in efforts to collect penalties issued by tribunals.
“However, because the deadline to file was extended to Nov. 30, a lot of ownership information was only entered in the last few weeks. As a result, its usefulness to the BCSC has been limited for the time being,” Commission spokeswoman Andrea Ross said in a written statement.
The Combined Forces Special Enforcement Unit in B.C., which investigates organized crime, would not answer questions directly about the usefulness of the registry.
But CFSEU spokeswoman Sgt. Brenda Winpenny said law enforcement can access many different databases that assist in complex investigations such as money laundering.
The Law Society of B.C., which has disciplinary oversight of lawyers, said it expects searches of the new registry to be useful in its investigations.
Now that the deadline has passed, those that do not file when they are required to do so face penalties of up to $25,000 for an individual, $50,000 for a corporation or five per cent of the assessed value of the property — whichever is greater.
The province has said that if people are working in good faith to meet a requirement, enforcement officers can exercise discretion in applying fines.
Usher, the general counsel for the Society of Notaries Public of B.C., gave full credit to the Land Title and Survey Authority of B.C. for getting the transparency registry off the ground.
He said that to be effective, there will have to resources expended to monitor and enforce the requirements of the registry.
And to be useful, resources will also need to be expended to mine the data that is being produced, whether by the province itself or by regulators and policing authorities, he said.