These new legislative requirements are the results of international efforts by the governments to curb money-laundering activity, which began at the 1989 G7 Summit in Paris, continued throughout the 1990s, and escalated dramatically following the terrorist attacks on New York City in September of 2001.

The result of this activity led to the creation of an intergovernmental body in 1990 called the Financial Actional Task Force, or FATF, an organization of 35 member countries including Canada. This international body sets global legislative and regulatory standards for member countries in order to assist them in developing frameworks to better combat the financing of criminal and/or terrorist financing activity.

Canada introduced the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) in early 2002. This legislation was accompanied by new regulations requiring targeted industries, including real estate, to implement client identification and record keeping requirements. That was the first phase.

In 2003, FATF issued 40 new countermeasures on money laundering and 9 special recommendations on terrorist financing to its member governments, and asked that they update their legislative and regulatory framework in order to better monitor and track suspicious financial transactions.

In response to this call, the Government of Canada developed and issued a consultation paper to all affected parties in July of 2005. This document contained proposals designed to address these international requirements. CREA reviewed the consultation paper, and recognized that Canadian REALTORS were being incorrectly categorized as financial intermediaries, and that a number of the proposed changes would prove difficult, if not virtually impossible, to comply with.

As a result of this preliminary review, the Canadian Real Estate Associaton created a Money Laundering Task Force to represent the interests of REALTORS during the design phase of the regulatory process, and to aggressively advocate for the removal of unneccesary elements within the proposed recommendations. Due to the hardwork of this Task Force, the real estate industry now has regulations to comply with that are possible to manage.

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