Thank you, Mr. Chair.
I'm Dina McNeil, Director of Government Relations at the Canadian Real Estate Association, or CREA. I'm joined today by Simon Parham, one of CREA's in-house legal counsel. We would like to thank the committee for the opportunity to participate in the five-year review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Our membership is made up of more than 125,000 real estate brokers and agents across the country. The Canadian Real Estate Association, or CREA for short, is one of Canada's largest single-industry trade associations. We work on behalf of our members, as well as homebuyers and the public.
Given the size, importance, and stability of the real estate sector in this country, we understand why investors from around the world would be drawn to investing in real estate in Canada. We recognize that CREA and its members have a role to play in Canada's money laundering and terrorist financing regime. We continue to work with FINTRAC to improve guidance and create conditions conducive to realtors complying with the existing obligations. We communicate regularly with our members on the importance of complying with the law. We do this by delivering in-person or online presentations across the country, and by sharing comprehensive, updated information through articles, blogs, monthly newsletters, and email communications.
CREA also provides valuable tools such as FAQs and template compliance manuals and forms to facilitate record keeping and to help with the reporting obligations of our members. Most importantly, realtors and their brokerage offices from across this country do their part by trying their best to comply with Canada's money laundering and terrorist financing regime. They maintain complex, detailed compliance regimes and conduct a myriad of regulatory paperwork that FINTRAC requires, but that ultimately never sees the light of day.
That said, we do have concerns with the law and the application of the law as it stands today. As this committee has heard from other witnesses, money laundering and terrorist financing activities are highly intricate and complex, and are often difficult to recognize and detect. Many different actors and parties are involved in real estate transactions and we believe they should all have a role to play in combatting money laundering and terrorist financing.
However, we are concerned about the reporting and record keeping obligations, which cause a significant burden on realtors. It is not just a matter of reporting suspicious transactions to FINTRAC. Members have to keep various records and create a detailed compliance regime. This involves identifying a compliance officer, developing and maintaining compliance policies and procedures, conducting risk assessments of business activities and relationships, creating and maintaining a written ongoing compliance training program, and conducting an effectiveness review to test the compliance of the program every two years. The regulatory burden is significant and many brokers and agents try their best, but are frustrated, confused, and at a loss at how to keep up with the overwhelming requirements.
We feel that insufficient attention is being paid to the regulatory burden and compliance costs. Many realtors operate small businesses and have minimal expertise in analyzing money laundering indicators. Additionally, changes to the regulations and guidance are frequent and at times unclear, which makes it difficult for small business owners to keep up. We feel that implementing new requirements around beneficial ownership and politically exposed persons would cause significant frustration and increase the cost of compliance drastically. CREA would like to see a stable legislative and regulatory environment—