Humber/Ontario Real Estate Course 3 Exam Practice

What qualifies a transaction as suspicious under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act?

1. A terrorist group must be involved with the transaction.

2. The real estate salesperson or broker must have seen the client with a significant amount of cash in possession.

3. The sum of money involved must be $10,000 or more.

4. The real estate professional must assess various factors and establish reasonable grounds for suspicion.

5. The transaction must involve international banks.

6. The money must be exchanged multiple times in short periods.

The correct answer is: The real estate professional must assess various factors and establish reasonable grounds for suspicion.

A transaction is considered suspicious under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act when a real estate professional assesses various factors and establishes reasonable grounds for suspicion. This is an essential component of the act, as it places the onus on professionals in the industry to remain vigilant and aware of potentially illicit activities. Suspicious transactions can arise from a range of indicators, such as unusual patterns of behavior, inconsistent information from clients, or transactions that appear to lack a legitimate purpose. By encouraging professionals to conduct a thoughtful assessment of the scenario, the legislation aims to combat money laundering and terrorist financing effectively. While other factors might raise concerns (such as large sums of money or involvement of international banks), these alone do not automatically classify a transaction as suspicious. The emphasis is on the professional's judgment and their ability to identify red flags based on a comprehensive understanding of their client's activities and the transaction's context. This approach ensures that targeted scrutiny is applied where it's most warranted, maintaining the integrity of the real estate market.