Humber/Ontario Real Estate Course 4 Exam Practice

Real Estate Agent Smith receives a cheque of $12,000 as a deposit from a client and suspects possible involvement in money laundering. What action should Agent Smith take?

1. Report this transaction to FINTRAC as suspicious.

2. Report the $12,000 deposit as it is a large cash transaction to FINTRAC.

3. Inform FINTRAC under the procedures for terrorist property reporting.

4. Report to FINTRAC as a 'Money Laundering Confirmation'.

The correct answer is: Report this transaction to FINTRAC as suspicious.

Agent Smith should report the transaction as suspicious because this is a crucial step in ensuring compliance with the regulations set forth by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). When an agent suspects that a transaction may be linked to money laundering, it is essential to initiate a report to alert the authorities without delay. This action allows FINTRAC to investigate the transaction further. Money laundering is a serious concern in the real estate industry, particularly given the potential for high-value assets to be used for illicit purposes. By reporting the suspicion rather than waiting for confirmation of wrongdoing, Agent Smith is adhering to legal obligations and contributing to the broader efforts in combating financial crimes. In contrast, simply noting the size of the deposit or categorizing it under different reporting frameworks, such as those for cash transactions or terrorist property, does not adequately address the suspicion that prompted Agent Smith's concerns in the first place. A direct report of suspicion is the most appropriate and responsible response in this scenario.