INDIVIDUAL CLIENT IDENTIFICATION
Other
Q: What should a brokerage do if a client absolutely refuses to provide the information required to complete either the Identification Information Record or the Receipt of Funds form?
A: The strict legal position is that a failure to identify a client, for any reason, would place the broker in non-compliance with the FINTRAC rules. However, FINTRAC has stated that whether penalties are invoked for such a failure depends upon a complete analysis of a broker’s compliance history as well as their office compliance systems. It is entirely at a member’s discretion whether or not to proceed with such transactions and, if a member does proceed, FINTRAC advises that the member should submit a Suspicious Attempted Transaction Report.
Q: Should our Board take a listing where the personal information required for FINTRAC compliance has not been given?
INDIVIDUAL CLIENT IDENTIFICATION
Q: What should a brokerage do if a client absolutely refuses to provide the information required to complete either the Identification Information Record or the Receipt of Funds form?
A: The strict legal position is that a failure to identify a client, for any reason, would place the broker in non-compliance with the FINTRAC rules. However, FINTRAC has stated that whether penalties are invoked for such a failure depends upon a complete analysis of a broker’s compliance history as well as their office compliance systems. It is entirely at a member’s discretion whether or not to proceed with such transactions and, if a member does proceed, FINTRAC advises that the member should submit a Suspicious Attempted Transaction Report.
Q: Should our Board take a listing where the personal information required for FINTRAC compliance has not been given?
A: The issue of collecting personal identification information for a Record is an obligation of the broker or agent, who are required by law to comply. There is no role for the Board in ensuring that Records are properly completed.
Q: If a client refuses to disclose his personal information for the Individual Information Record, can I simply get the client to stroke off that part of the form and initial it?
A: No – you would be in contravention of the law. All relevant information required by the Records must be provided.
Q: If a husband and wife are co-purchasing a property, and both names will be on title, do you need to ID both persons?
A: Yes, the client identification requirement under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and Regulations specify that you need to identify every person who conducts the transaction. Therefore, in the case of a husband and wife co-purchasing a property, you would need to keep a client information record of both individuals. Whether the information is on separate forms or one form is up to the REALTOR®, to determine which internal process/procedure suits them best.
Q: Do I have to make or keep a photocopy of whatever document my client provides for ID?
A: You do not need a photocopy of the client’s ID for Canadian customers, just the critical information on it. It is recommended that you obtain a copy of the foreign client’s ID when documenting their information.
Q: Buyer & Seller are in Canada, face-to-face, and no mandatary involved. Earlier documents seemed to indicate that, in this situation, photocopies of ID were a requirement. The new commentaries seem to say that photocopy is only recommended. Is this correct? Following from that, Passports & Visas were mentioned as being necessary at one point. It now seems that we do not need anything like that, just the equivalent of what we would take from a Canadian citizen. Again, is this correct and where can I find clarification on this point on the site?
A: You are correct in saying that photocopies of identification documents are not necessary when verifying your client’s identity face-to-face. REALTORS® are simply required to record the requisite information in the client Identification Information Record. However, CREA does recommend that a copy of the client’s identification be retained if you are dealing with a foreign client.
A government issued piece of ID with a unique identifier number can be used to verify the identity of an individual client, including a non-Canadian. A passport would be a sufficient piece of ID; however, there are a number of different pieces of identification will also meet this requirement. If the identification document is from a foreign jurisdiction, it must be the equivalent to an acceptable Canadian document.
