Chinese money launderers snap up Vancouver real estate because of lenient border laws, loose regulations

Vancouver International Airport is the major port of entry for millions in hidden cash being smuggled into North America by mostly Chinese citizens, a federal document investigation by The Province reveals.

And according to money laundering investigators, the amounts identified in Canada Border Service Agency cash seizure data, obtained by The Province under freedom of information law, is only the tip of the iceberg.

Experts said Vancouver appears to be targeted by Chinese citizens because Canada’s forgiving border laws allow seized cash to be returned for minimal fines. As well, permissive property investment rules and loose reporting compliance in the real estate industry make Vancouver homes the perfect vehicle for illicit offshore investment.

“A lot of the illicit money coming into Canada from Chinese citizens is laundered through real estate in Vancouver,” Hayley Labbé, a senior forensic investigator with the firm MNP LLP, told The Province.

The Province obtained CBSA data months after undertaking a wide-ranging federal document search to learn more about China’s anti-graft initiatives such as Operation Fox Hunt and SkyNet — the aggressive crackdowns by the Communist Party of China on political corruption suspects.

Co-operation between China and Canada in the hunt for numerous suspects who have allegedly fled to Canada with ill-gotten gains is controversial, because of many differences between the two countries’ legal systems.

But The Province obtained several documents that indicate co-operation is increasing.

A variety of Canadian agencies cited national security or China’s diplomatic privilege as a reason not to release information; for example, CSIS and the CBSA refused to confirm or deny the existence of certain documents.

But the CBSA did release rare data on seizures of undeclared assets brought to Canada by foreign travellers.

The data shows customs agents at Vancouver and Toronto airports seized $15,019,891 in either undeclared cash or monetary instruments from 869 Chinese nationals from June 2012 to December 2014.

About $10 million — the majority of undeclared assets seized by the CBSA from Chinese citizens in the period — was taken at YVR.

CBSA data reviewed by The Province suggests that YVR has been the major port of entry for undeclared asset seizures in Canada since 2011, accounting for roughly 30 per cent of the total seizures across Canada’s hundreds of border entries in a typical year.

And YVR accounted for more than half the money seized from Chinese citizens entering Canada in this period. In total, the CBSA seized $17.4 million from Chinese nationals, in 976 seizures. That was four times more than the undeclared assets seized from U.S. citizens entering Canada.

Across Canada, $56.3 million was seized by CBSA agents from all travellers from June 2012 to Dec. 2014 — including $19.4 million seized from Canadians. These Canadian citizens do not all reside in Canada, the CBSA said. Recent data shows about 60 per cent of all undeclared money seized at YVR is from Chinese citizens — about five times the rate of money seized from Canadian travellers.

The situation is similar in the United States, but also shows that Vancouver is North America’s primary entry for illicit money from China. Data reported by U.S. customs officials five years ago shows that undeclared cash taken from Chinese nationals was double any other foreign nationality.

But amazingly, a comparison from a similar time frame shows cash seized from Chinese citizens at YVR was about double the amount taken from Chinese nationals at all U.S airports combined.

http://www.theprovince.com/travel/Chinese+money+launderers+snap+Vancouver+real+estate+because+lenient+border+laws+loose+regulations/11262931/story.html