Automotive News Canada - June 2018 - v2 - 8

* JUNE 2018

Cash-reporting rule
proposed for Vancouver
luxury dealers
Currency payments
over $10,000 would
be tracked in an
effort to prevent
money laundering
By STEVE MERTL

VA N C O U V E R C O R R E S P O N D E N T

VANCOUVER - A BRITISH
Columbia government effort to
crack down on criminal money
laundering could ensnare
Vancouver-area luxury auto
dealers.
A report by Vancouver lawyer Peter German submitted
to Attorney General David
Eby on ways to combat money
laundering includes a recommendation that high-end dealers report all-cash sales to the
Financial Transactions and
Reports Analysis Centre of
Canada (FINTRAC), which
monitors banking and other
transactions to reveal criminal or terrorism-funding activities.
German's report identifies

Vancouver's high-end dealers
as potential money-laundering
points:
"Geographic targeting
orders for auto dealers: The
criminal lifestyle is often
attracted to expensive consumer goods, such as luxury cars,
and due to their high value,
these items can also be used to
reintroduce illegal cash to the
legitimate economy. Currently,
there is no tracking by government of cash purchases for
luxury items. As Vancouver
is Canada's luxury-car capital,
a geographic targeting order
could require the submission of
suspicious transaction reports
and large cash transaction
reports by motor-vehicle dealers in Greater Vancouver, but
not in other parts of the country. However, to avoid displacing local buyers to other jurisdictions, another option may be
to provide a reporting threshold higher than $10,000 for
these industries."
Finance Canada, which
oversees FINTRAC, is reviewing its money-laundering and
anti-terrorist financing regime.

Morris Lubinich, general
manager of McLaren
Vancouver, tells customers
to "get a bank draft" instead
of trying to pay with cash.
PHOTO: STEVE MERTL

A discussion paper identifies "high-value goods dealers"
as vulnerable to exploitation
for money-laundering purposes. It notes the United States
and United Kingdom already
include them in their report-

Online SALES Training

Vancouver and manager of
Pfaff Motors leasing, said it
reports any deposits over
FEWER CASH DEALS
$10,000 to its bank and discourages large cash sums in
Eby appeared before the
any deal.
Commons finance committee
"Cash in the car business is
in March to discuss German's
never a good thing," Lubinich
recommendations. His office
said. "I would say, 'Go get a
declined an interview request
bank draft.'"
until the report is made pubMoney-laundering expert
lic.
Garry Clement said that when
It looked at ways illiche ran the RCMP's national
it cash is recycled into the
proceeds-of-crime unit (now
economy, especially casino
defunct) he frequently came
gambling and real estate, but
across dealers willing to do
noted criminals also buy luxury vehicles with cash both as all-cash transactions.
Generally these were not
status symbols and to flip.
branded-automaker stores,
The Attorney General's
said Clement, who consulted
Ministry said the number of
on German's report.
cash transactions has been
"They may be basically a
declining since 2000.
used-car dealer selling highData provided by
end cars, accepting cash all
DesRosiers Automotive
the time," he told Automotive
Consultants show only 8.1 per
News Canada.
cent of new vehicle deals last
A number of Ottawa-area
year were all-cash, down from
17.1 per cent in 2010. Some 15.1 branded dealerships joined
Clement's volunper cent of usedtary anti-money
car deals last
laundering proyear were cash.
gram, with mer"The impact
chants agreeing
of cash-reporting
to report large
requirements is
cash deals to his
likely to be miniunit.
mal as a per cent
"Their goal
of total sales," a
was not to take
ministry spokesit at all, to make
man said via
them [the buyers]
email. "Most
go and get a bank
cash buyers likedraft," he said.
ly bring a bank
GARRY CLEMENT
FINTRAC
draft or other
A money-laundering
said dealerships
means of paying,
expert, commenting
are not reportnot actual cash."
on money-laundering
ing entities under
It's not clear
enforcement
current legislahow widespread
tion but can still
such deals are.
provide information volunLuxury automakers appear to
tarily on transactions they
discourage them.
deem suspicious.
Mercedes-Benz Canada,
Clement said he supports
which owns most of its stores,
the B.C. recommendation, but
allows no more than $10,000
FINTRAC's efforts to identify
in cash for any transaction.
money laundering have been
Porsche Cars Canada spokesundercut by a lack of enforceman Patrick Saint-Pierre said
the automaker does not accept ment and prosecution.
"We've done an abhorcash but added that Porsche
rent job in the last decade,"
Centres are independent busihe said. "There has to be folnesses.
"Porsche Cars Canada, Ltd. low-up."
The B.C. government said
actively supports and encourpolice resources must be bolages these Porsche Centres to
stered so investigators can
know their customers and to
follow up leads provided by
ensure compliance with good
FINTRAC.
business practices as well as
The RCMP's financial
applicable laws and regulacrime expertise, dispersed as
tions," he said via email.
responsibility for white-collar
'GET A BANK DRAFT'
crime was transferred to local
police, must be rebuilt, the
Morris Lubinich, genprovince said. - ANC
eral manager of McLaren

We've done an
abhorrent job in the
last decade.
There has to be
follow-up.

"My new 90-day average is 18 units and
,¶PRQP\ZD\WR.P\¿UVW\HDU´
- Chris Hubbard, Salesperson, AB

Stay Sharp & Sell More
Call (888) 700-9454 * JoeVerde.com/Can

PHOTO: ISTOCK

ing regimes. Submissions for
the review closed May 18.

Joe Verde

SC 13120

Criminals like
expensive cars,
either for status or
to flip, making car
dealers a target for
money laundering.

Joe Verde Sales & Management Training, Inc.

05_21_18

http://www.JoeVerde.com/Can

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