“A new African Arguments investigation has found that politically-exposed African nationals hold Canadian real estate worth several millions of dollars.
The study, conducted in partnership with the Journal de Montréal and Le Monde Afrique, reveals over a dozen individuals who have invested nearly $26 million in Canadian real estate, often without a mortgage.
The source of the funds used to buy these properties could be legitimate. But the sales should have raised red flags because of the public positions of the individuals involved or because of their association with deals that have raised suspicion.
Buying bricks and mortar abroad has long been a strategy of the rich to diversify their assets.
Typically, the likes of France, US and UK have been the go-to places to buy up expensive property. Not all of it uses clean money. In 2016, a UK parliamentary committee estimated that a shocking $150 billion is laundered in London’s real estate market every year. But in recent years, luxurious flats owned by families of African leaders have been seized in each of these countries.
This seems to have led some to look further afield.
“They will diversify their investments according to only one criteria, which is the legal security offered by specific territories,” says William Bourdon, lawyer for Sherpa.
Sherpa is the NGO behind the “ill-gotten gains” case in France in which the rulers of Gabon, Congo-Brazzaville and Equatorial Guinea stand accused of laundering money in luxurious French properties.
According to Marc Guéniat, a researcher at the Swiss NGO Public Eye, France has historically been the favoured location for investment amongst the rulers of francophone Africa, but incidences such as the “ill-gotten gains” case have changed this.
“Logically, these rulers look for other destinations,” he says. “As a francophone region, Québec is an interesting alternative.”
In Québec, the origins of funds invested in real estate don’t seem to raise too many questions. A recent Transparency International report highlighted the country’s weak anti-money laundering regulations in the real estate sector.
In theory, both real estate brokers and financial entities such as banks are responsible for detecting money laundering in Canada. They are meant to notify suspicious transactions to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) that can, in turn, inform the police.
But between 2003 and 2013, in which there were over 5 million real estate sales, FINTRAC received just 279 suspicious transactions warnings. This rate increased slightly following educational efforts by FINTRAC, although it remains relatively low.
Brokers that fail to meet their legal responsibilities also face criminal sanctions, but it is not clear how many such cases have been investigated and brought to justice. The Canadian royal police did not reply to our questions.”
Source: All Africa