Canadian sanctions guidance — Real estate sector

This guide is designed to help Canadian real estate brokers, agents and developers understand sanctions compliance and manage sanctions risks. All Canadians, including real estate reporting entities, must comply with Canadian sanctions. This information is not exhaustive. It is recommended that each institution have a sanctions compliance program in place and review new measures on an ongoing basis. Consult with private legal counsel, as required. For information on Canada’s sanctions regime see Canadian sanctions. Additional resources can be found under thematic guidance.

On this page

• Overview
• Due diligence
• FINTRAC and sanctions enforcement
• Red flags
• Enforcement
• Contact

Overview

When sanctions are implemented in Canada, Canadians abroad, and those in Canada, can face limitations in dealing or collaborating with sanctioned countries, or listed individuals, and entities.

Real estate professionals need to be aware of Canadian sanctions and how they may impact their work and relationships. Sanctions prohibitions must be considered when facilitating a real property transaction to ensure compliance with Canada’s sanctions regime.

Some listed individuals and entities, or their intermediaries, may attempt to circumvent Canada’s sanctions regime and launder money through real estate investments, using proxies to act on their behalf. For example, individuals and entities may launder or attempt to launder and obfuscate illicit proceeds—including those derived from sanctions evasion—through the purchase of real estate, often hiding behind intermediaries, nominees or straw purchasers and/or opaque corporate structures including legal entities or trusts. For more information, see the Global Advisory on Russian Sanctions Evasion Issued Jointly by the Multilateral REPO Task Force.

Due diligence

Canada encourages the effective and robust enforcement of sanctions through rigorous due diligence, which can help assess whether an activity may trigger a sanctions violation or if an activity is an attempt to circumvent Canada’s sanctions. The sanctions compliance program information contains general due diligence best practices and is separate from the requirement for a compliance program under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Canada’s sanctions change frequently. Subscribe to receive sanctions updates and monitor the latest announcements on Canada’s sanctions, including new additions to the sanctions lists and sanctions regulations.

Adopting a risk-based approach is fundamental to a thorough due diligence to assess whether a transaction may indicate a risk of sanctions evasion and/or money laundering practices.

There are some key considerations when evaluating transactions in the real-estate sector:

Transacting with listed individuals

Screen any proposed engagement against the UN Security Council Consolidated List and the Consolidated Canadian Autonomous Sanctions List to determine if the individual or entity you propose to engage with is directly subject to Canadian sanctions.

While it is generally prohibited to deal directly with listed individuals and entities, indirect dealings are an important consideration. Under most Regulations made pursuant to the Special Economic Measures Act (SEMA) and the Justice for Victims of Corrupt Foreign Officials Act, it is prohibited to enter into or facilitate a transaction related to a dealing with a listed individual or entity – even indirectly, such as through a third party – including if that third party is not Canadian and/or is located outside of Canada.

Determine if the client you plan to deal with has any direct or indirect association with individuals or entities listed by Canada. This includes any indirect dealings with a listed individual or entity through associates, family members, legal representatives, subsidiaries of a company, parent/holding company, intermediary bank, etc.

See Dealings prohibition and asset freeze for more information.

Questions to consider:

• Does the activity involve, or benefit, any listed individuals or entities?
• Are there any indirect associations between my client and listed individuals or entities, for example any indirect dealings with a listed individual through associates, family members, subsidiaries, parent/holding company, intermediary bank, legal representatives, among others?
• Does my client have connections of concern, such as a history of engagement with legal entities or arrangements that may have a link to listed individuals, entities, government officials, and/or their proxies?
• Am I making or receiving a payment to or from a listed individual or entity (either directly or indirectly), or through a bank, in a sanctioned country?
• Am I in any way facilitating a sanctions contravention?

You may also consult the guidance on financial or related services prohibitions as well as Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) guidance on knowing your client.

FINTRAC and sanctions enforcement

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) enforces the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and is also responsible for collecting sanctions-related information from reporting entities like real estate brokers or sales representatives, and real estate developers. These obligations help enforcement agencies to build linkages such as mapping indirect associations between suspicious transactions and money laundering, as well as detecting sanctions evasion tactics.

Real estate activities, including when dealing with clients, must comply with Canadian sanctions legislation and fulfill specific obligations as required by the PCMLTFA and associated Regulations.

Obligations under both the PCMLTFA and Canada’s sanctions legislation may apply when a situation involving suspected money laundering may also be sanctions related. For example, there is the possibility that a real estate broker, agent or developer may be dealing with a listed individual or entity attempting to purchase real estate in Canada for the purposes of money laundering.

Similarly, an individual may be both a foreign politically exposed person (PEP) under the PCMLTFA and be listed on the UN Security Council Consolidated List and the Consolidated Canadian Autonomous Sanctions List. However, not all foreign PEPs are listed individuals under sanctions, and not all listed individuals under sanctions are PEPs.

Sanctions‑related reporting obligations to FINTRAC

1. Suspicious Transaction Report (STR)
   • Since August 2024, under the PCMLTFA, reporting entities must report suspected sanctions evasion-related transactions.
2. Listed Person or Entity Property Report
   • Since March 2, 2025, reporting entities must report the existence of property in their possession or control that is owned, held, or controlled by or on behalf of individuals and entities listed under the United Nations Act (UNA).
   • Since October 1, 2025, real estate reporting entities must report the existence of property in their possession or control that is owned, held, or controlled by or on behalf of individuals and entities listed under the Special Economic Measures Act (SEMA) and the Justice for Victims of Corrupt Foreign Officials Act (JVCFOA).

A transaction or attempted transaction does not have to occur to fill a Listed Person or Entity Property report, unlike a Suspicious Transaction Report (STR).

Note: Sanctions legislation and Regulations also have disclosure obligations, which require property reporting to the RCMP.

Red flags

Some individuals and entities may attempt to circumvent Canada’s sanctions through real estate transactions. The sanctions due diligence red flags page may be helpful to detect suspicious transactions. If a real estate transaction raises one or more of the following red flags, there may be a risk of sanctions circumvention. In this case, you may investigate further and seek legal advice to confirm if the transaction is permissible or not according to Canada’s sanctions legislation and associated regulations.

Potential red flags to consider for the real-estate sector:

• The purchase, sale, or legal ownership transfer of real property is in the name of a foreign legal entity, particularly with respect to a transaction or sale that:
  • Is far below or above market value;
  • involves all-cash transfers or alternative financial channels such as cryptocurrencies and other emerging financial technologies;
  • is funded by a third party with a known connection to listed individuals.
• The transaction involves the use of legal entities or arrangements that may have a link to listed individuals, entities, elites, government officials, and/or their proxies.
• A purchase of real estate by an intermediary, performing functions on behalf of listed individuals.
  • Often located in a jurisdiction known as a tax or corporate formation haven.
• Complex transaction structures to obfuscate the true buyer or seller, such as:
  • A transaction done by an intermediary, nominee, straw purchaser or proxy. Listed individuals using a combination of legal entities and legal arrangements such as trusts to ensure they remain undetected.
  • Leveraging complex ownership structures to disguise the buyer’s or seller’s connections to particular assets or entities.
• Dealing with an individual or entity in a sanctioned country, or with a company that has a subsidiary in a sanctioned country.

For complementary red flags indicating money laundering and terrorist financing indicators, consult:

• Money laundering and terrorist financing indicators—Real estate
• Laundering the proceeds of tax evasion in real estate
• Risk-based Approach Guidance for the Real Estate Sector

Scenario – Sanctions evasion using proxies or family members

When screening the transaction, the real estate agent notices some red flags, indicative of sanctions evasion, that may trigger increased due diligence. For example:

• The party to the transaction is unclear, or is a numbered company, the agent has only dealt with the lawyer representing the client.
• The source of wealth or source of funds in a property transaction is not clear.
• The property registry records show title ownership is owned by a family member of a listed individual.
• Payment for property maintenance assistance, utility bills, property taxes are being paid by a third party and not the owner.

If the agent has reasonable grounds to suspect sanctions evasion by someone acting on behalf of a listed individual or entity, they must report attempted or actual transactions on FINTRAC’s Suspicious Transaction Reports.

Enforcement

For information on reporting sanctions violations and on penalties for contravening sanctions, see Sanctions compliance and enforcement in Canada.

Contact

For any sanctions inquiries or questions, contact the Global Affairs Canada Sanctions Bureau.