The B.C. government is requiring all post-secondary institutions in the province to review their financial policies to ensure that large cash payments from a single student are not accepted.
The change comes following anecdotal complaints made to Peter German as part of his investigation into money laundering in British Columbia’s economy.
Advanced Education Minister Melanie Mark has sent a letter to the 25 public post-secondary institutions and the 342 private career training institutions and private degree-granting institutions in the province.
“We need to protect post-secondary institutions as places for higher learning and skills development, not alleged places for organized crime to clean dirty money,” Mark said.
“Our government has not waited to act while the independent reviews, and now the inquiry, into money laundering have been ongoing. We have a responsibility to stamp out money laundering by addressing and mitigating any possible loopholes as we become aware of them.”
The accusation is that a student paid tuition in cash and then withdrew from the post-secondary institution before receiving a reimbursement check.
The province has no details on how many cases have been flagged and how much money has allegedly been laundered through tuition reimbursements.
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“I have concerns if a student shows up with $10,000 is cash, $20,000 to pay tuition and what is the source of that cash and why it is being used instead of a bank draft or something more typical,” Eby said.
Mark was asked whether these allegations involved international students and would not respond directly.
“I don’t want to single out international students here. We do not know the magnitude, the depth, all we know if there have been allegations,” Mark said.
“These are serious allegations that post-secondary institutions can be used for money laundering and we want to close the loop as quickly as possible.”
Post-secondary institutions are being asked to share copies of their existing policies on cash transactions to guide future direction from the provincial government. Those without a policy on the acceptance of cash are being told to develop one.
“Unfortunately, even our post-secondary institutions are at risk for money laundering,” General Attorney David Eby said.
“Peter German has advised that people are paying thousands of dollars in suspicious cash for multiple semesters in advance and then seeking refunds by cheque. Our post-secondary institutions must not be used to launder money, and we are asking them to review their policies to put a stop to it.”
WATCH: NDP government announces public inquiry into money laundering
The B.C. government announced a public inquiry into money laundering earlier this month.
Justice Austin Cullen has been hired to run the inquiry. Cullen has been given the power to compel witnesses and order documents to be disclosed.
A report from the Expert Panel on Money Laundering in Real Estate released earlier this month estimated that more than $7 billion in dirty money was laundered in B.C. in 2018 and that dirty money increased the cost of buying a home by about five per cent.
In Metro Vancouver, the impact has been much higher, with estimates closer to a 20 per cent increase in housing prices.