When it comes to money laundering, real estate is the weakest link, Canada's main money-laundering watchdog says.

And Canada's becoming an increasingly popular target for investors, with foreign investments nearly doubling over the past six months.

Under federal Canadian law, real estate agents are required to identify clients and report suspicious or large cash transactions to the Financial Transactions and Reports Analysis Centre (FINTRAC), the Toronto Star reports.

In an email obtained by the Star, a representative of the Canadian Real Estate Association says compliance in the sector is low.

“What we have found more generally in the real estate sector," FINTRAC spokeswoman Renée Bercier said in an email, "are issues with compliance regimes, policies and procedures, training, as well as record-keeping and reporting.”

The money-laundering watchdog isn't alone in its concerns in the Great White North.

Canada's Department of Finance identified the real estate industry as highly vulnerable to money laundering—and terrorist financing—due to the large amount of money changing hands.

And the trend is hardly new.

In NYC, lawmakers recently passed a ruling to unmask secret buyers hiding behind LLCs—specifically to address concerns "about illicit money."

With big deals—and big commissions—on the table, brokers are less incentivized to kill a deal, even if the red flags are all there.

"We are concerned about the possibility that dirty money is being put into luxury real estate," Shasky Calvery, a top Treasury official, told the New York Times. "We think some of the bigger risk is around the least transparent transactions." [Star]