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Developers now have to screen buyers to prevent money laundering under new Bill

DEVELOPERS will bear new responsibilities and duties to prevent money laundering and terrorism financing from happening in the real estate sector, under a Bill passed by Singapore lawmakers on Tuesday.

This, along with other proposed changes in the Developers (Anti-Money Laundering and Terrorism Financing) Bill, will bring Singapore's anti-money laundering and terrorism financing regime in line with international standards, said Minister for National Development Lawrence Wong.

Under the amendments, developers will need to carry out due diligence checks on purchasers, keep proper records relating to these checks, and report any suspicious transactions to the Suspicious Transaction Reporting Officers.

They will also need to train employees and establish processes to manage and mitigate money laundering and terrorism financing risks, and refrain from dealing with the accounts or money from anonymous sources or buyers with obviously fictitious names.

"This Bill continues the effort and will help to strengthen our levers against money laundering and terrorism financing in the real estate sector in line with FATF's (Financial Action Task Force) direction to strengthen the supervision of non-financial sectors," said Mr Wong.

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The Bill will make amendments to the Housing Developers (Control and Licensing) Act and the Sale of Commercial Properties Act.

The changes include barring people who have been convicted for money laundering and terrorism financing from being licensed housing developers, and disqualifying them from holding responsible positions at development firms.

The Controller of Housing - who administers regulations related to developers - will also be given enforcement powers to ensure compliance with the new provisions.

This includes powers to require developers to produce relevant information and documents for the investigation and any subsequent criminal proceedings, where failure to comply will result in a fine of up to S$100,000.

Developers will need to keep records of their diligence checks for at least five years after the transaction is completed, said Mr Wong in response to Ms Lee Bee Wah (Nee Soon GRC), who asked about the time period and expressed concern that storage of such data would increase business costs.

Mr Wong said the prescribed period was consistent with international recommendations as well as legislation in other sectors, such as for pawnbrokers and financial institutions.

During the debate, MPs also asked if the new duties would be overly onerous on developers, and impact business operations and costs.

Ms Foo Mee Har (West Coast GRC) also asked if the increased cost of compliance on developers would inadvertently be passed on to consumers.

To assist developers in screening prospective purchasers, she also suggested the Ministry of National Development compile a single comprehensive list online for updated checks on suspicious persons or entities. Currently such checks involve having to check against multiple lists by relevant local and international authorities.

In response, Mr Wong said: "We recognise the industry's concerns about the compliance costs. In tabling this Bill, we have been careful to strike a balance between complying with the requirements recommended by the FATF, and ensuring that the burden on developers is not excessive."

He added that the Bill adopts a risk-based approach to anti-money laundering and counter-terrorism financing compliance, and the ministry would continue to engage the industry for feedback as it finalised the finer implementation details.


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