Violators may pay a $100,000 fine or be disqualified from obtaining future licences.
The parliament passed a bill that will require developers to conduct due diligence in screening property buyers and reporting any suspicious transactions in a bid to prevent money laundering and terrorism financing from taking place in the real estate sector, an announcement revealed.
Known as the Developers (Anti-Money Laundering and Terrorism Financing) Bill, it will bring Singapore’s anti-money laundering and terrorism financing regime in line with international standards, minister for national development Lawrence Wong said.
The bill will make amendments to the Housing Developers (Control and Licensing) Act and the Sale of Commercial Properties Act which will include changes such as 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.
“Developers should ensure that the information obtained with respect to the purchasers and its beneficial owners are kept updated,” he highlighted. “At any point during the monitoring, if the developer comes to know about property which represents proceeds of, or is used or intended to be used in connection with, any act which may constitute drug dealing or criminal conduct, the developer will then have to report such suspicious activity to a suspicious transaction reporting officer.”
Wong also stressed how developers will not be required to monitor their buyers perpetually, with the responsibility only falling on their shoulders until the project is completed.
Developers will also have flexibility in determining how best to do their monitoring which is open to the use of third parties, he added.
“But ultimately, the developer bears full responsibility for adhering to the requirements under this new bill,” he said. “Hence, the developer should ensure that the third party hired has the appropriate capabilities and resources to comply with these measures, and are able to provide the relevant information to developers without delay, upon request.”
Meanwhile, developers are also prohibited from receiving money from an anonymous source or a buyer with an ‘obviously fictitious name’, Wong noted. Companies that violate the aforementioned rules will face a maximum fine of $100,000.
To ensure effective implementation and enforcement, Wong said that parliament will be adopting a two-pronged approach to address concerns of infectivity with the help of the Urban Redevelopment Authority (URA).
“URA will engage the developers, and it will do industry outreach and provide all necessary guidance to developers in the initial implementation stage,” he explained. “Subsequently, URA will provide ongoing support to improve the industry’s understanding of what constitutes key transactions, as well as their risk mitigation capabilities that are needed, in order to foster a good understanding of the new requirements.”
Meanwhile, when the industry’s capabilities have been brought up to speed, the Controller of Housing under URA will carry out regular audit checks to ensure that developers are implementing the measures properly.
“If developers are found to not have adhered to requirements, there will be penalties, not only potential fines, but in more serious cases, they could also be disqualified from obtaining licences in the future,” Wong said.
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