The bill will help the authorities to more effectively combat money laundering and terrorism financing.
Singapore’s Parliament passed a bill on Tuesday (20 Nov) that requires developers to conduct due diligence checks on property buyers and report any suspicious transactions, reported Channel NewsAsia.
Moreover, those convicted of terrorism financing and money laundering offences are prohibited from becoming developers.
Known as the Developers (Anti-Money Laundering and Terrorism Financing) Bill, the legislation amends the Sale of Commercial Properties Act and the Housing Developers (Control and Licensing) Act, which respectively oversees the sale of commercial and residential properties before they are built by developers.
“This bill is important as it allows Singapore to more effectively combat money laundering and terrorism financing,” said National Development Minister Lawrence Wong, adding that the changes will update Singapore’s rules in line with global standards.
“Failure of businesses to meet international standards puts at risk our international business relationships, as well as the reputation of individual companies and the Singapore financial market in general,” he added.
Under the new rules, developers will need to conduct due diligence checks on their clients and keep records of such checks. If there is an investigation and subsequent criminal proceedings, the developer will also be required to disclose information, retain documents and make copies.
But Wong noted that the requirements “only apply until the project is completed, which is also the point at which the developer is no longer regulated under the two Acts”.
Developers are also prohibited from receiving money from an anonymous source or a buyer with an “obviously fictitious name”. Companies that violate the aforementioned rules will face a maximum fine of $100,000.
Meanwhile, Nee Soon GRC’s MP Louis Ng commended the bill, but he fears that the new rules could impact the earnings of property developers. This is because developers will need to train their staff, as well as develop internal policies and controls against terrorism financing and money laundering.
“We must remember that we are asking developers who are there to make a profit to do their due diligence which might end up with them making less profits. We are asking them to check on their own clients who are paying them a lot of money.”
Wong responded that the Urban Redevelopment Authority (URA) will assist developers in complying with the new rules by giving all the necessary guidance on the initial implementation stage.
“Subsequently, URA will provide ongoing support to improve the industry’s understanding of what constitutes risky transactions, as well as their risk mitigation capabilities that are needed, in order to foster a good understanding of the new requirements,” he added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com