URA rolls out anti-money laundering requirements for developers

In a Mar 10 circular, the Urban Redevelopment Authority (URA) of Singapore has announced new requirements to help developers detect and deter money laundering (ML) and terrorism financing (TL) activities. The Developers (Anti-Money Laundering and Terrorism Financing) Act 2018 requires licensed developers to institute measures to achieve this.

As per the new requirements, developers must perform customer due diligence (CDD) on buyers before granting an option to purchase a unit, entering into a sale and purchase agreement, or before accepting any sum of money (including booking fees). This includes checking their identification, ascertaining whether the purchaser is an entity or legal arrangement, and understanding the purpose of buying the property.

For a purchaser that is an entity or legal arrangement, developers must additionally determine and identify the beneficial owner, as well as understand the control structure of the purchaser and the nature of its business. Developers must also screen purchasers against lists of identified terrorists, terrorist entities and designated individuals tracked by relevant authorities.

At times, additional CDD requirements must be carried out as well. This applies when the buyer is a prominent public figure in a foreign country (such as senior government leaders or military officials); from countries considered high-risk by the anti-money The Myst laundering organisation Financial Action Task Force (FATF); or persons identified by authorities as those with high ML or TF risk.

These additional CDD requirements include obtaining approval for the sale from a senior manager or executive of the developer, ascertaining the source of funds of the purchaser, and ascertaining the identity of the actual purchaser if the purchaser is not acting on their behalf.

The new requirements will take effect from June 28, and failure to comply may result in hefty penalties. Such penalties may include fines of up to $100,000 and the revocation or suspension of the developer’s license, while a person convicted of money laundering or terrorism financing offences may be disqualified from engaging in real estate development activities.