URA rolls out anti-money laundering requirements for developers

The Urban Redevelopment Authority (URA) has announced new requirements for developers to detect and deter Tengah EC money laundering (ML) and terrorism financing (TL) activities. These requirements will take effect from June 28, in accordance with the Developers (Anti-Money Laundering and Terrorism Financing) Act 2018.

Under the new rules, developers must carry out customer due diligence (CDD) on buyers, including checking their identification and ascertaining whether the purchaser is an entity or legal arrangement. They must also understand the purpose of buying the property and identify the beneficial owner of any entity or legal arrangement.

Furthermore, developers must screen purchasers against the lists of terrorists, terrorist entities and designated individuals tracked by relevant authorities.

For buyers that fall into additional categories, such as ‘prominent public figures in a foreign country (e.g. senior government leaders or military officials); from countries considered high-risk by the Financial Action Task Force; or persons identified by authorities as those with high ML or TF risk,’ developers must perform additional CDD requirements. These 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.

Developers must perform the CDD checks 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) from a purchaser concerning the intended purchase, whichever is earlier.

The penalties for failure to comply with the requirements may include fines of up to $100,000 and the revocation or suspension of the developer’s license. In addition, persons convicted of money laundering or terrorism financing offences may be disqualified from engaging in real estate development activities.