Tougher financial penalties to combat money laundering in property sector after new Bill passed

SINGAPORE: There will be tougher financial penalties to combat money laundering in the property sector after a new Bill was passed on Tuesday (Apr 8).

The Anti-Money Laundering and Other Matters (Estate Agents and Developers) Bill will, among other things, impose financial penalties on property agencies and their agents on a “per contravention”, instead of a “per case” basis.

This is if they contravene any legislation or provision of a code of practice, ethics and conduct relating to money laundering, terrorism financing or proliferation financing.

The strengthening of penalty frameworks will strengthen the deterrent effect of the current regime, said Second Minister for National Development and Finance Indranee Rajah.

“In the real estate sector, estate agents, salespersons, and developers play an important role in detecting and deterring illicit activities, alongside financial institutions, lawyers, and law practice entities,” she said.

“This Bill is part of our continuing efforts to bolster our ability to detect and deter such illicit activities within the real estate sector, thereby reinforcing our commitment to stamp out the laundering of criminal proceeds and financing of illicit activities through Singapore,” she added.

THE NEED FOR MORE DETERRENCE

While Singapore has developed a robust risk management framework for the real estate sector, Ms Indranee said that the current penalty framework, which allows fines to be imposed on a “per case” basis does not provide “sufficient deterrence”.

This is because the potential monetary benefits that property agencies and agents might get for facilitating illicit transactions could be significantly higher than the maximum financial penalty of S$200,000 (US$148,000) for agencies, or S$100,000 for agents, she said.

Under the new measures, errant property agencies and agents will now be subjected to a maximum penalty of up to S$5,000 per contravention under the Council for Estate Agencies’ (CEA) Letter of Censure regime.

Estate agents and salespersons who commit more serious breaches may face disciplinary action before a Disciplinary Committee, which is an independent tribunal comprising members from CEA’s disciplinary panel. 

Currently, the committee may impose a financial penalty of up to S$200,000 per case on property agencies or S$100,000 “per case” on agents. Under the amendments, these limits will now be used on a “per contravention” basis.

Other measures as part of the Bill include the mandating of real estate agencies and their salespersons to conduct due diligence measures on “unrepresented counterparties”, not just on their clients.

Real estate agencies, salespersons and developers must also consider proliferation financing risk moving forward.

This will further align Singapore’s regulatory regime with Financial Action Task Force (FATF) standards, said Ms Indranee. The FATF sets international standards to tackle money laundering, terrorism financing, and proliferation financing.

In 2024, an inter-ministerial committee that reviewed Singapore’s anti-money laundering regime had recommended clarifying the requirements for the real estate sector.

The committee, chaired by Ms Indranee, was formed after Singapore’s biggest money laundering scandal which saw the arrest and sentencing of 10 foreigners and seizure of more than S$3 billion in assets.