URA rolls out anti-money laundering requirements for developers

The Urban Redevelopment Authority (URA) has announced a set of new requirements for developers to help detect and prevent money laundering (ML) and terrorism financing (TL) activities. On Mar 10, URA released a circular which implements the Developers (Anti-Money Laundering and Terrorism Financing) Act 2018.

This act requires all licensed developers to conduct customer due diligence (CDD) checks on their buyers. This involves the identification of the buyer, ascertaining whether they are an entity or legal arrangement, comprehending the reason behind the purchase of the property Tengah Plantation EC and looking into the control structure of the buyer and the nature of their business.

In addition to this, developers must also screen their buyers in accordance with the relevant authority’s list of identified terrorists, terrorist entities and designated individuals.

For certain purchasers, extra CDD measures must be taken. Prominent public figures in foreign countries, people from countries identified as high-risk by the FATF (Financial Action Task Force) and those marked by authorities as having high risk for money laundering and terrorism financing, all must undergo additional CDD proceedings. These include obtaining the approval of a senior executive or manager, confirming the source of funds of the buyer and verifying the identity of the actual purchaser if not acting on their own behalf.

The CDD checks must be performed 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 new requirements will come into effect on June 28 and failure to comply may result in high fines of up to $100,000 and the suspension or revocation of the developer’s license. Any individuals convicted of money laundering or terrorism financing offences may be denied the right to engage in real estate development activities.