2nd Reading Speech by 2M Indranee Rajah for Anti-Money Laundering and Other Matters (Estate Agents and Developers) Bill
Apr 8, 2025
Mr Speaker, Sir, I beg to move that the Bill now be read a second time.
Introduction
Sir, as a reputable and trusted financial centre and business hub, Singapore takes a firm stance against money laundering, terrorism financing and proliferation financing.
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.
Over the years, we have established a robust risk management framework for the real estate sector, guided by the recommendations made by the Financial Action Task Force, or FATF. The FATF sets international standards to tackle money laundering, terrorism financing, and proliferation financing.
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.
Specifically, this Bill seeks to:
1. Strengthen current penalty frameworks;
2. Further align our regulatory regime with FATF standards; and
3. Make miscellaneous amendments to clarify restrictions against convicted persons.
I will take Members through the key amendments in these three areas.
Key Amendments Set 1: Strengthen penalty frameworks
The first set of amendments strengthens our penalty frameworks to strengthen the deterrent effect of our current regime.
Prescribe maximum financial penalties for estate agents and salespersons on a ‘per contravention’ instead of ‘per case’ basis
Today, estate agents and salespersons are required to perform duties in relation to countering money laundering, and terrorism financing activities.
Examples include the requirement to conduct Customer Due Diligence or CDD measures by salespersons on their clients.
Currently, non-compliant estate agents and salespersons may be subject to a financial penalty of up to $5,000 per case under the Council for Estate Agencies, or CEA’s, Letter of Censure disciplinary regime for minor breaches.
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.
These members are from various backgrounds such as practising solicitors, architects, engineers or individuals from the real estate agency industry.
The Disciplinary Committee may impose a financial penalty of up to $200,000 per case on estate agents or $100,000 per case on salespersons.
However, the current penalty framework which allows financial penalties to be imposed on a per case basis does not provide sufficient deterrence.
This is because the potential monetary benefits that estate agents and salespersons might obtain for facilitating illicit transactions could be significantly higher than the maximum financial penalty of $200,000 for estate agents, or $100,000 for salespersons.
In the recent $3 billion money laundering case, the total estimated value of properties seized was more than $370 million from the 10 convicted offenders.
Assuming that a salesperson facilitates the sale of one such property valued at, say, $10 million, a two percent commission for such a transaction would amount to $200,000.
When such financial gains far exceed the current maximum penalties for these offences, there is a clear need to raise the penalties for stronger deterrence.
To ensure that our penalty frameworks are sufficiently deterrent, clauses 8 and 9 of the Bill will amend the Estate Agents Act or EAA to impose maximum financial penalties on a per contravention basis.
Estate agents and salespersons who contravene any legislation or provision of a code of practice, ethics and conduct relating to money laundering, terrorism financing or proliferation financing, will now be subjected to a maximum penalty of up to $5,000 per contravention under CEA’s Letter of Censure regime.
For cases heard by a Disciplinary Committee, errant estate agents and salespersons will be subjected to a maximum penalty of up to $200,000 and $100,000 per contravention for estate agents and salespersons respectively.
Maximum penalties for other disciplinary breaches will remain on a per case basis.
Let me illustrate the changes with a hypothetical example:
Assume an errant salesperson has committed four disciplinary breaches that are referred to a Disciplinary Committee to be heard. Of these breaches, two concern anti-money laundering obligations and the other two concern the salesperson’s negligence in handling a transaction.
Based on the existing penalty framework, the maximum financial penalty that can be imposed for all four breaches is $100,000.
Under the new penalty framework, the maximum financial penalty that can be imposed is now $300,000. For the two breaches of anti-money laundering obligations, a maximum of $200,000 in financial penalties can be imposed as each breach is now subjected to a maximum of $100,000. As for the two breaches of professional misconduct, an aggregate maximum financial penalty of $100,000 applies.
Increase maximum composition sums for housing developers and introduce composition framework for commercial/industrial developers
The amendments in this Bill will also enhance the composition framework for developers.
Similar to estate agents and salespersons, developers are required to perform duties to counter money laundering, and terrorism financing activities.
Currently, for less serious offences, non-compliant housing developers may be offered composition of up to $5,000 under the Housing Developers Control and Licensing Act, or HD(CL)A.
However, this is significantly lower than the maximum fine for money laundering and terrorism financing offences, at $100,000 per offence upon conviction.
To strengthen deterrence, clause 13 of the Bill amends the HD(CL)A to increase the maximum composition sum for housing developers from $5,000, to 50% of the maximum fine prescribed for the offence.
This means that the maximum composition sums for some offences will be increased to $50,000.
Clause 16 of the Bill will also amend the Sale of Commercial Properties Act, or SCPA, to allow offences by commercial and industrial developers to be compounded.
Similar to the HD(CL)A, the maximum composition sum under the SCPA will be up to 50% of the maximum fine prescribed for the offence.
With these amendments, the approach for the maximum composition sums for money laundering and terrorism financing offences in the HD(CL)A and SCPA will be aligned with that of other sectors, such as precious stones and metal dealers.
Key Amendments Set 2: Further aligning with updated FATF standards
Require estate agents and salespersons to conduct due diligence measures on unrepresented counterparties
The second set of amendments further align our regulatory regime with international standards set by the FATF.
Currently, estate agents and salespersons are only required to conduct due diligence measures on their own clients.
Hence, in transactions where either the buyer or seller are not represented by estate agents and salespersons, property-related due diligence measures may not be conducted on the buyer or seller who is unrepresented.
To align with FATF standards, clause 6 of the Bill amends the EAA to require estate agents and salespersons to conduct due diligence measures on such unrepresented counterparties of property transactions.
Clarify that estate agents, salespersons, and developers must consider proliferation financing risks
In recent years, the FATF has also updated its standards to clearly set out the standards to identify, assess, and mitigate risks associated with the financing of proliferation of weapons of mass destruction, or proliferation financing in short.
Clauses 3 to 5, 12, 14, 15 and 17 of the Bill thus update the regulatory regime for estate agents, salespersons, and developers to cover proliferation financing.
This is similar to the relevant legislative frameworks for other sectors.
The amendments to the composition regime for developers in clauses 13 and 16 of the bill would also allow proliferation financing related offences to be compounded.
Clarify that measures for developers relating to targeted financial sanctions apply to TF and PF in addition to terrorism
In the same vein, clauses 14 and 17 of the Bill amend the HD(CL)A and SCPA respectively to require developers to perform prescribed measures related to targeted financial sanctions for terrorism financing and proliferation financing, in addition to terrorism.
Today, developers are required to assess whether a purchaser is designated as a terrorist or terrorist entity under relevant lists, or sanctioned by the United Nations.
If so, developers are required to decline to enter into or terminate transactions with the potential purchaser, and report the matter to the Police.
The amendments will make clear that this also applies to purchasers who are on the designated or sanction lists due to terrorism financing and proliferation financing.
These measures for terrorism financing and proliferation financing are generally not new to estate agents, salespersons, and developers. Such measures are already part of existing anti-money laundering requirements as the underlying terrorism financing and proliferation financing offences are also money laundering predicate offences.
Efforts to combat terrorism financing and proliferation financing are also already part of the current measures performed by estate agents, salespersons and developers.
Key Amendments Set 3: Clarifying restrictions against convicted persons
We now come to the third set of amendments, which are clarifications to restrictions against persons convicted of money laundering, terrorism financing or proliferation financing offences.
Clause 2 of the Bill clarifies that persons who have been convicted of money laundering, terrorism financing, or proliferation financing offences, whether committed in Singapore or overseas, are not deemed fit and proper to hold an estate agent licence, or a salesperson registration under the EAA, given the seriousness of such offences.
Similarly, clauses 12 and 15 of the Bill amend the HD(CL)A and SCPA respectively to clarify that money laundering, terrorism financing, and proliferation financing offences include offences under the law of any foreign country or territory.
In this way, persons convicted of such offences regardless of where they are committed will be subjected to prohibitions against (i) becoming a housing developer, (ii) becoming a substantial shareholder, or (iii) holding a responsible position in a developer or in substantial shareholders of a developer.
CEA and URA will disseminate more information on these upcoming amendments to the real estate sector.
Conclusion
Let me conclude. This Bill aligns the real estate sector with international standards and is another step in strengthening our national strategy against money laundering, terrorism financing, and proliferation financing.
As criminals get more sophisticated over time, we will continue to remain vigilant and will not hesitate to tighten our regime further where necessary.
As a society, we must also remain watchful and vigilant. Countering money laundering, terrorism financing, and proliferation financing in the real estate sector requires a concerted effort by not just the government, but all stakeholders, such as businesses, and individuals.
This collective partnership is key in our continued efforts to act decisively to detect and deter such illicit activities, while ensuring that our financial and business ecosystem remains reputable and trusted, and continues to thrive.
Sir, I beg to move.