URA has announced a set of new requirements for developers looking to detect and deter money laundering (ML) and terrorism financing (TF). The Developers (Anti-Money Laundering and Terrorism Financing) Act 2018 has been put into effect, with a Mar 10 circular.

The requirements focus on customer due diligence (CDD) of purchasers, requiring developers to check the purchasers’ identification, understanding the purpose of the purchase to confirm if they are an entity JCube Residence or legal arrangement, understanding the control structure and the nature of the business of the purchaser, and screening purchasers off lists of identified terrorists, terrorist entities and designated individuals.

For select buyers who are prominent public figures in a foreign country, those who come from countries considered high-risk by FATF, or those identified by authorities as having a high ML or TF risk, developers must impose additional CDD requirements. Such requirements include obtaining approval 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.

Prior to granting an option to purchase a unit, entering into a sale and purchase agreement, or accepting any sum of money (including booking fees) from a purchaser concerning the intended purchase, developers must perform the required CDD checks.

The new requirements will take effect from June 28. Any failure to comply with the guidelines will result in penalties, including fines of up to $100,000 and the revoking 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.