Agents Found Guilty of Neglecting Due Diligence Requirements in Property Transactions
Two property agents in Singapore have been found guilty of violating anti-money laundering regulations by failing to conduct required due diligence checks on their clients. Their actions breached the Estate Agents Prevention of Money Laundering and Financing of Terrorism (PMLFT) Regulations 2021 and the Estate Agents Act, according to disclosures made in Parliament.
The agents neglected to obtain, verify, and document accurate identifying information of buyers and failed to assess the risks associated with potential money laundering activities. As a result, one agent received a S$4,000 fine and a four-month registration suspension starting in July 2023.
These cases are not linked to the ongoing S$2.8 billion money laundering probe. However, they underscore the growing emphasis on financial transparency in real estate transactions.
The PMLFT Regulations, in effect since July 2021, mandate property agents and agencies to carry out customer due diligence (CDD) before facilitating transactions. Agents must verify client identities, assess risks, and document their findings. Non-compliance can result in financial penalties of up to S$200,000 for agencies and S$100,000 for individual agents, alongside potential license suspension or revocation by the Council for Estate Agencies (CEA).
Addressing queries in Parliament, Second Minister for National Development Indranee Rajah clarified that the Singapore Land Authority (SLA) does not conduct additional anti-money laundering checks, as this responsibility falls on real estate agents, developers, and financial institutions. SLA’s role is primarily to approve foreign ownership of landed properties under the Residential Property Act.
