Latest in Investigation into Property Agents linked to Singapore $1 billion money laundering case.
The Council for Estate Agencies (CEA) is currently investigating property agents who may have played a role in property transactions linked to a recent money laundering case involving around S$1 billion in assets.
Non-compliance with anti-money laundering rules can result in disciplinary action, as CEA is responsible for regulating Singapore’s real estate agency industry. Sources have revealed that after the police operation on August 15, at least two real estate agencies reported suspicious transactions or activities to the Suspicious Transaction Reporting Office (STRO) of the Commercial Affairs Department.
Indeed, rich Chinese buying up properties (and other luxury items) have been attracting attention in Singapore and has an impact on the economy and the people in Singapore.
Singapore $1 billion money laundering case
The police have stated that they are unable to comment on the filed reports due to ongoing investigations into Singapore $1 billion money laundering case. Last week, the police announced that they had issued prohibition of disposal orders for at least 105 properties valued at approximately S$831 million.
These properties include seven detached bungalows at Sentosa Cove, 79 condominium units (with 19 still under construction), and 19 commercial or industrial spaces. The individuals under investigation own these properties, some of which are also owned by their spouses or companies connected to the suspects.
In what has been one of Singapore’s largest anti-money laundering operations, at least 10 foreigners have been arrested and charged. The police have seized assets worth about S$1 billion, including properties, vehicles, luxury goods, and gold bars.
The Real Estate Agency Industry’s Fight Against Money Laundering
CEA stated that property agencies and agents are required to conduct due diligence checks on their clients when assisting with property transactions. Indeed, this week, in their blog, they have an article on this need to conduct diligence checks on their customers.
The rules stated clearly that agents must identify and verify their clients’ identities and assess the risk of their clients being involved in money laundering activities.
Steps Involved by Agents in such cases are highlighted here in an infographic.
According to the law, property agents must report any suspicious transactions or activities to the STRO and retain records of their due diligence measures, including relevant documents and information, for at least five years.
Violations of these regulations can result in fines of up to S$100,000 per case for agents and up to S$200,000 per case for property agencies, as well as the potential suspension or revocation of licenses or registrations.
In July 2023, a property agent pleaded guilty to failing to perform customer due diligence measures required by Singapore’s laws against money laundering and financing of terrorism. The agent failed to obtain, document, and verify her client’s identity information accurately. She also neglected to determine and document the risk assessment of her client’s involvement in money laundering or financing of terrorism. Consequently, she received a four-month suspension and a financial penalty of S$4,000.
Property Agencies Do Provide Tools for Checking Such Deals
CEA emphasized that property agencies must establish internal policies, procedures, and controls to prevent money laundering or financing of terrorism activities.
Property agencies often collaborate with third-party firms specializing in due diligence and background checks. These firms employ various tools and databases to verify the legitimacy of clients. Even with thorough checks, anomalies may not always be apparent, making it challenging for agents to identify suspicious clients on their own.
To assist property agencies and agents in conducting their due diligence checks, CEA has shared a list of “suspicious indicators.” For example, clients who attempt to conceal the identity of the true buyer or request transaction structures that hide the buyer’s identity could raise concerns.
However, the complexity of the process should not be underestimated. The intricacies involved, particularly in determining the origin of a client’s funds. While agents can express concerns about dubious behaviors or the source of payment from clients, obtaining precise details becomes difficult if clients or their lawyers withhold information. Moreover, once clients sign the option to purchase document, legal firms take over the remaining procedures, limiting agents’ access to additional information, including clients’ funds.
Concerns Continued on Who Has Been Involved in the Case
The recent developments in Singapore $1 billion money laundering case have caused widespread concern within the property sector. Names of several agents associated with the questionable transactions, across various agencies, have been circulating within industry circles.
Addressing these growing concerns, it is advised NOT to be making premature judgments and encouraged them to refrain from speculation, allowing the authorities to complete their investigations. It is also important to know what are some of the duties of a property agent in Singapore too.
Indeed, even as the new launches in Singapore has slowed down, it is still important to place oneself within the right steps when dealing with customers that are suspicious and not be distracted by short term profits.
