Anti-Money Laundering and Other Matters (Estate Agents and Developers) Bill

Order for Second Reading read.

4.26 pm

The Second Minister for National Development (Ms Indranee Rajah): Mr Deputy Speaker, Sir, I move, "That the Bill be now read a Second time."

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 (FATF). 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: (a) strengthen current penalty frameworks; (b) further align our regulatory regime with FATF standards; and (c) make miscellaneous amendments to clarify restrictions against convicted persons.

I will take Members through the key amendments in these three key areas.

The first set of amendments strengthens our penalty frameworks to strengthen the deterrent effect of our current regime.

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 (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’ (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 2% 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 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 the 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.

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 (HDCLA). 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 HDCLA 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 (SCPA) to allow offences by commercial and industrial developers to be compounded. Similar to the HDCLA, 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 HDCLA and SCPA will be aligned with that of other sectors, such as precious stones and metal dealers.

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 Estate Agents Act to require estate agents and salespersons to conduct due diligence measures on such unrepresented counterparties of property transactions.

In recent years, 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.

In the same vein, clauses 14 and 17 of the Bill amend the HDCLA 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.

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 Estate Agents Act, given the seriousness of such offences.

Similarly, clauses 12 and 15 of the Bill amend the HDCLA 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 becoming a housing developer, becoming a substantial shareholder, or holding a responsible position in a developer or in substantial shareholders of a developer.

CEA and the Urban Redevelopment Authority will disseminate more information on these upcoming amendments to the real estate sector.

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 not just by the Government, but all stakeholders, such as businesses and individuals. This collective partnership is key to 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.

Question proposed.

Mr Deputy Speaker: Mr Vikram Nair.

4.40 pm

Mr Vikram Nair (Sembawang): Mr Deputy Speaker, this Bill proposes certain amendments to the Estate Agents Act and Housing Developers (Control and Licensing) Act in order to introduce further safeguards against money laundering. According to the Explanatory Statement, this is based on recommendations of FATF.

Fighting money laundering is clearly an important matter, especially in a financial centre like Singapore. The recent arrests related to the multi-billion dollar money laundering cases in Singapore also highlighted that a number of those involved had used their ill-gotten gains for the purchase of properties in Singapore. Against this backdrop, it is understandable that we would want to impose obligations on real estate agents.

Real estate agents, though, are a diverse group and typically self-employed. There are currently 36,058 registered property agents according to a report in January 2025. Their income is based on commissions and is generally irregular, depending on whether or not they have transactions.

The legislation now imposes on them higher penalties and obligations for the failure to do due diligence on either clients or counterparties where they have reason to suspect money laundering, proliferation financing or terrorism financing, where earlier due diligence exercises give them reason to doubt the veracity of the information provided to them. It also expands the existing obligations to cover counterparties to transactions.

While the test is phrased subjectively, I expect in practice, they will be judged objectively on whether or not they would have had reason to suspect money laundering. Otherwise, there will be a perverse incentive on agents to turn a blind eye – the infamous Nelsonian blindness. This means in a situation where a normal person would suspect there might be money laundering, it is likely an agent would be expected to do so as well.

Currently, due diligence obligations exist on banks and on law firms, who have to be especially careful when they take in client monies for conveyancing transactions. I also take the Minister's point that they do apply to real estate agents as well – at least, in recent years, I think since 2021. This actually already creates quite a secure backdrop to limit money laundering in property transactions. Essentially, if a party takes a loan or pays through a bank account, the bank would already have done due diligence or should have done due diligence on the source of funds. If instead of going to a bank, the person brings a pile of cash to his conveyancing lawyer's office, the lawyer would then clearly have their obligations triggered.

Against this backdrop, I will be grateful if the Minister can clarify whether the existing framework has had any shortcomings such that the due diligence obligations imposed on real estate agents have to be expanded. I would also be grateful if the Minister can clarify whether estate agents have had any issues complying with existing 2021 regulations, including obligations such as keeping records.

My main concern with expanding legislation is compared to banks and law firms, estate agents have more limited resources to conduct due diligence. Of course, if there is greater mischief that needs to be addressed, then I think this legislation would be fair. I would be grateful for the Minister to clarify the additional mischief that is intended to be captured by this legislation.

4.44 pm

Assoc Prof Jamus Jerome Lim (Sengkang): Mr Deputy Speaker, the Bill at hand is focused on bringing to effect the recommendations of the Inter-Ministerial Committee on anti-money laundering (AML) and, in particular, those that relate to AML efforts in the real estate sector.

Improving the regulatory framework is critical, not least because the so-called Fujian Gang had parked a significant amount of their three billion in illicit funds in property. This is unsurprising, given the big ticket nature of real estate transactions and the sky high prices of our housing. But it just underscores the importance of enhancing our regulatory efforts in the sector to prevent a recurrence of the events of August 2023.

For this reason, there is little reason to reject legislative effort – changes that edify such efforts. Hence, I support the Bill.

Given the importance of the issue, I was therefore surprised to see how the proposed amendments did not appear to be all that extensive. Many of them entail logical, but seemingly minor expansions of scope from changing the term "money laundering and terrorism financing" to money laundering, proliferation, financing and terrorism financing. Indeed, by my count, half of the clauses in the Bill relate to this change.

While I do not necessarily question the value of enfolding the illicit financing of weapons of mass destruction (WMD) into the scope of our anti-money laundering regime, it would nevertheless be helpful to this House to understand why this definition or expansion is deemed to be so crucial and relevant for our continued efforts in the real estate sector at this particular point in time. How many of the recent cases that have come under investigation have involved the financing of WMDs relative to plain vanilla AML or terrorism financing?

Based on my reading, the remaining provisions introduced are also somewhat fairly mild. Changing penalties to each instance of contravention, adding a requirement that unrepresented counterparties in real estate transactions be subject to more scrutiny and raising the maximum penalty from $100,000 to $200,000.

It is only in clause 10 where there seems at first glance to be some real teeth. It proposes amendments to the regulation making powers of the Council in section 72 of the Estate Agents Act, but when one returns to the original Act, one may be disappointed again. Here the change is again to be to insert "proliferation financing" to the list of requirements for what may be subject to regulation.

Sir, perhaps the underlying reason for the seemingly limited slate of amendments to the law is because there is already a robust set of laws in place to ensure the proper due diligence of real estate transactions even back in 2023.

The Council for Estate Agencies in its guide on 2021 regulations related to the prevention of money laundering and terrorism financing had already set out a comprehensive set of guidelines for how to conduct customer due diligence, including enhanced procedures for when the risk of money laundering or terrorism financing is greater.

The January 2025 version of the guide does indeed update the list of red flag indicators, doubling the page coverage in process, but my point is simply that we will not be raft of laws to combat so-called Singapore-washing even before this present update. And the Government has acknowledged as much. In response to a Parliamentary Question posed by my hon friend Mr Leong Mun Wai, the Minister for National Development indicated that, and I quote, "property agencies and property agents are required to perform due diligence checks on their clients before commencing business, any business relationship or facilitating transaction with them."

Yet, in our conversations with those working in the sector, some have raised a nagging sense that AML procedures in the industry are somehow not as robust as those for the financial sector more generally. The Inter-Ministerial Committee report observed this too, noting that the, and I quote, "uneven implementation practices across and within sectors".

And in response to this clarification question that I had posed on the Inter-Ministerial Committee last year, Minister Indranee conceded that the Government had, and I quote, "already started to do more in this space and will certainly see what they can do to strengthen the regulations in the sector".

So, the relevant question beyond whether these changes proposed in today's Bill are only marginal is whether more substantive legislation is actually required to bring the industry to the frontier of AML best practices than the rest of the financial sector in Singapore is required to abide by.

I am not a lawyer, but I would appreciate if the Minister would be willing to share if the laws, as they stand, together with the amendments proposed today are indeed sufficient to have brought about an earlier detection and detention of the Fujian Gang. If so, was it a matter of execution that fell short rather than the legal framework per se? And if not, what laws would be necessary? And why have these laws not been proposed to this House today?

The essence of my message, Sir, is simple. I do not believe that we actually lack the laws necessary to investigate, apprehend and prosecute egregious money-laundering practices in the real estate sector. What I feel is more important is a steely eye focus on ensuring enforcement and compliance, for which I hope the Government would redouble the efforts to stamp out the scourge of Singapore-washing.

Mr Deputy Speaker: Mr Neil Parekh.

4.50 pm

Mr Neil Parekh Nimil Rajnikant (Nominated Member): Mr Deputy Speaker, Sir, thank you for allowing me to join the debate which seeks to strengthen Singapore’s regulatory framework for estate agents and property developers by incorporating recommendations from FATF.

Singapore’s battle against money launderers now moves to the real estate and property sector as we strive to uphold our nation’s financial integrity and a strong reputation as a global financial hub.

This Bill introduces tougher penalties and record-keeping obligations to ensure that estate agents and developers are better equipped to detect and report suspicious transactions. This Bill also has some important initiatives towards safeguarding our real estate market from illicit financial flows.

These reforms come at a critical time. While Singapore must remain open for business, it must also be a place that is hostile to money launderers. This Bill reflects that balance – fortifying our defenses while preserving confidence in our institutions.

This Bill also introduces stricter licensing criteria which is very important to protect the integrity of the sector. Specifically, institutions such as the CEA and the relevant housing authorities will gain stronger investigative powers and broader authority to enforce compliance.

The two-year implementation timeline is also very prudent. It provides businesses with the space to understand, prepare for, and adapt to the new requirements. This phased approach balances urgency with realism.

Mr Deputy Speaker, Sir, while the Bill is a necessary response to global risks, we must be candid about the challenges it introduces, especially for small and medium-sized firms operating in the space.

Implementing these new requirements will mean higher operational costs for all. [Background noise.]

Mr Deputy Speaker: Can we have that switched off, please? Mr Neil Parekh, carry on.

Mr Neil Parekh Nimil Rajnikant: Thank you, Deputy Speaker. Estate agencies and property developers may need to hire more compliance professionals, invest in new technology and restructure internal processes to meet reporting obligations.

I now have six clarifications for the Minister.

One, while the Bill addresses proliferation financing, it would be useful to clarify how this concept specifically applies to estate agents and property developers. For instance, how will transactions involving foreign buyers be monitored for potential links to such financing and what specific indicators or red flags should agents look out for?

Two, will digital property platforms involved in cross-border transactions fall under the same compliance regime. It would be helpful to understand how enforcement will be operationalised in these more complex situations, providing stakeholders with reassurance and confidence in the regulatory process.

Three, this Bill introduces stricter obligations, but stakeholders may need more clarity on the level of verification required, especially in complex commercial property transactions. It would be helpful to specify the legal obligations and liabilities when a client refuses to provide due diligence documentation.

Four, given the additional compliance requirements, smaller firms may face challenges in adapting to this new setup. It would be helpful to know if there are any scaled compliance measures for small and medium enterprises (SMEs) or support initiatives such as training, grants, or digital tools to help them meet these obligations without compromising their competitiveness. Clarity on whether penalties will be calibrated based on business size or intent would ensure that SMEs are not disproportionately impacted by unintentional lapses.

Five, this Bill aims to align with FATF's recommendations, but estate agents and developers may need more guidance on handling transactions involving foreign jurisdictions that do not have equivalent AML/CFT standards. It would be important to consider how stricter checks might affect legitimate foreign investment. What strategies will be employed to ensure that the enhanced compliance measures do not deter investment flows, thereby maintaining Singapore’s appeal as a financial hub?

Lastly, while the Bill outlines the need for compliance, businesses would benefit from a more structured transitional support. Beyond the implementation window, what forms of assistance – such as grants, digital compliance tools or subsidised training – are planned to help businesses operationalise these requirements efficiently? Such support will be crucial, especially for SMEs navigating the new regulatory landscape.

Mr Deputy Speaker, Sir, this Bill marks a pivotal step in protecting Singapore’s financial system and real estate sector from abuse. Strengthening due diligence, tightening enforcement, and embracing global standards affirms our position as a responsible, forward-looking financial hub.

But as we raise the bar, we must also bring our businesses – especially the smaller ones – along with us. Implementation must be firm but fair. The regulatory net must be tight, but not so tangled that it stifles legitimate activity or innovation. Mr Deputy Speaker, Sir, notwithstanding my clarifications, this Bill has my full support.

Mr Deputy Speaker: Mr Don Wee.

4.56 pm

Mr Don Wee (Chua Chu Kang): I rise in support of the Anti-Money Laundering and Other Matters (Estate Agents and Developers) Bill. There are already clear regulations and detailed guidelines against money laundering in our real estate sector. However, the $3 billion money laundering incident last year showed the need for more controls and necessitated the introduction of this Bill.

I support the key provisions of this Bill. But I have some questions and would like to seek clarifications from the Minister.

Firstly, regarding the scope of due diligence. What specific guidelines will be provided to estate agents to accurately identify suspicious activities? How will these guidelines be tailored to address the unique challenges within the real estate sector?

Next, on the implementation timeline. What is the planned timeline for the roll-out of the new measures? How will the Government ensure that all stakeholders will be adequately prepared for the compliance system? Mr Deputy Speaker, Sir, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Thirdly, support for small agencies. Smaller agencies may face resource constraints in sending their staff for training and implementing compliance measures. What support mechanisms will be in place to assist them in meeting the new regulatory requirements?

Fourthly, monitoring and enforcement. How does the government plan to monitor compliance with these new regulations? What penalties will be imposed for non-compliance and how will enforcement be balanced to avoid overburdening legitimate businesses?

Another pertinent issue is that of inter-Ministry and agency collaboration. Given the complexity of money laundering schemes, how will various government agencies collaborate to ensure a cohesive and effective approach to enforcement?

(In English): Finally, it is about public awareness. Beyond the real estate sector, what efforts will be made to educate the general public about these challenges to foster a culture of vigilance against money laundering?

Mr Deputy Speaker, Sir, this Bill demonstrates Singapore’s commitment to uphold and strengthen the integrity of our financial system. By addressing the vulnerabilities within the real estate sector, we have taken a decisive step to safeguard our reputation as a global financial centre. I look forward to the deliberations on this Bill and the collaborative efforts to ensure its effective implementation.

Mr Deputy Speaker: Minister Indranee Rajah. Mr Yip Hon Weng, are you speaking on this Bill? Right, please proceed.

4.59 pm

Mr Yip Hon Weng (Yio Chu Kang): Mr Deputy Speaker, Sir, I rise in support of this Bill. Strengthening our defences against financial crime is a critical national priority. I commend the Government's efforts to align our regulations with the recommendations of FATF. This Bill represents a significant step forward in safeguarding our financial system and housing market from exploitation.

However, while I applaud the intent behind this legislation, I have several clarifications.

First, Mr Deputy Speaker, Sir, the amendments may create an unintended burden on small estate agencies and independent agents, which operate on tight margins and often lack the resources of larger firms. The additional compliance costs imposed by this Bill, particularly regarding counterparty due diligence under clause 6, section 44BA, could prove disproportionately challenging. If these smaller players are overburdened, it could stifle their growth or even drive them out of business entirely. This would reduce competition and limit consumer choice within the already big-company-dominated real estate market.

In addition, the lack of expertise and resources among smaller estate agents could result in higher compliance costs. This may ultimately be passed on to consumers or salespeople. We must ensure that this legislation does not inadvertently create an uneven playing field, where only large firms have the capacity to absorb these new obligations.

As such, regarding clause 6, section 44BA, how does the Government plan to help smaller agencies and independent agents meet these new compliance requirements without incurring excessive costs? Will there be financial support or training subsidies available to smaller agencies to ensure they do not unintentionally fall afoul of these new regulations? Similarly, will resources be made available to smaller firms when dealing with foreign clients? How can we ensure that they are able to perform due diligence without being penalised due to limited means?

What safeguards are in place to prevent large firms from passing on their increased compliance costs to smaller subcontractors or resellers, thereby exacerbating the burden? Finally, have thorough industry consultations been conducted, specifically with small and independent estate agents, to assess whether the burden imposed by this Bill is truly proportional to their capacity and the risks they face?

Mr Deputy Speaker, Sir, my second concern pertains to the practical challenges of enforcement and the risk of achieving mere paper compliance without genuine oversight. While robust regulations are essential, they are meaningless without effective mechanisms to ensure adherence. If enforcement is weak or overly focused on procedural matters, bad actors will inevitably find ways to circumvent the rules, while legitimate businesses continue to shoulder the burden of compliance.

We cannot allow this law to become a paper tiger – compliance on paper must translate into effective enforcement in practice. To this end, does CEA currently possess the necessary manpower and specialised expertise to effectively detect sophisticated money laundering schemes, given their complexity and evolving nature? Or will enforcement remain largely reactive, relying on reports rather than proactive investigation? How does this Bill, beyond increasing reporting requirements, actively improve the detection of real estate transactions linked to illicit funds? What proactive measures are being implemented to identify deceitful activities and prevent them before they occur?

Finally, how will the success of this Bill's enforcement be measured? What key performance indicators (KPIs) will be used to assess its effectiveness? Is success determined by the number of fines collected, the number of cases prosecuted or, more importantly, by a reduction in real estate-related financial crime?

Third, Mr Deputy Speaker, Sir, addressing financial crime in the real estate sector is not solely the responsibility of estate agents. Consumers, including buyers, sellers, landlords, tenants and developers, must also be aware of their role in preventing illicit transactions. While estate agencies must enforce strict controls, property owners themselves have a duty to conduct their own checks and declarations, particularly in cases like harboring illicit funds.

A holistic approach is needed. The policy should incorporate strong consumer education efforts to ensure that all parties involved in a real estate transaction understand their responsibilities. Hence, what measures are in place to enhance consumer education about financial crime risks in real estate transactions? How will the Government ensure their buyers, sellers and landlords are equipped with the knowledge to detect and report suspicious activities?

In conclusion, Mr Deputy Speaker, Sir, the need for stronger anti-money laundering measures within the real estate sector is undeniable. Singapore has witnessed several high-profile cases highlighting vulnerabilities in our current system. The 2023 money laundering case, involving $3 billion in assets, stands as a stark reminder of the scale and sophistication of these activities. The impact on the real estate market was significant, with at least 105 properties facing prohibition of disposal orders, and at least 54 properties liquidated. This underscores the urgent need for enhanced due diligence and stricter enforcement.

To ensure this Bill achieves its intended goals, we must adopt a balanced approach. First, we need targeted support for small estate agents so they are not disproportionately burdened by compliance costs. Second, enforcement must be robust and proactive, not just a box-ticking exercise. Finally, consumer education must be strengthened, so that buyers, sellers and landlords understand their responsibilities in preventing financial crime.

This Bill is a critical step in the right direction, but its effectiveness will depend on thoughtful implementation and ongoing industry engagement. Let us work together to ensure that while we strengthen our defences against financial crime, we do not unintentionally weaken the competitiveness and sustainability of our real estate industry.

I urge the Minister to take these concerns into serious consideration and to put in place the necessary safeguards and support measures. Let us send a clear message that Singapore remains a place of integrity, fairness and accountability in real estate transactions. I support the Bill.

Mr Deputy Speaker: Minister Indranee Rajah.

5.07 pm

Ms Indranee Rajah: Mr Deputy Speaker, I thank the Members for their comments and their support for this Bill. Let me address the issues raised.

Mr Yip Hon Weng and Mr Vikram Nair asked how this Bill improves the detection of real estate transactions linked to illicit funds and whether the additional obligations are necessary. Today, licensed estate agents, registered salespersons and developers are mandated to perform a robust set of customer due diligence measures on the clients they represent or purchasers. However, a buyer or seller who is unrepresented by an estate agent or salesperson may not be covered by such due diligence measures.

Through this Bill, we are requiring estate agents and salespersons to conduct due diligence measures on unrepresented counterparties, so that both parties in a property transaction are subject to robust checks. This will strengthen our regulatory and governance framework, and help to ensure more timely detection and prevention of illicit activities within the real estate sector.

Mr Don Wee, Mr Neil Parekh and Mr Yip Hon Weng asked how we will support the real estate sector in meeting these requirements, especially salespersons and smaller estate agents. Mr Neil Parekh also asked how estate agents, salespersons and developers can better monitor transactions that may be related to proliferation financing.

I would like to clarify that the required due diligence measures are not new. All estate agents, salespersons and developers are familiar with how these checks should be done, as they are already required to conduct such measures on their own clients or purchasers. The amendments to include proliferation financing will make clear that estate agents, salespersons and developers would also have to screen the necessary parties for proliferation financing risks against relevant designated or sanction lists, which they have already been doing as part of countering terrorism financing.

For estate agents and salespersons specifically, the relevant content on the required due diligence measures is covered in the courses for new salespersons and continuing professional development courses for existing salespersons. To further support our estate agents and salespersons in meeting these obligations, we will be stepping up on training.

For the next continuing professional development cycle, anti-money laundering, countering terrorism financing and countering proliferation financing continuing professional development courses will be made mandatory. This is part of our earlier announced initiative to enhance the continuing professional development framework for the real estate agency industry, by increasing the annual continuing professional development training requirement to 16 hours from the end of this year.

CEA has also set out clear guidelines on how customer due diligence measures should be done, including providing indicators of potential high-risk or suspicious transactions. CEA will update its resource webpage to put out more comprehensive information. This webpage will also be updated regularly to factor in new threats or vulnerabilities that arise over time.

To support smaller players, one of the industry associations in the real estate agency industry, namely the Singapore Estate Agents Association (SEAA), also provides subsidised access to commercial screening services, which its members can subscribe to.

We share Mr Don Wee's concern of a compliance burden on legitimate businesses. Mr Yip Hon Weng already raised the issue of how we will ensure that compliance costs are manageable. I would like to assure the Members that our requirements strike a balance between building a robust regime to uphold our reputation as an attractive and trusted financial centre, while minimising the regulatory burden imposed on the industry.

For example, the degree of checks required varies based on the assessed risk profile of the purchaser or client. The Urban Redevelopment Authority (URA) and CEA had also consulted the industry and took their feedback into account when developing the requirements. Our consultation included major estate agents, industry associations that represent many small and mid-sized estate agents and developers. Stakeholders understood the need for the changes and were supportive.

Mr Neil Parekh asked if the existing regime covers digital property platforms and cross-border transactions. Let me clarify, estate agents and salespersons who facilitate cross-border transactions by doing estate agency work in Singapore, wherein their clients purchase foreign properties will fall under the same compliance regime. Regarding digital property platforms, if an entity only publishes advertisements or disseminates information and does not perform work that constitutes estate agency work, it will not be subject to the requirements of the Estate Agents Act.

Concerning developers, the Housing Developers (Control and Licensing) Act and Sale of Commercial Properties Act cover all developers regulated by URA, including cross-border transactions and transactions on digital property platforms by these developers.

On Mr Don Wee's question on how the Government plans to monitor compliance with these new regulations. Let me assure the Member that CEA and URA already conduct regular inspections on estate agents, salespersons and developers today. During such inspections, CEA and URA check if the appropriate due diligence measures were performed. CEA and URA also conduct ad hoc inspections based on information from other law enforcement agencies, whistle-blowers or complaints received on possible infringements.

We share Mr Neil Parekh's view on the need to maintain Singapore's appeal to legitimate foreign investors while enforcing stricter checks. Having a strong system and measures in place to combat money laundering, terrorism financing and proliferation financing provides certainty and makes our business environment more robust and attractive to foreign investors.

In this regard, CEA and URA adopt a risk-based approach when conducting inspections. For example, estate agents, salespersons and developers that are identified to be of higher risk are prioritised for inspections and subject to more regular inspections. Such risk factors include the customer profile and type of property being purchased or sold.

Mr Neil Parekh asked what the obligations and liabilities of estate agents and developers are, if a client or purchaser refuses to provide necessary due diligence documents. If an estate agent, salesperson or developer is unable to complete the required customer due diligence measures, the estate agent, salesperson or developer cannot proceed with the transaction and must also assess whether a Suspicious Transaction Report should be filed to the Suspicious Transaction Reporting Office.

Mr Don Wee asked about the penalties that will be imposed for non-compliance. Mr Neil Parekh asked if penalties will be calibrated based on the size of the business or intent. The key changes to the penalty framework are as per what I had set out in my opening speech. I would like to clarify that all estate agents, salespersons and developers are required to comply with the requirements in this Bill and are subject to the same maximum penalties in their respective categories, regardless of size. Contraventions of anti-money laundering obligations are assessed based on the facts and circumstances of each case. It would not be appropriate to calibrate penalties based on company size.

On Mr Don Wee's and Mr Neil Parekh's clarifications on this Bill’s implementation timeline, we will bring it into force in June 2025. CEA and URA will share the revised guidelines and implementation details in advance of that.

Mr Yip Hon Weng asked how we would measure the effectiveness of the proposals in this Bill. Potential indications will include the number of severe cases that have been averted due to the existence of this latest set of requirements.

Members Mr Don Wee and Mr Yip Hon Weng asked what efforts will be made to educate the general public about the changes in this Bill and to foster a culture of vigilance against money laundering. The ongoing efforts by URA, CEA and law enforcement agencies will continue. These include educating homebuyers on the need to provide information to facilitate customer due diligence measures, and outreach efforts to the wider society through digital posters on money laundering risks.

Next, Mr Don Wee asked how Government agencies collaborate to ensure a cohesive and effective approach to countering money laundering. Mr Yip Hon Weng also asked what proactive measures are being implemented to identify deceitful activities and prevent them before they occur.

Today, we already have an inter-agency taskforce to deal with money laundering cases. We have reinforced this taskforce by expanding its membership to include all agencies involved in combatting money laundering, including CEA and URA. This will strengthen inter-agency coordination for supervisory and enforcement action. We are also developing a new interface to facilitate data-sharing across Government agencies so that we will have a more comprehensive picture of potential money laundering risks.

Mr Yip Hon Weng asked whether CEA is equipped to deal with evolving money laundering threats. The close partnership between Government agencies ensures that agencies, like CEA and URA, can tap on the various inter-agency platforms to share intelligence, detect suspicious activities and coordinate enforcement.

I turn, now, to the points raised by Assoc Prof Jamus Lim and let me just check my records and my notes of what he said. If I can summarise, essentially, Assoc Prof Jamus Lim suggested that the changes or the amendments in this Bill do not appear to go very far. But at the same time, he, in a sense, actually answered his own question because he said he assumed that the underlying reason for the seemingly limited state of affairs is that we have an already robust regime. And that is exactly right.

So, Assoc Prof Jamus Lim's starting point is correct. We have a very robust regime and that is the reason why we were able to crack that $3 billion money laundering case. But that said, it is clearly not perfect, and we felt, after that, that it was necessary to see what the gaps were and how we could further strengthen an already strong regime.

So, there were two points that Assoc Prof Jamus Lim raised. He asked about the inclusion of proliferation financing, suggesting that this appeared to be an add-on that did not take things very far. And then, the enhancement of penalties which also did not appear to be big moves.

The answer to that is, actually, I think, maybe Assoc Prof Lim may have missed the bigger picture. The bigger picture being this, first, on proliferation financing. As I mentioned in my opening speech, I said, "This Bill seeks to strengthen current penalty frameworks and to further align our regulatory regime with FATF standards and then to make miscellaneous amendments to clarify certain things."

So, that second point, "aligning our regulatory regime with FATF standards". The old FATF standards dealt with money laundering and countering terrorism. But the updated standards include proliferation financing. So, the reason for these amendments is because FATF updated its recommendations to member countries to include mitigation of proliferation financing risks and we are, therefore, updating our legislation to align with the FATF standards. So, that takes care of the proliferation financing part.

But the much bigger picture is this, and Assoc Prof Lim actually did refer to it in the course of his speech, which was, he said, and this is again exactly correct, that the amendments in this Bill are actually pursuant to the recommendations of the Inter-Ministerial Committee on Anti-Money Laundering, which I co-chaired with various other Ministers of State.

And under that report, which is available on the MAS website, there was a whole slew of measures. First, it started out by explaining our already strong system. Then, it talked about the recommendations that we were making and there were three key broad categories falling under the headings of "Prevent", "Detect" and "Enforce".

And under prevention and detection, there was a wide range of measures in the report. Under enforcement, it was recommended that we do a few things, one of which was to strengthen sense-making and information-sharing, and also to enhance legislative levers for law enforcement agencies and then also to continuously review penalty frameworks to ensure they remain proportionate and dissuasive.

So, in other words, the Inter-Ministerial Committee report contain the whole slew of things under those three broad categories; and under the third one, enforcement, there were various things, one of which was to really review the penalty framework. And this is what this Act does. So, this Act implements one small section of what was a very large body of work with extensive recommendations to strengthen our regime. So, I hope that that addresses the question that Assoc Prof Jamus Lim raised.

So, in conclusion, Mr Deputy Speaker, I thank hon Members who have spoken and supported this Bill. This Bill is part of our continuing efforts to bolster our ability to detect and deter money laundering, terrorism financing and proliferation financing within the real estate sector. This ensures that our financial and business ecosystem remains reputable and trusted, and continues to thrive.

5.24 pm

Mr Deputy Speaker: The question is, "That the Bill be now read a Second time."

Ms Indranee Rajah: I believe Assoc Prof Jamus Lim has a clarification.

Mr Deputy Speaker: Are there any clarifications? There are? Yes, Assoc Prof Jamus Lim.

Assoc Prof Jamus Jerome Lim: Thank you, Mr Deputy Speaker, much obliged. Just a quick clarification. I wish to state for the record, I have no quarrel with the proposed amendments to the existing regime, which is why I supported the Bill and I do believe that they will make it stronger, at least on paper.

But the matter in question, if you will, is a question that I also posed in my speech. Would any of the clauses in the current Bill have helped us to potentially apprehend the Fujian Gang any sooner and if not, is the Government implicitly saying that there were indeed no lapses during the incident that we could have learnt from, that would have been identified by the Inter-Ministerial Committee that we could not have put into the legislation being debated today?

Ms Indranee Rajah: I am not sure that the question actually gels, because I think the question is whether any of the clauses would have helped us to catch them sooner. So, I think what Assoc Prof Jamus Lim is talking about is the prevention and actually, more importantly, the detection portion. Because in order to catch them earlier, that is a "detect" provision.

This Bill is primarily concerned with the "enforce" category. So, you enforce only after you have caught. So, this one deals with the penalties, the review of the penalties.

Moving back to the "detect" portion, that was not really so much a matter of legislation. So, the provision in these Bills are not really aimed at the detection portion. And as I mentioned earlier, actually, this was dealt with in the Ministerial Statements. The detection was actually done quite early, if Members recall. Because we explained that the agencies were tracking them for some time and then only took action, I think, several months or maybe almost a year later because they wanted to make sure they caught everybody in the net.

That said, were there things that could be strengthened in order to assist with detection? The answer is yes, because no system is perfect and that is set out in the Inter-Ministerial Committee report as to how to be able to better detect and that includes various measures, including making the individuals in various sectors part of our gatekeepers and part of the system, hence helping and educating them to be able to identify suspicious transactions earlier and also training them on filing Suspicious Transaction Reports. So, I hope that answers.

5.28 pm

Mr Deputy Speaker: Are there any more clarifications for the Minister? If not, I shall pose the question.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Ms Indranee Rajah].

Bill considered in Committee; reported without amendment; read a Third time and passed.