Penalties for Estate Agents' Failure to Perform Customer Due Diligence or Report Suspicious Transactions or Activities
Ministry of National DevelopmentSpeakers
Summary
This question concerns whether the Government will work with the Council for Estate Agencies (CEA) to issue sentencing guidelines for financial penalties based on transaction size or commissions when agents fail to perform due diligence. Mr Leong Mun Wai raised this query regarding breaches of the Estate Agents Act and regulations for preventing money laundering and terrorism financing. Minister for National Development Desmond Lee responded that the CEA Disciplinary Committee, an independent tribunal, already assesses factors like transaction size, potential commissions, and culpability when determining penalties. He noted that the committee refers to past sentencing precedents and holistic case circumstances to ensure appropriate disciplinary outcomes. Information on the CEA’s sentencing approach and past sentences is published on its website for public reference.
Transcript
57 Mr Leong Mun Wai asked the Minister for National Development (a) whether the Government will consider working with the Council for Estate Agencies to issue a set of sentencing guidelines setting out how the financial penalties for failure to perform customer due diligence measures or report suspicious transactions or activities, as provided in the Estate Agents Act and the Prevention of Money Laundering and Financing of Terrorism regulations, can be varied based on the size of the suspicious transactions or the potential commission earned; and (b) if not, why.
Mr Desmond Lee: Under the Estate Agents Act 2010 (EAA) and Estate Agents (Prevention of Money Laundering and Financing of Terrorism) Regulations 2021, property agencies and property agents are required to perform due diligence checks on their clients before commencing any business relationship or facilitating transaction with them. Failure to do so is a breach under EAA and may result in disciplinary action by a Council for Estate Agencies (CEA) Disciplinary Committee (DC).
The DC is an independent tribunal that assesses each case holistically to determine the appropriate penalties. DC will consider all relevant facts and circumstances of the case, including the size of the transaction, the potential commission earned, the extent of the offender’s culpability, the degree of harm caused and whether there are other aggravating or mitigating factors. In meting out the appropriate penalties, DC may refer to past sentencing precedents of similar cases and adjust accordingly to address case-specific circumstances.
Information on CEA’s sentencing approach and the sentences meted out by DCs in the past are published on CEA’s website.