Singapore Real Estate Under Investigation for Suspected Money Laundering Links

02 Sep, 2023

Singapore Real Estate Under Investigation for Suspected Money Laundering Links

Following high-end property raids that led to the recovery of nearly $1 billion in laundered assets in August, the Council for Estate Agents (CEA) in Singapore is launching an investigation into several property agents to determine if they were involved in illicit transactions.

In response to these raids, the CEA has issued a reminder to real estate firms regarding their obligations under the Estate Agents Act 2010 (EAA). Failure to comply with the EAA and its subsidiary legislation may result in disciplinary action by the CEA's Disciplinary Committee, including the imposition of financial penalties, license revocation, or suspension.

The investigation into money laundering primarily focuses on non-financial sectors. The nationwide raids were initiated based on suspicious transaction reports (STRs) from various financial institutions, prompting the Monetary Authority of Singapore (MAS) and Commercial Affairs Department (CAD) to initiate an investigation.

Assets recovered during the raids included cash and non-financial assets, such as luxury properties. Prohibition of disposal orders was issued for at least 105 properties, collectively valued at around $831 million.

The investigation also extends its focus to other sectors involved in the money laundering scheme, including precious stones and metals traders and the international gambling industry.

To combat money laundering in the Singapore real estate sector, the CEA has issued reminders of essential anti-money laundering and counter-terrorist financing (AML/CFT) obligations for firms in the industry. These obligations include conducting customer due diligence (CDD) before entering into business relationships, reporting suspicious transactions to the Singapore Police Force, maintaining CDD records for at least five years, and implementing internal AML/CFT controls and policies, particularly for estate agents.

Singapore has taken steps to enhance its AML/CFT framework, aiming to remain a global leader in the fight against financial crime. Firms in the sector are advised to review their obligations under Singaporean law, starting with the recent notice from the CEA. Additionally, they should familiarize themselves with key red flags outlined in the CEA's Guide on Estate Agents (Prevention of Money Laundering and Financing of Terrorism) Regulations 2021, including negative news about clients, clients unwilling to associate their names with property transactions, lack of interest in property value, transactions inconsistent with a client's known business activities, and a preference for cash or anonymous payments.