30 October 2018
On 1 October 2018, the Developers (Anti-Money Laundering and Terrorism Financing) Bill (“Bill”) was tabled in Parliament for first reading. The Bill seeks to amend the Housing Developers (Control and Licensing) Act (“HDCL Act”) and the Sale of Commercial Properties Act (“SCP Act”) to give effect to certain recommendations of the Financial Action Task Force (“FATF”) regarding anti-money laundering and countering the financing of terrorism (“AML/CFT”) which are applicable to developers.
FATF is an inter-governmental body that was established to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and the financing of proliferation, and other related threats to the integrity of the international financial system. The FATF Recommendations are the internationally endorsed global standards against money laundering and terrorism financing.
Key features of AML/CFT measures for developers
New provisions will be introduced in the HDCL Act and the SCP Act to require a licensed housing developer under the HDCL Act or a developer under the SCP Act to, among other things:
- Perform customer due diligence measures, as well as additional measures which will be prescribed in subsidiary legislation to be issued under the HDCL Act and the SCP Act;
- Keep records in respect of the customer due diligence measures and other measures it is required to perform, and to make such records available to the Controller of Housing (“Controller”), inspector and persons appointed by the Controller upon request;
- Disclose to a Suspicious Transaction Reporting Officer by way of a suspicious transaction report if the developer knows or has reasonable grounds to suspect any matter mentioned in section 39(1) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (“CDSA”). Section 39(1) of the CDSA provides that a person who knows or has reasonable grounds to suspect that any property represents the proceeds of, or was used or is intended to be used in connection with, any act which may constitute drug dealing or criminal conduct is required to disclose the knowledge or suspicion or the information or other matter on which that knowledge or suspicion is based to a Suspicious Transaction Reporting Officer, if the information or matter came to his attention in the course of his trade, profession, business or employment;
- Implement adequate programmes and measures to prevent money laundering and terrorism financing (“ML/FT”).
It will be an offence for a licensed housing developer under the HDCL Act or a developer under the SCP Act to open or maintain any account or hold or receive moneys from an anonymous source or from a purchaser with an obviously fictitious name.
In addition, the HDCL Act will be amended to enable the Controller to refuse a housing developer’s licence to:
- An applicant previously convicted of any ML/FT offence;
- An applicant which is a company, partnership, society or limited liability partnership if it has an individual previously convicted of a ML/FT offence holding, or who is to hold, a responsible position in the applicant; and
- An applicant which is a company if it has a substantial shareholder who is previously convicted of a ML/FT offence, or has an individual previously convicted of a ML/FT offence holding a responsible position in the substantial shareholder.
A responsible position is defined in the HDCL Act to mean a partner in a partnership, a director, manager or secretary of a company or a person in a position analogous to that of a director, manager or secretary, and a president, secretary or treasurer of a society or a person in a position analogous to that of a president, secretary or treasurer.