Property devs should match buyer checks to transaction risks: URA

The guidance targets illicit financing such as money laundering.

Property developers should match buyer checks to each transaction’s risk profile instead of applying the same checks to all purchasers, according to an Urban Redevelopment Authority (URA) circular. 

The guidance is part of a risk-proportionate approach to prevent money laundering (ML), proliferation financing (PF), and terrorism financing (TF) in property sales.

The circular took effect immediately from 7 July.

“For the vast majority of purchasers who are not assessed to be of higher ML, TF or PF risks, developers are only required to conduct customer due diligence checks,” the URA said.

This means developers do not need to check the source of wealth or source of funds for buyers who are not assessed to be high-risk.

However, stricter checks will still apply to higher-risk purchasers, including foreign politically exposed persons and their family members or close associates, as well as individuals from jurisdictions flagged for weak controls against illegal financing.

Developers must file a suspicious transaction report if they suspect illicit activities or funds. They should also stop dealings with purchasers on sanctioned lists.

URA said checks on higher-risk purchasers should be reasonable, focused on relevant information, and avoid asking for unnecessary documents, such as long-dated financial or employment records.

For transactions involving a single property purchase at prices in line with market norms, fewer checks would generally be expected.