PART 2 | CUSTOMER DUE DILIGENCE MEASURES |
| Prescribed customer due diligence measures |
| 3. For the purpose of section 12B(1) of the Act, a licensed housing developer must perform the customer due diligence measures prescribed in this Part in relation to each of its purchasers of a unit of any housing accommodation in a building project undertaken by the licensed housing developer. |
| Licensed housing developer to perform customer due diligence measures in certain circumstances |
4.—(1) A licensed housing developer must perform the customer due diligence measures specified in rules 5, 6, 7 and 10(1)(a) and (b) in any of the following circumstances:| (a) | before —| (i) | granting to a purchaser an option to purchase a unit of any housing accommodation in a building project undertaken by that licensed housing developer; or | | (ii) | accepting any sum of money (including any booking fee) from a purchaser in relation to the intended purchase of such a unit, |
| | (b) | when both of the following conditions are satisfied:| (i) | a purchaser of a unit of any housing accommodation in a building project undertaken by the licensed housing developer intends to assign or has assigned to a person (called in this rule an assignee purchaser) all the purchaser’s rights, title and interest, under an agreement made between the purchaser and the licensed housing developer, for the sale and purchase of the unit of housing accommodation; | | (ii) | the licensed housing developer receives written notice from the assignee purchaser requiring the licensed housing developer to enter into a new agreement with the assignee purchaser for the sale and purchase of the unit of housing accommodation, under rule 16(1) of the Housing Developers Rules (R 1); |
| | (c) | when the licensed housing developer has, at any other time, reason to suspect that a purchaser is engaging in money laundering or terrorism financing; | | (d) | when the licensed housing developer has reason to doubt the veracity or adequacy of information obtained from earlier customer due diligence measures about the same customer. |
(2) A licensed housing developer may choose not to perform or complete performing any measure it is required to perform under this Part in relation to any purchaser if the licensed housing developer has reason —| (a) | to suspect that the transaction with or intended with the purchaser involves money laundering or terrorism financing; and | | (b) | to believe that performing the measure will tip off the purchaser or any other person associated with the purchaser. |
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(3) Where the licensed housing developer is unable or chooses not to complete performing any customer due diligence measure it is required to perform under this Part in relation to any purchaser, the licensed housing developer —| (a) | must not do any of the following relating to any housing accommodation in a building project undertaken by that licensed housing developer:| (i) | grant to the purchaser an option to purchase a unit of the housing accommodation; | | (ii) | accept any sum of money (including any booking fee) from the purchaser in relation to the intended purchase of any such unit; | | (iii) | enter into a sale and purchase agreement with the purchaser for a unit of the housing accommodation; |
| | (b) | must determine whether to file a suspicious transaction report in accordance with section 12D of the Act; and | | (c) | must record the basis of its determination under sub‑paragraph (b). |
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(4) For the purposes of paragraph (3), a licensed housing developer is regarded as being unable to complete the customer due diligence measures it is required to perform under this Part if —| (a) | the licensed housing developer is unable to obtain, or to verify, any information required as part of those customer due diligence measures; or | | (b) | the licensed housing developer does not receive a satisfactory response to any inquiry it makes in relation to any information required as part of those customer due diligence measures. |
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| General customer due diligence measures for purchaser |
5. Subject to rule 9, the following customer due diligence measures must be performed by a licensed housing developer in relation to every purchaser, at the relevant time specified in rule 4(1):| (a) | ascertain the identity of the purchaser and obtain the purchaser’s identifying information; | | (b) | where the purchaser is an entity or a legal arrangement —| (i) | obtain the documents that constitute, regulate and bind the purchaser, being the following, or their equivalent:| (A) | in the case of a body corporate, the constitution, or the memorandum and articles of association, of the body corporate; | | (B) | in the case of a partnership or limited partnership, the partnership deed or agreement; | | (C) | in the case of an express trust, the trust deed of the trust; | | (D) | in the case of a society or an unincorporated association, the rules of the society or unincorporated association; | | (E) | in the case of any other entity or legal arrangement, the instrument or document that constitutes or establishes the entity or legal arrangement; and |
| | (ii) | ascertain the identity of every individual holding a senior management office in the purchaser and obtain the individual’s identifying information; |
| | (c) | understand and obtain information about the purchaser’s purpose for purchasing a unit of any housing accommodation in a building project undertaken by that licensed housing developer. |
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| Customer due diligence measures for purchaser that is entity or legal arrangement |
6.—(1) Subject to paragraph (3) and rule 9, the following customer due diligence measures must be performed by a licensed housing developer at the relevant time specified in rule 4(1), in relation to every purchaser that is an entity or a legal arrangement:| (a) | determine whether the purchaser has any beneficial owner; | | (b) | take reasonable measures to ascertain the identity and obtain the identifying information of each beneficial owner of the purchaser, if any; | | (c) | understand the nature of the purchaser’s business; | | (d) | understand the ownership and control structure of the purchaser. |
(2) Under paragraph (1)(a) and (b), the licensed housing developer must do as follows: | (a) | if the purchaser is an entity —| (i) | ascertain the identity and obtain the identifying information of each individual (if any) who ultimately has a controlling ownership interest in the purchaser, according to the law and instrument under which the purchaser is constituted; | | (ii) | if it is doubtful whether all or any of the individuals who ultimately have a controlling interest in the purchaser are its beneficial owners, or where no individual exerts control through ownership interests, ascertain the identity and obtain the identifying information of each individual (if any) exercising control of the purchaser through other means; or | | (iii) | if no individual is identified under sub‑paragraphs (i) and (ii), ascertain the identity and obtain the identifying information of every individual holding a senior management office in the purchaser; |
| | (b) | if the purchaser is a legal arrangement —| (i) | in any case where the legal arrangement is a trust, ascertain the identity and obtain the identifying information of —| (A) | the settlor; | | (B) | each trustee; | | (C) | the protector, if any; | | (D) | each beneficiary; and | | (E) | any other individual exercising ultimate effective control over the trust; or |
| | (ii) | in any case where the legal arrangement is not a trust, ascertain the identity and obtain the identifying information of each person holding a position equivalent or similar to any position in sub‑paragraph (i). |
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(3) However, a licensed housing developer need not ascertain the identity and obtain the identifying information of each beneficial owner of the purchaser where the purchaser is —| (a) | an entity that is listed on the Singapore Exchange and is subject to disclosure requirements by the Singapore Exchange; | | (b) | a financial institution that is listed in Appendix 1 of the direction known as MAS Notice 626 issued by the Monetary Authority of Singapore; or | | (c) | a financial institution incorporated or established outside Singapore that is subject to and supervised for compliance with such requirements for the prevention of money laundering and terrorism financing, as are consistent with standards set by the FATF. |
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| (4) Where a licensed housing developer determines that the purchaser is an entity specified in paragraph (3)(a), (b) or (c), the licensed housing developer must record the basis for the determination. |
(5) In paragraph (3) —| “financial institution” has the meaning given by section 27A(6) of the Monetary Authority of Singapore Act 1970 read with section 27A(7) of that Act; |
| “Monetary Authority of Singapore” means the Monetary Authority of Singapore established by section 3 of the Monetary Authority of Singapore Act 1970. |
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| Customer due diligence measures for person purporting to act on behalf of purchaser |
7. At the relevant time specified in rule 4(1), a licensed housing developer must perform the following customer due diligence measures in relation to a person purporting to act on behalf of a purchaser:| (a) | ascertain and obtain the identifying information of the person; | | (b) | ascertain whether the person is authorised to act on behalf of the purchaser, including by obtaining the appropriate evidence in writing of the authorisation and appointment of the person by the purchaser to act on the purchaser’s behalf. |
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| Enhanced customer due diligence measures |
8.—(1) Where any of the circumstances mentioned in paragraph (2) exists, a licensed housing developer must, in addition to performing the customer due diligence measures specified in rules 5, 6 and 7, perform enhanced customer due diligence measures.(2) The circumstances requiring enhanced customer due diligence measures to be performed are any of the following:| (a) | the purchaser, or a beneficial owner of the purchaser, in any transaction is —| (i) | a foreign politically‑exposed person; | | (ii) | a family member of a foreign politically‑exposed person; or | | (iii) | a close associate of a foreign politically‑exposed person; |
| | (b) | the purchaser, or a beneficial owner of the purchaser —| (i) | is a resident of or originates from a relevant country; or | | (ii) | is a person that the Controller has notified the licensed housing developer to be a person that presents a high risk of money laundering or terrorism financing; |
| | (c) | the licensed housing developer has, under rule 10(1), assessed that the purchaser or a beneficial owner of the purchaser may present a high risk of money laundering or terrorism financing. |
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(3) The enhanced customer due diligence measures to be performed by a licensed housing developer are as follows:| (a) | a person holding a senior managerial or executive position in the licensed housing developer must specially approve before the licensed housing developer does any of the following:| (i) | grants to the purchaser concerned an option to purchase a unit of any housing accommodation in a building project undertaken by that licensed housing developer; | | (ii) | accepts any sum of money (including any booking fee) from the purchaser concerned in relation to the intended purchase of that unit; | | (iii) | enters into an agreement with the purchaser concerned for the sale and purchase of a unit of any housing accommodation in a building project undertaken by that licensed housing developer; |
| | (b) | take reasonable measures to establish the income level, source of wealth, and the source of funds, of the purchaser concerned and, if that purchaser is an entity or a legal arrangement, of the beneficial owner or owners of the purchaser; | | (c) | where the licensed housing developer suspects or has reason to believe that the purchaser concerned is not acting on the purchaser’s own behalf or is trying to conceal the identity of the true purchaser, ascertain the identity of the true purchaser and obtain the true purchaser’s identifying information; | | (d) | conduct enhanced ongoing monitoring of the transactions entered into with the purchaser so as to identify suspicious transactions, including transactions or patterns of transactions that are inconsistent with the purchaser’s profile; | | (e) | take all reasonable measures as are appropriate to the risks of money laundering or terrorism financing in relation to the purchaser. |
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| (4) A licensed housing developer must implement appropriate policies, controls and procedures to determine whether the circumstances mentioned in paragraph (2) exist. |
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| Simplified customer due diligence measures |
9.—(1) If all of the following conditions are met, a licensed housing developer may perform simplified customer due diligence measures in relation to its purchasers, instead of performing the customer due diligence measures specified in rules 5, 6 and 7:| (a) | the licensed housing developer has, under rule 10(1), assessed the risk of money laundering and terrorism financing in relation to the purchaser to be low; | | (b) | the simplified customer due diligence measures are commensurate with the level of the risk of its purchasers engaging in money laundering and terrorism financing as identified by the licensed housing developer; | | (c) | none of the circumstances mentioned in rule 8 requiring enhanced customer due diligence measures exists. |
| (2) Simplified customer due diligence measures are such measures as a licensed housing developer considers adequate to effectively ascertain the identity of the purchaser, beneficial owner of the purchaser or any person who is acting on behalf of the purchaser, in any particular transaction. |
(3) Where a licensed housing developer decides to carry out simplified customer due diligence measures under paragraph (1), the licensed housing developer must record —| (a) | the details of the risk assessment that formed the basis for the decision; and | | (b) | the simplified customer due diligence measures carried out. |
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10.—(1) A licensed housing developer must —| (a) | perform, in relation to each purchaser or beneficial owner of a purchaser, an adequate analysis of the risks of the purchaser engaging in money laundering or terrorism financing or both; | | (b) | document the analysis and the conclusions reached; and | | (c) | keep the analysis up to date. |
(2) For the purpose of determining whether a person mentioned in paragraph (1)(a) may present a high risk of money laundering or terrorism financing, the licensed housing developer must consider all of the following:| (a) | whether the person is a resident of or originates from —| (i) | a relevant country; | | (ii) | a foreign country that the FATF (by a public statement, notice or directive published on its official website at https://www.fatf‑gafi.org/) identifies as a foreign country subject to increased monitoring; or | | (iii) | a foreign country that the Controller has notified the licensed housing developer to be a foreign country with inadequate measures to prevent money laundering or terrorism financing; |
| | (b) | whether the transaction with or intended with the person is complex or unusually large, or is part of an unusual pattern of transactions which have no apparent economic or visible lawful purpose. |
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| (3) A licensed housing developer must implement appropriate policies, controls and procedures to determine whether the circumstances mentioned in paragraph (2)(a) exist. |
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| Customer due diligence measures for existing purchasers |
11.—(1) A licenced housing developer must, based on the licensed housing developer’s assessment of materiality and risk, perform the customer due diligence measures and enhanced customer due diligence measures mentioned in rules 4 to 10 in relation to any existing purchaser, taking into account —| (a) | when customer due diligence measures or enhanced customer due diligence measures (if any) were last applied to that purchaser; and | | (b) | the adequacy of information already obtained by the licensed housing developer in relation to that purchaser. |
(2) For the purpose of paragraph (1), a licensed housing developer may use information previously obtained from customer due diligence measures or enhanced customer due diligence measures performed in relation to the same purchaser, unless the licensed housing developer has doubts about —| (a) | the veracity or adequacy of the information; or | | (b) | whether the information is up‑to‑date. |
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