Paper 2 · AML / CFT
AML/CFT for Property Agents: CDD, Source of Funds & STR
Must-know for the exam
- Estate agents are gatekeepers under the CDSA, the TSOFA and CEA's PMLPFTF Regulations 2021; since the 2025 overhaul the risk screened is ML, PF (proliferation financing) and TF.
- Customer Due Diligence (CDD) means verifying the customer's identity and beneficial owner, understanding purpose and source of funds before acting, then ongoing monitoring of the relationship.
- Enhanced Due Diligence applies to higher-risk cases (large cash, complex structures); a foreign PEP triggers EDD automatically, a domestic PEP only where risk is assessed higher.
- On reasonable grounds to suspect money laundering or terrorism financing, a Suspicious Transaction Report (STR) goes to the STRO even if the deal does not proceed; non-reporting is an offence.
- The salesperson who forms the suspicion is primarily responsible for filing via SONAR; the agency must file if they do not, and tipping off the client is an offence.
- CDD records must be kept for at least 5 years, and a long relationship with a 'trusted' repeat client is no exemption from CDD.
- The 2025 overhaul added Unrepresented Counterparty Due Diligence (UCPDD): due diligence on the other side of a deal where that party has no agent of their own.
Property is a classic money-laundering vehicle, so estate agents are gatekeepers with legal duties — under the CDSA (Corruption, Drug Trafficking and Other Serious Crimes Act), the Terrorism (Suppression of Financing) Act (TSOFA), and CEA's Estate Agents (Prevention of Money Laundering, Proliferation Financing and Terrorism Financing) Regulations 2021 — the PMLPFTF Regulations. The exam expects the mechanics, not just awareness.
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Practise exam-style questions on AML / CFT — with instant answers and explanations.
Practise AML / CFT questions →Exam-style questions on this topic
- RES exam question on AML / CFT: A buyer in a $5M transaction insists on paying a large portion in cash and is reluctant…
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- RES exam question on AML / CFT: An estate agent applies its AML obligations
- RES exam question on AML / CFT: A question concerns AML record-keeping by an estate agency
Common questions
- What is customer due diligence (CDD) for a property agent?
- CDD is the process of verifying a client's identity (and, where relevant, the beneficial owner behind them) before acting, as part of an agent's anti-money-laundering obligations.
- When does an agent file a Suspicious Transaction Report (STR)?
- When there are reasonable grounds to suspect that funds or a transaction are linked to criminal conduct, money laundering, proliferation financing or terrorism financing — even if the deal does not ultimately proceed. The salesperson who forms the suspicion is primarily responsible for filing, through the police's SONAR portal; if they report it to their agency but do not file, the agency must file instead. Never tip off the client.
- Must I do due diligence on the other party if they have no agent?
- Yes. Under the revised PMLPFTF Regulations, estate agents and salespersons must conduct Unrepresented Counterparty Due Diligence (UCPDD) on the other side of a sale or lease where that party is not represented by an agent — the same identity, beneficial-owner, PEP, sanctions-screening and risk-assessment checks you do for a client. Carry them out once it is clear the deal is likely to proceed, but before the parties enter into any agreement. Ongoing monitoring is the one duty that does not extend to an unrepresented counterparty.
- Do the AML checks apply to HDB rental transactions?
- HDB residential rentals — whole flat or room — have been exempt from CDD and UCPDD since 1 July 2025, because of their lower risk profile. The exemption does not cover anything else: all sales and purchases, and all non-HDB rentals, still require both. And it never removes the duty to file a Suspicious Transaction Report if something suspicious surfaces during the work.
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