Paper 2 · Anti-Money Laundering (PMLPFTF) · 9 min read
AML Laws, Reporting Duties & Risk Assessment (CDSA, TSOFA, UN Act)
Practise this section (167 questions) → · 3.4 Prevention of Money Laundering, Proliferation Financing and Terrorism Financing (PMLPFTF) obligations, in sets of about 30
Must-know for the exam
- PMLPFTF obligations become Paper 2 unit 3.4 from 1 Jan 2027, naming the CDSA, TSOFA and United Nations Act alongside the PMLPFTF Regulations 2021.
- CDSA s 45: on knowledge or reasonable grounds to suspect, report to STRO as soon as reasonably practicable, completed or not; failing costs up to $250,000 or 3 years.
- TSOFA s 8: whoever holds terrorist property or information about it must inform the police immediately; up to $250,000 or 5 years in the course of business.
- UN Act regulations on North Korea and Iran target proliferation financing: no dealing with designated persons, and an immediate duty to inform the police.
- All these disclosures can go through STRO's SONAR; the salesperson must file and stays primarily responsible, the agency filing unless he already has (reg 11(4)–(4A)).
- Tipping off is a crime: up to $250,000 or 3 years under CDSA s 57, and $250,000 or 5 years under TSOFA s 10B.
- Assess risk for each property before any agreement, even for an existing client; redo CDD on suspicion or doubts about earlier information (reg 4(1)(b); EAA s 44B).
- Physical cash above S$20,000 is a red flag, not a reporting threshold: estate agents have no cash-reporting threshold, and one flag alone rarely shows suspicion.
- CDD failures are disciplinary: up to $5,000 by letter of censure or $100,000 for a salesperson, per contravention for breaches from 1 Jul 2025.
- The law commenced 1 Jul 2025; CEA expected full compliance for transactions from 1 Jan 2026. An ML, PF or TF conviction anywhere bars registration.
On this page · 6 sections
From 1 Jan 2027 the prevention of money laundering, proliferation financing and terrorism financing (PMLPFTF) is its own Paper 2 unit, 3.4, and four of its five learning outcomes are set at the apply level (CEA, RES Examination Syllabus 2027). The customer due diligence steps are on the companion page. This page covers what the unit adds: the four laws and the different reporting duty each imposes, risk assessment of existing clients as well as new ones, how to read red flags, and the legal and reputational consequences of getting it wrong.
Upcoming change · 1 Jan 2027
Unit 3.4 is examined from the first 2027 sitting. The 2017 syllabus only listed the PMLPFTF Regulations; the 2027 unit adds the CDSA, the TSOFA and the United Nations Act by name.
Four laws, four jobs
| Law | What it does for an estate agent | Who enforces |
|---|---|---|
| Estate Agents Act Part 4A and the PMLPFTF Regulations | The preventive duties: customer and counterparty due diligence, sanctions screening, records, the agency's compliance programme | CEA, through disciplinary action (EAA s 44E) |
| CDSA (Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act) | Makes money laundering a crime; imposes the suspicious transaction report duty (s 45) and the tipping-off offence (s 57) | Police and the courts |
| TSOFA (Terrorism (Suppression of Financing) Act) | Makes terrorism financing a crime; requires anyone holding terrorist property or information about it to inform the police immediately (s 8), and anyone with information that may prevent a terrorism-financing offence to disclose it immediately (s 10) | Police and the courts |
| United Nations Act | Gives effect to UN Security Council sanctions through regulations, such as those on North Korea and Iran, which target proliferation financing: no dealing with designated persons, and a duty to inform the police | Police and the courts |
Proliferation financing means financing the spread of weapons of mass destruction (EAA s 3). Terrorism financing can use clean money, which is why it is caught by screening names, not by tracing the source of funds. Money laundering moves dirty money through placement, layering and integration; property is used at the integration stage (CEA, Guide on the PMLPFTF Regulations, 30 Jun 2025, paras 2.1–2.3).
Reporting: who, to whom, and how fast
| Trigger | Report to | Deadline | Penalty for not reporting |
|---|---|---|---|
| You know or have reasonable grounds to suspect that property is linked to crime, learnt at work | A Suspicious Transaction Reporting Officer (STRO), filed on SONAR | As soon as is reasonably practicable, whether or not the deal completes | $250,000 or 3 years, or both (CDSA s 45(3)) |
| You hold property of, or information about a transaction in property of, a terrorist or terrorist entity | The Commissioner of Police (any police officer) | Immediately | $250,000 or 5 years if acting in the course of business (TSOFA s 8(3)) |
| You hold property of, or information about, a designated person under UN sanctions regulations | The Commissioner of Police or an authorised person | Immediately | Up to $500,000 or 10 years for an offence against the regulations (UN Act s 5) |
- One channel for all three. The PMLPFTF Regulations define a suspicious transaction report to include a disclosure under CDSA s 45, TSOFA s 8 or s 10, or the UN regulations, made through STRO's electronic system (reg 2). Using SONAR does not relax the TSOFA deadline: it is still immediately.
- Who files. The salesperson with reason to suspect must file (reg 11(4)) and stays primarily responsible. Once he tells the agency's designated officer, the agency must file unless he already has (reg 11(4A); CEA industry briefing, 19 Sep 2025). The agency files through its CorpPass account (Guide 8.4.1).
- Not CEA. Reports go to STRO or the police, never to CEA, and CEA will not tell you whether to file (CEA PMLPFTF FAQ, 29 Dec 2025, Q78). You report suspicion; you are not expected to investigate.
- Tipping off is a separate crime: disclosing anything likely to prejudice an investigation or a report carries up to $250,000 or 3 years under CDSA s 57, and $250,000 or 5 years under TSOFA s 10B.
The trap
Same penalty ceiling, different jail terms and deadlines. A missed STR under the CDSA is $250,000 or 3 years, "as soon as is reasonably practicable". A failure to report terrorist property under the TSOFA is $250,000 or 5 years, and the duty is immediate. Swapping 3 and 5 years, or STRO and the police, is the classic distractor.
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Quick self-check · 5 questions
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Under the CDSA, to whom is a suspicious transaction report made, how fast, and what is the penalty for not filing?Show answer
To a Suspicious Transaction Reporting Officer, filed on SONAR, as soon as is reasonably practicable, whether or not the deal completes. Failing to report carries up to $250,000 or 3 years, or both (CDSA s 45(3)).
A salesperson holds information about a transaction in a terrorist's property. Whom must he tell, how fast, and what is the maximum penalty?Show answer
The Commissioner of Police (any police officer), immediately (TSOFA s 8). Acting in the course of business, the maximum is $250,000 or 5 years. A report through STRO's system counts, but only if it is made immediately.
Is physical cash above S$20,000 a threshold that obliges an estate agent to file a report?Show answer
No. Estate agents have no cash-reporting threshold. CEA lists physical cash above S$20,000 as a red flag to weigh with others, and the figure covers physical cash only, not cheques or transfers.
A client you served last year asks you to sell another property. Must his ML/PF/TF risk be assessed again?Show answer
Yes. Before the client enters any agreement for each property, assess and document his risk (reg 4(1)(b)). Due diligence is also triggered again on suspicion, or on doubts about information obtained earlier (EAA s 44B(2)).
What can CEA and a Disciplinary Committee impose on a salesperson for a CDD or screening breach on or after 1 Jul 2025?Show answer
Disciplinary, not criminal, penalties: a letter of censure up to $5,000, or a Disciplinary Committee penalty up to $100,000, plus suspension or revocation, per contravention. Not filing an STR is a separate crime under CDSA s 45.
Common questions
- What is the difference between an STR under the CDSA and a report under the TSOFA?
- Under CDSA s 45, anyone who knows or has reasonable grounds to suspect, in the course of work, that property is linked to crime must disclose it to a Suspicious Transaction Reporting Officer as soon as is reasonably practicable (up to $250,000 or 3 years for failing to). Under TSOFA s 8, anyone holding terrorist property or information about a transaction in it must inform the Commissioner of Police immediately (up to $250,000 or 5 years for someone acting in the course of business). Estate agents can make both disclosures through STRO's SONAR system.
- Is there a cash amount above which a property agent must report?
- No. Estate agents have no cash-reporting threshold. CEA lists physical cash of more than S$20,000 as a red flag, an indicator to weigh with others, not a trigger for an automatic report (CEA Guide, Annex A, 30 Jun 2025; FAQ Q60, 29 Dec 2025).
- Does a salesperson need to redo due diligence for an existing client?
- Yes, for each new property transaction: the client's risk must be assessed and documented before the client enters any agreement for that property. Due diligence is also triggered again on suspicion of money laundering or on doubts about information obtained earlier, and clients in a continuing relationship are subject to ongoing monitoring. Source: Estate Agents (PMLPFTF) Regulations 2021 regs 4 and 9; Estate Agents Act s 44B.
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