Adoption agencies will face more stringent rules under the new Adoption of Children Bill to deter undesirable behaviour that compromises a child's welfare.
Every adoption agency must make its fees public, to enable prospective parents to be more informed about the cost of adoption.
The law currently prohibits any payment or reward to the biological parents or the adoptive parents for the adoption, unless it is sanctioned by the court. This is to prevent the child from being treated like a commodity.
Under the new Bill, the Ministry of Social and Family Development (MSF) plans to regulate the categories of adoption-related payments to ensure that adoption agencies charge only for reasonable items.
The payments that are permitted will be legislated, and would cover items such as medical bills related to the child's birth, legal fees and fees for adoption-related services.
Any payment outside the permitted categories will be an offence.
It would become an offence to obtain parental consent to give a child up for adoption through fraud or duress, or to provide misleading or false information or documentation.
The proposed law will also have extraterritorial effect - if the offence is committed outside Singapore, the offender may be dealt with as if the offence was committed in Singapore.
As adoption matters often involve multiple countries, the extraterritorial effect is needed to act as a deterrent, said the MSF.
Adoption fees can go up to $30,000, adoption agents have previously said. The fee covers costs such as the birth mother's hospital bills, legal fees and adoption agency fees.
Mrs Jennifer Heng, director of Safe Place, which helps pregnant women in distress, said the tougher regulations targeting for-profit adoption agents are long overdue.
Ms Siti Adilah Abu Bakar, director of Apkim Centre for Social Services, which provides adoption services, said she has met some birth mothers who would compare the red packets offered by different adoption agents or prospective parents.
Mr James Tan, chief executive of Touch Community Services, said deterring undesirable practices leads to more transparent and ethical adoption practices.
He added: "This also prevents the adoption process from turning into a transaction - one which is centred on picking and choosing, and buying and selling."