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Singapore Strengthens Regulations Against Money Laundering And Terrorism Financing

World Affairs

Open Eyes Opinion {source: SGgov}

Singapore

 

MAS Strengthens Regulations against Money Laundering and Terrorism Financing

 Singapore, 24 April 2015…The Monetary Authority of Singapore (MAS) today issued revised Notices to financial institutions (FIs) on anti-money laundering (AML) and countering the financing of terrorism (CFT).

The revisions are benchmarked against international best practices and the latest recommendations of the Financial Action Task Force (FATF), the global standard-setter for AML/CFT measures.

Key changes to the AML/CFT Notices include:

a) requiring more comprehensive enterprise-wide ML/TF risk assessment to complement risk assessment of individual customers;
b) elaborating on the requisite steps to identify and verify beneficial ownership of companies, LLPs and trusts;
c) introducing a new category of Politically Exposed Persons (PEPs)1; and
d) additional requirements for cross-border wire transfers exceeding S$1,500.

Industry feedback was sought and incorporated into the revised AML/CFT Notices. Details are set out in MAS’response to the industry feedback. MAS has also updated the Guidelines to the AML/CFT Notices to provide additional supervisory guidance.

Mr Ong Chong Tee, Deputy Managing Director, MAS, said, “Singapore is committed to the global effort to combat transnational crime. The financial sector is an important stakeholder. MAS requires financial institutions to implement rigorous anti-money laundering and counter-terrorism financing (AML/CFT) measures to detect and deter illicit funds. This latest round of revisions to the AML/CFT Notices and Guidelines is an affirmation of our continued vigilance to stem such risks.”

The revised MAS AML/CFT Notices and Guidelines can be found at http://www.mas.gov.sg/Regulations-and-Financial-Stability/Regulatory-and-Supervisory-Framework/Anti-Money-Laundering-and-Countering-the-Financing-of-Terrorism/Notices-and-Guidelines.aspx.

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Backgound Notes on FATF and the FATF Recommendations

Singapore has been a member of the Financial Action Task Force (FATF) since 1992. The FATF is the global standard-setter for measures to combat money laundering, terrorist financing, and the financing of proliferation.  It is an intergovernmental body comprising 36 members, with the participation of over 190 jurisdictions through a global network of FATF-style regional bodies.

The FATF Recommendations are the international standards that sets out what countries should do to have effective systems for preventing and addressing money laundering, terrorist financing and the financing of proliferation.  The Recommendations set out

  • the measures that countries should have in place within their criminal justice and regulatory systems;
  • the preventive measures to be taken by financial institutions and other businesses and professions;
  • the measures to ensure transparency on the ownership of legal persons and arrangements;
  • the establishment of competent authorities with appropriate functions, and powers and mechanism for cooperation; and
  • the arrangements to cooperate with other countries.

In the last FATF mutual evaluation of Singapore, the FATF noted that:

  • The obligations on financial institutions to prevent money laundering and terrorist financing are contained in AML/CFT Notices issued by MAS and generally covered the full range of measures required by the FATF Recommendations. In particular, customer due diligence requirements are very broad and are effectively implemented by Singaporean financial institutions.
  • MAS uses a risk-based approach to financial supervision, and has a broad range of powers to monitor and ensure that financial institutions comply with AML/CFT measures, including powers of off-site surveillance, auditing and on-site visits and inspections.
  • Given the criminal and range of administrative sanctions that are available, and have been
    applied for breaches in the AML/CFT Notices, the FATF concluded that Singapore’s AML/CFT sanctions regime is effective, proportionate and dissuasive. Sanctions refer to the penalties (both criminal and administrative) that can be imposed for money laundering  and terrorist financing offences.

The revised FATF Standards (2012) has put additional emphasis on countries to have a coordinated approach to identify, assess and understand its money laundering and terrorist financing risks. In February 2013, the FATF released their Guidance on National Money Laundering and Terrorist Financing Risk Assessment to assist countries in the conduct of risk assessment at the country or national level. Please refer to the FATF website for more details on the Guidance document.

1 PEP refers to a person entrusted with prominent public functions. The new category of PEP introduced into the Notices is the “international organization PEP”, which refers to a person who is or has been entrusted with prominent public function in an international organization. This change is to align with the latest FATF 40 Recommendations.

 

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