with evolving international Anti-Money Laundering/Countering
Financing of Terrorism (AML/CFT) standards, MAS has
been reviewing its AML/CFT regulations for the financial
sector. Revisions to the regime will include: expansion
of measures to cover both money laundering and terrorist
financing risks in a single regulation, a more comprehensive
set of customer due diligence measures, and introduction
of an element of risk sensitivity in performing customer
During the year, MAS remained vigilant in its
AML/CFT efforts. We continued to inspect and
review internal and external audit reports on
the adequacy of banks’ AML/CFT measures,
and their compliance with MAS’ regulations.
In line with our risk-based supervision, the
inspections were either targeted or part of regular
inspections of the financial institutions. Since
January 2005, 43 banks and merchant banks have
been inspected on the adequacy of their AML/CFT
The banks and merchant banks inspected were
generally in compliance with MAS’ Notice
on Prevention of Money Laundering and Anti-Terrorism
(Measures) Regulations. However, a number of
them had room for improvement in one or more
of the following areas: updating of policies
and procedures, staff training, customer due
diligence measures, comprehensiveness of screening
of customers’ identity and remittances,
and transaction monitoring processes and systems.
MAS is following up with the institutions concerned
to ensure that they institute the necessary improvements
expeditiously and satisfactorily.
During the year, MAS also inspected 12 money
changing and remittance licensees for their compliance
with relevant laws and regulations, including
the adequacy of their AML/CFT systems and procedures.
MAS has extended the AML/CFT regulations, which
already cover licensees’ outward remittance
business, to include their inward remittance
operations. The AML/CFT regulations require licensees
to conduct customer due diligence, screen customers
against updated terrorist lists, and comply with
the requirements for maintenance of proper records
and reporting of suspicious transactions.
MAS also assesses the life insurers’ compliance
with MAS’ AML/CFT regulations in the course
of our inspections of these insurers.
The life insurers inspected to date were generally
in compliance with MAS’ Notice 314 on the
Prevention of Money Laundering and Anti-Terrorism
(Measures) Regulations. While these life insurers’ AML/CFT
measures were adequate relative to their size
and risk profile, they need to continue to enhance
their systems in order to ensure robust ongoing
monitoring of customer transactions.
MAS continues to emphasise to all financial
institutions the need to have in place robust
AML/CFT policies, procedures and controls, and
to regularly review and enhance them.