ROBUST, TRUSTED, AND

PURPOSEFUL FINANCIAL CENTRE

A TRUSTED FINANCIAL CENTRE
PREVENTING MONEY LAUNDERING AND TERRORISM FINANCING

As an international financial centre and transport hub, Singapore supports global efforts to combat money laundering (ML), terrorism financing (TF) and proliferation financing. Singapore is a member of the Financial Action Task Force (FATF) and a founding member of the Asia Pacific Group on Money Laundering, and is committed to implementing a robust regulatory and supervisory regime in line with the revised FATF Standards and international best practices.

On 10 January 2014, Ministry of Home Affairs, Ministry of Finance (MOF) and MAS published Singapore's first National Risk Assessment (NRA) report on ML/TF. The NRA report was the culmination of a government-wide exercise that lasted two years and covered 14 financial sub-sectors4 and eight non-financial sectors5 in Singapore. Most of these sectors were found to have a robust regime in place to combat ML/TF. Nonetheless, there are a number of areas where controls need to be strengthened. In the financial sector, MAS is focusing on strengthening the supervisory framework for remittance agents, money-changers and internet-based stored value facility holders. Virtual currencies have also been identified as an emerging risk in the financial sector for further study and, in March 2014, MAS announced that it will be putting in place a new regime to address ML/TF risks in the area.

Financial institutions operating in Singapore are required to put in place the necessary controls to detect and deter the flow of illicit funds through Singapore's financial system. Such controls include the need to identify and know their customers (including beneficial owners), to conduct regular account reviews, and to monitor and report any suspicious transactions. Singapore is also committed to implementing the various United Nations Security Council Resolutions against countries such as Iran and North Korea. The MAS Notices and Guidelines relating to the prevention of ML/TF will be updated in the second half of 2014 following a consultation with the industry.

In 2013, MAS conducted 83 anti-money laundering and countering the financing of terrorism (AML/ CFT) inspections covering banks, insurance companies, money-changers, remittance agents, capital markets services licensees and licensed trust companies. Arising from the inspections, MAS noted several areas where there was room for improvement. Some institutions needed to put in place more robust AML/CFT controls for their trade finance and correspondent banking businesses, while others had to strengthen customer due diligence measures for higher risk clients, clear backlog of suspicious transaction alerts in a more timely manner, as well as enhance transaction monitoring reports in line with changing business and/or customer profiles. MAS had required the affected institutions to promptly address all deficiencies and take steps to strengthen their controls and risk management framework

MAS continues to take a serious view of breaches of AML/CFT regulations and failure by FIs to institute a robust AML/CFT control framework. Sanctions are imposed on institutions for regulatory contraventions and deficiencies in AML/ CFT measures. These include formal warnings, reprimands, restrictions on operations, financial penalties and revocation of licences. In 2013, MAS issued a total of nine warnings and reprimands to financial institutions, restricted the operations of or imposed special conditions on six institutions, and revoked or did not renew the licences of two money-changers/remittance agents. In the past year, MAS has also imposed financial penalties on five institutions, ranging from approximately S$12,000 to S$450,000.

4 The 14 financial sub-sectors are: (i) full banks and qualifying full banks, (ii) wholesale banks, offshore banks and merchant banks, (iii) finance companies, (iv) money-changers, (v) remittance agents, (vi) direct life and composite insurers, (vii) other insurers, (viii) insurance brokers, (ix) fund management companies (x) trust companies, (xi) broker-dealers, (xii) corporate finance advisory firms, (xiii) financial advisory firms, and (xiv) stored value facility holders.

5 The eight non-financial sectors covered are: (i) casinos, (ii) pawnbrokers, (iii) moneylenders, (iv) corporate service providers, (v) real estate sector, (vi) lawyers, (vii) public accountants and other professional accountants, and (viii) non-profit organisations