ROBUST, TRUSTED, AND

PURPOSEFUL FINANCIAL CENTRE

A TRUSTED FINANCIAL CENTRE
PREVENTING MONEY LAUNDERING AND TERRORISM FINANCING

Singapore is committed to the global effort to combat transnational crime. Singapore is a member of the Financial Action Task Force (FATF) and a founding member of the Asia/Pacific Group on Money Laundering.

Singapore adopts a Whole-of-Government approach to combating money laundering (ML) and terrorism financing (TF). This is led by the AML/CFT Steering Committee, comprising the Permanent Secretary of the Ministry of Home Affairs, Permanent Secretary of the Ministry of Finance and Managing Director of MAS. Singapore's AML/CFT policy objectives are to: i) detect, deter and prevent ML, associated predicate offences and TF; and ii) protect the integrity of its financial system from illegal activities and illicit fund flows.

In line with our AML/CFT policy objectives, MAS issued revised Notices to financial institutions on the prevention of money laundering and terrorism financing (AML/CFT Notices) on 24 April 2015. The revisions are benchmarked against international best practices and the latest international standards set by the FATF. Many of the proposed changes formalise existing supervisory expectations and practices of financial institutions. Key changes to the AML/ CFT Notices include:

  • New enterprise-wide ML/TF risk assessment requirements;
  • Enhanced requirements to identify and verify beneficial ownership of customers;
  • New category of Politically Exposed Persons relating to international organisations; and
  • Additional requirements for cross-border wire transfers exceeding S$1,500.

Industry feedback was sought and incorporated into the revised AML/CFT Notices. MAS also updated the Guidelines to the AML/CFT Notices to elaborate on our supervisory expectations. MAS requires financial institutions to implement rigorous AML/CFT controls and measures to detect and deter illegal activities and illicit fund flows. The latest revisions to the AML/CFT Notices underlines MAS' continued vigilance to stem such risks.

MAS has been dedicating significant resources towards AML/CFT supervision and enforcement. In the last year, MAS conducted 74 AML/ CFT inspections covering banks, insurance companies, money-changers, remittance agents, capital markets intermediaries and licensed trust companies. MAS also engaged external auditors to inspect 297 capital markets intermediaries and plans to do likewise for money-changers and remittance agents, which were identified as higher risk sectors in the National Risk Assessment published in January 2014.

While AML/CFT controls were generally in place in financial institutions, MAS identified several areas where there was room for improvement. MAS noted instances where financial institutions had updated their internal policies to address changes in regulation or risk environment, but these were not implemented in an adequate or timely manner by business units, particularly with regard to applying enhanced measures to identify customers presenting higher ML/ TF risk. Certain financial institutions did not periodically review the parameters and thresholds used to detect suspicious transactions. Others needed to strengthen their internal controls to ensure that alerts raised by their screening and transaction monitoring systems were assessed in a rigorous manner, and closed with supporting documentation. MAS had required the financial institutions to promptly address all deficiencies and take steps to strengthen their controls and risk management framework.

MAS conducted industry briefings and published two guidance papers, "Guidance on Private Banking Controls" and the "Direct Life Insurers: Guidance on AML/CFT Controls", to help financial institutions better identify gaps and further strengthen their controls and risk management.

MAS takes a serious view of non-compliance with its AML/CFT requirements and failure by financial institutions to institute a robust AML/CFT controls and risk management framework. Sanctions are imposed on institutions for regulatory contraventions and deficiencies in their AML/ CFT measures. These include formal warnings, reprimands, restrictions on operations, financial penalties and revocation of licences. In 2014, MAS issued nine warnings and reprimands to financial institutions. MAS also imposed financial penalties on six financial institutions ranging from S$1,000 to S$700,000.