ROBUST, TRUSTED, DYNAMIC AND
PURPOSEFUL FINANCIAL CENTRE
- A TRUSTED FINANCIAL CENTRE
- Preventing Money Laundering and Terrorism Financing
- Closure of BSI Bank Limited
- Enhancing Exchange of Tax Information Framework
- Box 1: Dedicated Departments to Combat Money Laundering and Strengthen Enforcement
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.
In April 2015, MAS issued a revised set of Notices and Guidelines to financial institutions on anti-money laundering and countering the financing of terrorism (AML/CFT). These enhancements reflect MAS' prevailing supervisory expectations and are benchmarked to global best practices and standards.
In June 2015, the MAS Act was amended to enhance the effectiveness of Singapore's AML/CFT regime, particularly in relation to international cooperation. The amendments are aligned with the standards set by FATF and the Core Principles for Effective Banking Supervision issued by the Basel Committee on Banking Supervision.
In October 2015, MAS issued the "Guidance on AML/CFT Controls in Trade Finance and Correspondent Banking" to help financial institutions improve their risk management practices in these areas.
MAS has dedicated significant resources towards AML/CFT supervision and enforcement. In 2015, MAS conducted 54 AML/CFT inspections covering banks, insurance companies, money-changers, remittance agents, capital markets services licensees, licensed trust companies, stored value facility holders and non-bank credit card issuers. MAS also engaged external auditors to conduct AML/CFT inspections on 100 money-changers and remittance agents.
From these inspections, we found that AML/CFT controls were generally in place for most financial institutions. There was also greater industry awareness of money laundering, terrorism financing and proliferation financing risks in trade finance and correspondent banking, and controls in these areas had been enhanced. Financial institutions had also incorporated "high tax risk" indicators in their customer due diligence policies, procedures and controls.
However, there were several areas for improvement. MAS has asked financial institutions to continue to strengthen their transaction monitoring systems to ensure that they are able to detect unusual and suspicious trends, patterns and activities over time. These systems should also be enhanced to monitor activities in multiple accounts belonging to the same beneficial owner. Where there is suspicion of money laundering or terrorism financing, suspicious transaction reports should be filed promptly.
In addition, a few financial institutions did not conduct customer due diligence measures commensurate with the risks presented by higher risk businesses or customers. Some financial institutions, particularly money-changers and remittance agents, were required to strengthen their customer due diligence processes, including the documentation of the due diligence done. MAS had required the relevant financial institutions to promptly address all deficiencies noted and take steps to strengthen their controls and risk management framework.
MAS takes a serious view of breaches of AML/CFT regulations and failure by financial institutions to institute a robust AML/CFT control framework. Sanctions are imposed on financial 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 2015, MAS issued 19 warnings and reprimands to financial institutions. MAS also imposed financial penalties on 16 financial institutions with amounts up to S$800,000.