MAS Consults on Measures to Strengthen Regulations Against Money Laundering and Terrorist Financing
Singapore, 15 July 2014...The Monetary Authority of Singapore (MAS) today released a consultation paper on proposed amendments to its notices to financial institutions (FIs) on anti-money laundering and countering the financing of terrorism (AML/CFT). The proposed amendments draw reference from international best practices and the latest recommendations of the Financial Action Task Force (FATF), the global standard-setter for measures to combat money laundering (ML), terrorist financing (TF), and the financing of proliferation. Many of the proposed changes formalise existing supervisory expectations and practices of FIs.
2 MAS regularly updates its AML/CFT regulatory framework to ensure that the supervision of FIs takes into account the latest ML/TF developments. The scope of the amendments will be comprehensive across the financial sector, covering banks, merchant banks, finance companies, money-changers and remittance licence holders, life insurers, capital markets intermediaries, financial advisers, approved trustees, trust companies, stored value facility holders, and non-bank credit and charge card licensees.
3 Key proposed amendments will:
a) require FIs to perform an ML/TF risk assessment at the wider institutional level, in addition to assessing the ML/TF risk of individual customers;
b) elaborate on steps to be taken by FIs to identify and verify beneficial ownership of non-individual customers, such as companies and trusts;
c) formalise the need for FIs to screen customers and their connected parties;
d) cater for a risk-based approach for certain categories of Politically Exposed Persons1; and
e) put in place additional requirements for cross-border wire transfers exceeding S$1,500, such as customer due diligence on occasional transactions and minimum information fields in the message or payment instructions.
Taken together, the new measures will further safeguard Singapore’s financial system from being used to launder money or finance terrorism.
4 Mr Ong Chong Tee, Deputy Managing Director, MAS, said, “Singapore is fully committed to keeping our financial centre clean and supporting global efforts to combat financial crime. In an evaluation exercise conducted by the FATF in 2008, Singapore was assessed to have a rigorous AML/CFT regime. We will undergo another evaluation by the FATF in 2015 and aim to do as well.”
5 The consultation paper is available on MAS’ website and comments should reach MAS by 14 August 2014. Interested parties may email their comments for the respective MAS AML/CFT Notices to the email addresses listed in the consultation paper.
Note to editor on FATF and the FATF Recommendations
Singapore has been a member of the 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 for more details on the Guidance document.1 “Politically Exposed Person” refers to a person entrusted with prominent public functions.