Date: For Parliament Sitting on 10 January 2024

Name and Constituency of Members of Parliament

Mr Gerald Giam Yean Song, MP, Aljunied GRC
Mr Chua Kheng Wee Louis, MP, Sengkang GRC

Questions:

Mr Gerald Giam Yean Song: To ask the Prime Minister (a) how many complaints has MAS received in the past year about MAS-licensed remittance companies not fulfilling their commitments to remit funds; (b) whether such remittance companies have a legal responsibility to ensure that funds reach their intended recipients and, if not, why not; and (c) what recourse do consumers have if the funds they placed with remittance companies are not remitted through no fault of their own.

Mr Chua Kheng Wee Louis: To ask the Prime Minister (a) whether remittance companies in Singapore that handled the failed transfers of monies to China have an obligation to ensure funds placed through them reach their intended destinations; and (b) whether an update can be provided on the cooperation with its counterpart agency in People’s Republic of China to resolve the issue of frozen or confiscated remittances.

Answer by Mr Alvin Tan, Minister of State, Ministry of Trade and Industry and Ministry of Culture, Community and Youth, and Board member of MAS, on behalf of Mr Lawrence Wong, Deputy Prime Minister and Minister for Finance, and Chairman of MAS:

1. Mr Speaker, my response will cover the questions raised by Mr Gerald Giam and Mr Louis Chua in today’s Order Paper.

2. Under the Payment Services Act 2019 (PS Act), licensed payment service providers (licensees) must ensure that any money accepted for money transfer services is deposited in the designated recipient’s accounts within three to seven business days. Licensees must also provide proper documentary evidence to show that the recipient has received the money transmitted.

3. Licensees that fail to comply with the three to seven business days money transmission timeframe, unless agreed with their customers, would be in breach of MAS’ requirements. MAS will undertake a supervisory review and/or take enforcement action for such breaches, including reviewing the licensee’s suitability to hold a licence under the PS Act. The number of complaints directly received by MAS in 2023 on alleged failed remittances is lower than 100 and amounts to less than 0.01% of total value remitted from Singapore.

4. Affected remitters should first approach the remittance company concerned for resolution, if their intended recipients did not receive the money. If the matter cannot be resolved, affected remitters may file a claim in the Small Claims Tribunals for amounts up to S$30,000 or consider seeking legal advice on civil action to be taken against the remittance company.

5. In providing the money transfer services, licensees commonly pass the funds to intermediary institutions, based in Singapore or overseas, for the onward transmission of the funds to the beneficiaries. These intermediaries include banks, operators of card payment systems, or third-party agents. Under MAS’ requirements against money laundering and terrorism financing, licensees must conduct due diligence on the intermediary institutions they directly work with. If the licensee fails to perform the necessary due diligence, it will face regulatory or enforcement action by MAS.

6. For the recent disputes regarding remittances to China, the issues were not about failed remittance. For these cases, the funds had been successfully remitted and deposited into the recipients’ bank accounts. But these funds were frozen or forfeited by the PRC law enforcement agencies.

7. As of 15 December 2023, SPF has received more than 670 reports of funds remitted to China being frozen. MAS and SPF are seeking information from Chinese authorities to establish the reasons and concerns that led to the freezing of recipient bank accounts in China.

8. To minimise risks to consumers remitting funds to China, MAS has decided to temporarily suspend the use of non-bank and non-card channels by licensees for money transfers to China. While consumers may now have to pay more to remit funds to China, this suspension will protect consumers from the uncertainty of funds being frozen by the authorities in China.

9. Relevant Government agencies have also been engaging the PRC government, so that the latter can provide information to help affected remitters understand how they can get their accounts and monies in China unfrozen by the PRC law enforcement agencies. MAS has also told the licensees to render the necessary assistance to the affected consumers, strengthen their complaints handling process and review their existing arrangements with partners and intermediaries for remittances to China, in view of these complaints and the impact to their customers. MAS and SPF will continue to engage the relevant Chinese authorities and the Singapore licensees, and render assistance to the affected remitters.

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