FATF Guidance on Private Sector Information Sharing and Revised INR.18
The Financial Action Task Force (FATF), the international standards setter for anti-money laundering and counter-financing of terrorism (AML/CFT), has published a Guidance on Private Sector Information Sharing (“the Guidance”). FATF has also made revisions to its Interpretative Note to Recommendation 18 (INR.18) which relates to financial groups’ internal controls, and their foreign branches and subsidiaries. These developments underpin the importance of effective information sharing, as one of the cornerstones of a well-functioning AML/CFT framework.
The Guidance clarifies the FATF’s Standards on information sharing: a) on a group-wide basis; and b) between financial institutions not belonging to the same financial group. It highlights some legal constraints (e.g. requirements arising from differing data protection and privacy regimes) and operational challenges (e.g. restriction on outsourcing arrangements) that could hinder such information sharing and recommends ways to address them. It also provides an update on international developments on information sharing and country examples to facilitate information sharing within the group and between financial institutions not part of the same group, beyond that envisioned under the FATF Standards.
The revisions to INR.18 clarify the requirements on the sharing of information relating to unusual or suspicious transactions within the financial group. Amendments have also been made to Recommendation 21, to clarify that tipping off provisions are not intended to inhibit information sharing as required under Recommendation 18.
Singapore recognises that information sharing is critical to effectively combat ML/TF risks. Singapore’s AML/CFT regime is facilitative of information sharing practices as recommended by the FATF Standards, including the latest revisions to INR.18 and as clarified in the latest Guidance.
Financial institutions in Singapore can already share relevant information with branches and subsidiaries of the same financial group, for risk management purposes, subject to appropriate safeguards. Such sharing may include information contained within a Suspicious Transaction Report (STR), the fact that an STR has been filed, and the STR itself.
MAS encourages sharing of relevant information within the financial group for risk management purposes as a holistic view of a client relationship better enables the financial institution to strengthen its ML/TF risk assessment and controls. Furthermore, the AML/CFT Industry Partnership (ACIP) formed in April 2017 aims to enhance information sharing between public and private sector to strengthen system-wide risk detection and mitigation.
Financial institutions should refer to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, as well as other relevant acts such as the Banking Act and Trust Companies Act for more information on the specific provisions and conditions regarding such information sharing.