Guidance
Published Date: 25 June 2019

Effective Practices to Detect and Mitigate the Risk from Misuse of Legal Persons

Sets out MAS’ supervisory expectations of financial institutions’ ("FIs") controls to address the misuse of legal persons risks and typologies observed.

MAS conducted a series of thematic AML/CFT inspections targeted at assessing the effectiveness of banks’ controls in mitigating risks from the misuse of legal persons. This guidance paper summarises the key findings from the inspections, and sets out MAS’ supervisory expectations of sound practices, for effective AML/CFT frameworks and controls to address misuse of legal persons risks and typologies. In addition, illustrative case examples and best practices observed from the inspections can be found within the paper, which other FIs could consider emulating. 

 

While this guidance paper is derived from MAS’ banking inspection findings, the key findings would be relevant and applicable to other FIs with the appropriate modifications. FIs should therefore study and incorporate learning points from this guidance in a risk-based and proportionate manner, giving proper regard to the profile of their business activities and customers. FIs should also note that the takeaways in this paper are non-exhaustive, and they should continue to strengthen their AML/CFT controls in detecting and mitigating shell company risks as typologies and risks evolve over time.