Financial Crime World

Anti-Money Laundering Requirements: A Cross-Industry Overview

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Singapore’s financial regulatory body, the Monetary Authority of Singapore (MAS), has implemented anti-money laundering (AML) requirements for various sectors to prevent money laundering and terrorist financing. The scope of these requirements extends to Financial Institutions (FIs), Designated Businesses, and specific industries.

Common AML Requirements Across Sectors

While the types of payments or money transmission activities subject to AML requirements vary across sectors, FIs and Designated Businesses are required to implement similar procedures:

  • Risk Assessment and Risk Mitigation: Identify and assess potential risks in their business operations.
  • Customer Due Diligence (CDD): Verify the identity of customers and understand their business activities.
  • Recordkeeping: Maintain accurate records of financial transactions for a specified period.
  • Suspicious Transaction Reporting: Report suspicious transactions to the relevant authorities.
  • Other Internal Policies, Procedures, and Controls: Implement internal controls and policies to prevent money laundering and terrorist financing.

AML Requirements for Providers of Payment Services (PSPs)

Providers of payment services, including account issuance services, domestic money transfer services, cross-border money transfer services, and others, are obliged to:

  • Register and Apply for a PSP Licence: Under the Payment Services Act 2019.
  • Meet AML/CFT Requirements: Under MAS Notice PSN01 Prevention of Money Laundering and Countering the Financing of Terrorism.

Cryptocurrency Industry: AML Requirements

Cryptocurrency companies, or Digital Payment Token (DPT) service providers, are required to:

  • Register and Apply for a PSP Licence: Under the Payment Services Act 2019.
  • Meet AML/CFT Requirements: Under MAS Notice PSN02 Prevention of Money Laundering and Countering the Financing of Terrorism – Digital Payment Token Service.

Non-Fungible Tokens (NFTs)

While NFTs are not specifically regulated under Singapore law, existing AML requirements may apply depending on their underlying characteristics. If NFTs have the characteristics of capital markets products or DPTs, they may be subject to regulation by MAS.

Compliance Programmes

FIs and Designated Businesses are required to maintain compliance programmes that reflect the nature and risk profiles of their business. These programmes typically include measures for CDD, reporting, recordkeeping, and internal policies, procedures, and controls.

Recordkeeping and Reporting Large Currency Transactions

Requirements for recordkeeping vary across industry sectors. For example:

  • FIs: Must retain records of financial transactions for a minimum of five years.
  • PSM Dealers: Must maintain records of cash transactions exceeding S$20,000 for a period of five years.

Reports must be filed at specific thresholds and deadlines.

Conclusion

MAS has implemented AML requirements to prevent money laundering and terrorist financing across various sectors in Singapore. Understanding these requirements is crucial for businesses operating in the country, particularly those involved in payment services, cryptocurrency, or other high-risk activities. Compliance with AML regulations is essential to maintain a secure and trustworthy financial system.