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Strengthening Anti-Money Laundering and Counter-Terrorism Financing Regime in Singapore

In an effort to enhance its efforts against money laundering and terrorism financing, the Monetary Authority of Singapore (MAS) has introduced new regulations that require financial institutions to conduct customer due diligence (CDD) measures on their customers.

New Regulations for Financial Institutions

Under the new regime, banks and licensees must identify both the company and its directors by obtaining relevant corporate records such as certificates of incorporation. For partnerships or limited liability partnerships, they must identify the partners. Additionally, financial institutions must take steps to identify persons having control over the customer.

The CDD measures require financial institutions to:

  • Verify the identity of customers and beneficial owners
  • Obtain specimen signatures for authorized persons
  • Conduct enhanced due diligence on high-risk customers such as:
    • Politically Exposed Persons (PEPs)
    • Their immediate family members
    • Close associates

Definition of PEPs

PEPs are defined as natural persons who have held or hold prominent public functions in Singapore or a foreign country. The MAS allows licensees to refer to databases of PEPs compiled commercially or by official authorities.

Internal Policies and Procedures

The new regulations also require financial institutions to:

  • Have internal policies and procedures in place to determine if a customer or beneficial owner is a PEP
  • Obtain approval from senior management to establish or continue business dealings with the customer
  • Conduct enhanced monitoring of transactions throughout the business relationship

Exemptions

Exemptions to the CDD measures are available for certain customers such as those who are already subject to AML/CTF requirements consistent with the Financial Action Task Force (FATF) standards. However, licensees must still conduct due diligence if they have doubts about the veracity of the customer information or suspect that the customer may be connected with money laundering or terrorism financing.

Digital Payment Token Service Providers

The MAS has also issued a notice requiring digital payment token service providers to comply with AML/CTF requirements set out in notices, including CDD measures. This includes virtual currency dealing or exchange services.

KEY POINTS:

  • Financial institutions must conduct CDD measures on customers
  • Identify both the company and its directors for companies
  • Identify partners for partnerships or limited liability partnerships
  • Conduct enhanced due diligence on high-risk customers such as PEPs
  • Have internal policies and procedures to determine if a customer or beneficial owner is a PEP
  • Obtain approval from senior management to establish or continue business dealings with the customer
  • Conduct enhanced monitoring of transactions throughout the business relationship

EFFECTIVE DATE: The new regulations came into effect on [insert date].

CONTACT: For more information, please contact the Monetary Authority of Singapore at [insert contact details].