Anti-Money Laundering Laws and Regulations in Singapore
Singapore has implemented various laws and regulations to combat money laundering and terrorist financing. This article provides an overview of the key Anti-Money Laundering (AML) regulations, guidelines, and penalties in Singapore.
Main AML Regulations in Singapore
The following are the main AML regulations in Singapore:
- Corruption, Drug Trafficking, and Other Serious Crimes Act 1992 (CDSA): This act makes it an offense to engage in various serious crimes, including money laundering.
- MAS Notice 626: This notice outlines the requirements for financial institutions to conduct customer due diligence on their customers.
- MAS Notice 1014: This notice sets out the guidelines for the use of technology to combat money laundering and terrorist financing.
- MAS Notice 824: This notice provides guidance on the implementation of AML/CFT measures by financial institutions.
- MAS Notice PSN01: This notice outlines the requirements for the reporting of suspicious transactions by financial institutions.
- MAS Notice PSN02: This notice sets out the guidelines for the assessment and management of money laundering risks.
AML Guidelines for Different Entities
The Monetary Authority of Singapore (MAS) has published various AML guidelines for different types of entities, including:
- Banks: Banks are required to conduct customer due diligence on their customers and report suspicious transactions.
- FinTech companies: FinTech companies are subject to the same AML/CFT requirements as banks.
- Digital payment token service providers: Digital payment token service providers are required to conduct customer due diligence on their customers and report suspicious transactions.
Definition of “Digital Token” and “Digital Token Transaction”
According to MAS Notice 2022, a digital token is defined as:
A digital representation of value that can be used for payment or investment purposes, and is issued or guaranteed by an entity other than the issuer of the Singapore dollar.
A digital token transaction refers to any transaction involving a digital token.
Customer Due Diligence (CDD) Requirements
Financial institutions are required to conduct CDD measures on all joint account holders, as if each of them were individual customers. This includes:
- Verifying the identity of each joint account holder
- Obtaining information about the source of funds and intended use of the account
- Conducting ongoing monitoring of transactions
Penalties for Money Laundering Activities
The penalties for money laundering activities in Singapore include:
- For individuals: a fine of up to S$500,000 or up to 10 years imprisonment
- For companies: a fine of up to S$1,000,000 or double the amount of goods acquired through illegal activity
Penalties for Financial Institutions Failing to Meet AML Obligations
The penalties for financial institutions failing to meet AML obligations include:
- Official warnings
- Reprimands
- Prohibition orders
- Removal of management from their positions
- License termination
- Monetary penalties
The maximum monetary penalty for financial institutions failing to meet AML obligations cannot exceed S$1,000,000.
Frequently Asked Questions (FAQs)
Q: What are the main AML regulations in Singapore?
A: The main AML regulations in Singapore include the Corruption, Drug Trafficking, and Other Serious Crimes Act 1992 (CDSA), MAS Notice 626, MAS Notice 1014, MAS Notice 824, MAS Notice PSN01, and MAS Notice PSN02.
Q: What are the Anti-Money Laundering Acts in Singapore?
A: The Anti-Money Laundering Acts in Singapore include the Corruption, Drug Trafficking, and Other Serious Crimes Act 1992 (CDSA), MAS Notice 626, MAS Notice 1014, MAS Notice 824, MAS Notice PSN01, and MAS Notice PSN02.
Q: What is MAS Notice 626?
A: MAS Notice 626 outlines the requirements for financial institutions to conduct customer due diligence on their customers.
Q: What are the KYC requirements from the MAS?
A: The MAS requires financial institutions to verify the identity of their customers and obtain information about the source of funds and intended use of the account.
Q: What is simplified due diligence (SDD) in Singapore?
A: Simplified due diligence (SDD) refers to a reduced level of customer due diligence that can be used for low-risk customers or transactions.
Q: Is Singapore a high-risk country for AML?
A: No, Singapore is considered a low-to-medium risk country for AML.