Financial Crime World

Anti-Money Laundering Regulations in Singapore

Key Takeaways

Singapore has implemented a robust framework to combat money laundering and terrorism financing. Here are some key takeaways related to Anti-Money Laundering (AML) regulations in Singapore:

AML Laws

The main AML laws in Singapore include:

  • Corruption, Drug Trafficking and Other Serious Crimes Act 1992 (CDSA): This act is the primary legislation governing AML in Singapore.
  • MAS Notice 626: This notice outlines the requirements for banks to implement effective AML/CFT controls.
  • MAS Notice 1014: This notice provides guidance on customer due diligence and account monitoring.
  • MAS Notice 824: This notice requires financial institutions to report suspicious transactions to the Monetary Authority of Singapore (MAS).
  • MAS Notice PSN01: This notice outlines the requirements for financial institutions to implement effective AML/CFT controls.
  • MAS Notice PSN02: This notice provides guidance on customer due diligence and account monitoring.

Anti-Money Laundering Acts

The Monetary Authority of Singapore (MAS) publishes AML guidelines for different types of entities. Violating these guidelines isn’t a criminal offense, but non-compliance can affect a company’s risk evaluation by the MAS.

Customer Due Diligence Requirements

Singapore’s financial institutions are required to conduct customer due diligence when onboarding customers. For individual customers onboarded remotely, businesses typically must verify:

  • Full name
  • Unique identification number
  • Residential address
  • Date of birth
  • Nationality

Simplified Due Diligence (SDD)

Where a company is satisfied that the risks of money laundering and terrorism financing are low, a bank may perform SDD measures. This decision should be made according to:

  • The needs and profile of the customer
  • The complexity and size of the firm
  • Local regulations as well as its internal procedures and guidelines

In such cases, companies shall document:

  • The details of its risk assessment
  • The nature of the simplified CDD measures

Penalties for AML Violations

According to The Corruption, Drug Trafficking and other Serious Crimes (Confiscation of Benefits) Act 1992 (CDSA), the following penalties apply to those convicted of money laundering activities:

  • For individuals: a fine of up to S$500,000 (approximately $375,000) or up to 10 years imprisonment.
  • For companies: a fine of up to S$1,000,000 (approximately $750,000) or double the amount of goods acquired through illegal activity, whichever is higher.

Risk Assessment

The country’s risk level has been assessed by the Financial Action Task Force (FATF). According to the latest FATF Mutual Evaluation Report, Singapore fully complies with 20 Recommendations and mostly complies with 17 recommendations (out of 40 total).