Financial Crime World

Singapore’s Robust Anti-Money Laundering Framework: A Shield Against Financial Crimes in The World’s Second Best Business Hub

Singapore, known for its thriving economy and business-friendly environment, is the second-best place for international businesses according to the World Bank’s Ease of Doing Business Index. Attracting both legitimate businesses and financial criminals, Singapore’s open economy requires a robust anti-money laundering (AML) regulatory framework. This article, prepared by Sumsub, aims to help companies understand how to stay compliant with Singapore’s AML regulations.

Singapore’s Commitment to Combating Money Laundering and Terrorism Financing

Since 2016, Singapore has taken decisive steps to strengthen its AML framework:

  1. Enhanced regulatory framework
  2. Effective implementation by companies
  3. International recognition for efforts

The financial action task force (FATF) commended Singapore’s continuous development of its AML regulatory framework and effective implementation by companies.

Which Businesses are Subject to AML Regulations?

Singapore’s AML regulations apply to:

  1. Financial institutions
  2. Designated non-financial businesses and professions (DNFBPs)

Financial Institutions

  • Banks
  • Casinos
  • Exchange companies
  • Brokers
  • Financial advisers
  • Real estate agents
  • Dealers of precious metals
  • Payment service providers

Designated Non-Financial Businesses and Professions (DNFBPs)

  • Lawyers
  • Corporate service providers
  • Public accountants
  • Casinos
  • Pawnbrokers
  • Outsourcing services

What Types of Transactions are Regulated?

The following transactions fall under AML regulations:

  • Money transfers (domestic and international)
  • E-money issuance
  • Account issuance
  • Money exchange
  • Virtual assets

Who are the Regulators?

  1. Monetary Authority of Singapore (MAS)
  2. Casino Regulatory Authority of Singapore
  3. Council for Estate Agencies

What are the Regulations?

Primary AML Regulation

  • Corruption, Drug Trafficking, and Other Serious Crimes Act 1992 (CDSA)

Additional Important Regulations

  • MAS Notices 626, 1014, 824, and PSN01 and PSN02
  • Singapore Payment Services Act (PSA)

Payment Service Providers

  • Licensing and regulation for various types of services

How to Stay Compliant

For Financial Institutions and DNFBPs

  1. Establishing internal policies and procedures based on a risk-based approach
  2. Communicating policies to employees
  3. Adequate training for staff
  4. Conducting business risk assessments
  5. Appointing a compliance officer
  6. Reporting suspicious transactions to regulatory authorities

Best Practices for Staying Compliant

  • Enabling the MAS to access and inspect methods used by outsourced service providers
  • Testing and modifying transaction monitoring rules
  • Investigating customers’ transaction history and other relevant notifications
  • Handling value transfers carefully
  • Performing Customer Due Diligence (CDD) procedures

Performing Customer Due Diligence (CDD)

Regulated Entities

  • Collecting required information from individuals/natural persons and conducting background checks
  • Checking customers for presence on sanctions lists, politically exposed persons (PEPs), and adverse media
  • Ongoing monitoring
  • Conducting background checks on directors and shareholders up to the Ultimate Beneficial Owner (UBO)
  • Inquiring about the relevant regulatory body
  • Collecting the necessary information about legal persons