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Financial Institutions in Singapore Must Comply with Anti-Money Laundering Regulations

In a bid to prevent money laundering and terrorism financing, financial institutions in Singapore must adhere to strict regulations set by the Monetary Authority of Singapore (MAS). The country’s anti-money laundering (AML) laws are designed to detect and prevent suspicious transactions.

Know Your Customer (KYC) Requirements

To comply with MAS regulations, financial institutions must conduct Know Your Customer (KYC) checks on all customers. This includes:

  • Verifying individual customers’ full name
  • Unique identification number
  • Residential address
  • Date of birth
  • Nationality

Customer Due Diligence (CDD)

Financial institutions are also required to perform Customer Due Diligence (CDD) measures to ensure that they have a thorough understanding of their customers. This includes:

  • Identifying and verifying beneficial owners
  • Understanding the purpose and nature of the relationship
  • Ongoing monitoring

Simplified Due Diligence (SDD)

In certain cases, financial institutions may be allowed to perform simplified due diligence (SDD) measures if they are satisfied that the risks of money laundering and terrorism financing are low. However, this decision must be made according to the needs, profile, complexity, and size of the firm.

AML Laws in Singapore

The Corruption, Drug Trafficking, and Other Serious Crimes Act 1992 (CDSA) is a key piece of legislation that aims to combat money laundering. The Monetary Authority of Singapore (MAS) also publishes various guidelines and notices, such as:

  • MAS Notice 626: targets AML and Countering Financing of Terrorism (CFT) activities
  • MAS Notice 1014
  • MAS Notice 824
  • MAS Notice PSN01
  • MAS Notice PSN02

Consequences of Non-Compliance

Financial institutions that fail to comply with AML regulations may face penalties, including:

  • Official warnings
  • Reprimands
  • Prohibition orders
  • Removal of management from their positions
  • License termination
  • Monetary penalties (maximum S$1,000,000)

Frequently Asked Questions

What are the AML laws in Singapore?

The main AML regulations in Singapore include:

  • Corruption, Drug Trafficking, and Other Serious Crimes Act 1992 (CDSA)
  • MAS Notice 626
  • MAS Notice 1014
  • MAS Notice 824
  • MAS Notice PSN01
  • MAS Notice PSN02

What are the Anti-Money Laundering Acts in Singapore?

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

What is MAS Notice 626?

It is a guideline published by the Monetary Authority of Singapore (MAS) which applies to banks and targets Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) activities. The full text can be found here.

Conclusion

Financial institutions in Singapore must adhere to strict anti-money laundering regulations to prevent money laundering and terrorism financing. Non-compliance with these regulations can result in severe penalties, making it essential for financial institutions to stay up-to-date with the latest guidelines and notices.