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Anti-Money Laundering Regulations in Singapore: A Comprehensive Guide
Singapore has established a robust framework to combat money laundering and terrorism financing. This guide provides an overview of key Anti-Money Laundering (AML) regulations, obligations, penalties for non-compliance, and recent updates.
Key AML Regulations
The following laws and notices are essential to understanding Singapore’s AML landscape:
- The Corruption, Drug Trafficking and other Serious Crimes (Confiscation of Benefits) Act 1992 (CDSA): This act is the primary legislation for money laundering in Singapore.
- MAS Notice 626: This notice outlines the requirements for reporting suspicious transactions to the Monetary Authority of Singapore (MAS).
- MAS Notice 1014: This notice provides guidelines on customer due diligence measures, including verifying customer identification and beneficial ownership information.
- MAS Notice 824: This notice addresses the requirements for wire transfers and value transfers.
- MAS Notice PSN01: This notice outlines the requirements for digital payment token transfer services.
- MAS Notice PSN02: This notice clarifies the definitions of “digital payment token transfer service” and “digital token transaction.”
AML Obligations
Financial institutions in Singapore must adhere to the following AML obligations:
- Perform Customer Due Diligence (CDD) measures on all customers, including joint account holders.
- Verify customer identification and beneficial ownership information.
- Conduct ongoing monitoring of customer transactions.
Penalties for Non-Compliance
Individuals convicted of money laundering activities may face a fine of up to SGD 500,000 or imprisonment for up to 10 years. Companies convicted of money laundering activities may face a fine of up to SGD 1,000,000 or double the amount of goods acquired through illegal activity.
MAS Notice 2022 Updates
The latest updates from MAS include:
- Clarification on the definitions of “digital payment token transfer service” and “digital token transaction.”
- Requirements for financial institutions to perform CDD measures on all joint account holders as if each of them were individual customers.
- Guidance on wire transfers and value transfers.
Simplified Due Diligence (SDD)
Financial institutions can perform SDD when the risks of money laundering and terrorism financing are low. Companies must document their risk assessment, the nature of the simplified CDD measures, and maintain an adequate standard.
Singapore’s AML Risk Assessment
According to the latest FATF Mutual Evaluation Report, Singapore fully complies with 20 Recommendations and mostly complies with 17 recommendations (out of 40 total). This indicates that Singapore is successfully confronting money laundering.