Financial Crime World

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Singapore’s Financial Sector Must Comply with Tough CFT Regulatory Requirements

Singapore - The Monetary Authority of Singapore (MAS) has issued strict guidelines for financial institutions operating in the city-state to detect and deter illicit funds from flowing through its financial system.

Detecting and Deterrent Illicit Funds

According to MAS, financial institutions must implement robust controls to identify and mitigate money laundering and terrorist financing risks. To achieve this, firms are required to:

  • Conduct customer due diligence
  • Know their customers
  • Monitor and report any suspicious transactions

The guidelines emphasize the importance of assessing and mitigating risk specific to each business model. Firms are advised to consider common threats such as:

  • High-risk jurisdictions
  • Politically Exposed Persons (PEPs)
  • Unusual transaction patterns

when conducting customer due diligence.

Fintech Companies’ Additional Requirements

In particular, fintech companies must create clear customer acceptance policies and procedures that identify higher-risk customers, verify identity through reliable source documents, and maintain accurate customer profiles. Enhanced due diligence is also required for customers deemed to be at a higher risk of money laundering or terrorist financing.

The MAS has issued business model-specific notices outlining compliance requirements, which fintech companies must refer to when developing their own AML/CFT policies and procedures.

Ongoing Compliance

Regular account reviews, document retention, and employee training programs are also recommended to ensure ongoing compliance. The guidelines recommend that financial institutions stay up-to-date with new guidance papers issued by the MAS to address emerging threats.

In a statement, the MAS emphasized the importance of effective AML/CFT compliance in maintaining Singapore’s reputation as a stable and secure financial hub: “We expect all financial institutions operating in Singapore to take their AML/CFT obligations seriously and implement robust systems and processes to prevent money laundering and terrorist financing.”

Resources for Further Guidance

For further guidance on AML/CFT compliance, financial institutions can access the MAS’ business model-specific notices and periodic guidance papers on its website.