Singapore’s International Hub Status Exposes Businesses to Money-Laundering and Terrorism Financing Risks: Experts Weigh In on Regulatory Requirements
=============================================
Singapore, known for its international transport hub and financial centre status, is vulnerable to money-laundering and terrorism financing schemes due to its open nature. Despite having a strict legislative framework in place to combat these risks, businesses with international orientations and high cash volumes remain at risk.
Most Susceptible Entities
According to experts from Pinsent Masons MPillay, the following entities are most susceptible to money-laundering and terrorism financing:
- Retail and private banks
- Remittance agents
- Money-changers
- Internet-based stored value facility holders
- Corporate service providers
- Casinos
- Pawnbrokers
Legislative Framework
The analysis highlights the key laws that govern anti-money laundering (AML) and combating the financing of terrorism (CFT) in Singapore:
Corruption, Drug Trafficking and Other Serious Crimes and Security Act (CDSA)
Key Offences
- Failure to report suspicious transactions
- Providing or accepting property derived from criminal conduct
Terrorism (Suppression of Financing) Act (TSFA)
Key Offences
- Providing or collecting funds for terrorist purposes
- Concealing or disguising the origin, location, or movement of funds for terrorist purposes
Risk-Based Approach to Know-Your-Customer (KYC) and Customer Due Diligence (CDD)
The analysis emphasizes the importance of adopting a risk-based approach to performing KYC/CDD measures. This involves:
- Identifying and assessing the risks associated with each customer or transaction
- Implementing proportionate measures to mitigate those risks
Regulatory Requirements
Singapore’s regulatory requirements are designed to ensure that businesses operating in the country take a proactive role in detecting and preventing money-laundering and terrorism financing activities. The analysis serves as a valuable resource for businesses looking to navigate these complex regulations and maintain compliance with CFT requirements.
By understanding the legislative framework, key offences, and risk-based approach to KYC/CDD measures, businesses can reduce their exposure to money-laundering and terrorism financing risks and maintain a strong reputation in Singapore’s international hub.