Singapore Introduces New Anti-Money Laundering and Countering Terrorism Financing Regulatory Regime for Precious Stones and Metals Dealers
The Ministry of Law (MinLaw) in Singapore has announced plans to introduce a new anti-money laundering and countering the financing of terrorism (AML/CFT) regulatory regime for precious stones and metals dealers (PSMDs) in the country. The move aims to strengthen Singapore’s efforts in combating money laundering and terrorism financing.
Strengthening AML/CFT Framework
Under the new regime, PSMDs will be required to:
- Identify, assess, and understand the money laundering and terrorism financing risks posed by their customers and transactions
- Put in place internal policies, procedures, and controls to mitigate these risks
- Register with MinLaw, which will serve as the regulatory agency
The new regime is expected to help close a gap in Singapore’s AML/CFT framework, which currently does not require PSMDs to comply with AML/CFT obligations. The sector has been identified as being vulnerable to money laundering and terrorism financing due to its ability to handle large sums of cash and the ease with which precious stones and metals can be converted into cash.
Development of Regulatory Regime
MinLaw will develop the new regulatory regime in consultation with industry stakeholders, including manufacturers, wholesalers, retailers, and industry associations. The agency will assess the risks faced by the sector and adopt a targeted, risk-based approach to address these risks while keeping regulatory costs reasonable.
The new requirements will align with recommendations issued by the Financial Action Task Force (FATF), an international standard-setting body for AML/CFT standards. MinLaw will conduct a public consultation on the proposed regulatory regime in the coming months.
Singapore’s Track Record
Singapore has a strong track record of combating money laundering and terrorism financing, with a comprehensive framework in place to prevent, supervise, enforce, confiscate the proceeds of crime, and impose targeted financial sanctions against terrorism and proliferation financing. The country also has robust supervision of the financial sector and engages regularly with industry stakeholders to foster a deep understanding of AML/CFT issues.
Addressing Gaps
However, the PSMD sector remains largely unregulated for AML/CFT purposes, despite its vulnerability to money laundering and terrorism financing. The new regulatory regime aims to address this gap and ensure that the sector is better equipped to manage these risks.
Expected Outcomes
The introduction of the new AML/CFT regulatory regime for PSMDs in Singapore is expected to contribute to the country’s efforts to combat crime and improve security, both domestically and globally. The move will help to strengthen Singapore’s position as a leading financial hub while also enhancing its international reputation for combating money laundering and terrorism financing.