Singapore Businesses Must Comply with Stricter AML/CTF Regulatory Requirements

In an effort to combat money laundering and terrorist financing, Singapore has strengthened its anti-money laundering and counter-terrorism financing (AML/CTF) regulations, imposing stricter requirements on financial institutions and other regulated businesses operating in the country.

Conducting Customer Due Diligence (CDD)

One of the key measures is conducting customer due diligence (CDD), which involves evaluating customers’ or clients’ identities, sources of wealth, and nature of their businesses to identify and verify their ultimate beneficial owners. This risk-based approach aims to determine the level of CDD needed for each customer.

Monitoring Transactions and Reporting Suspicious Activities

Financial institutions and regulated businesses are also required to monitor transactions closely, reporting any suspicious activities to Singapore’s financial intelligence unit, the Suspicious Transaction Reporting Office (STRO). Failure to do so can result in penalties of up to SGD 500,000 for companies, as well as imprisonment of up to three years.

• Large cash transactions exceeding SGD 10,000 must also be reported as a Cash Transaction Report to the STRO.
• Businesses must maintain customer due diligence and transaction data and information for at least five years.

Penalties for Non-Compliance

Failure to comply with anti-money laundering provisions under the Criminal Justice (Money-Laundering) Act can result in:

• Fines of up to SGD 1,000,000
• Other sanctions such as suspension or revocation of business licenses
• Removal of directors
• Banning of sanctioned persons from engaging in regulated activities

Conclusion

The new regulations aim to enhance Singapore’s AML/CTF regime, strengthening its position as a major financial hub in the region. Businesses operating in Singapore must ensure they are compliant with these stricter requirements to avoid severe penalties and maintain their good reputation.