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Singapore To Improve AML Regime

by Mary Swire, Lowtax.net, Hong Kong
14 January, 2014

Singapore's Steering Committee – led by the Monetary Authority of Singapore, the Ministry of Home Affairs and the Ministry of Finance – has issued its inaugural national risk assessment report (NRA) on money laundering (ML) and terrorist financing (TF) risks in the country.

The NRA is an ML/TF risk audit of not only the financial sector but also designated non-financial businesses and professions, such as casinos, dealers in precious metals and stones, legal professionals and accountants, and trust and company service providers, in Singapore.

The assessment found that, while many sectors have in place a robust regime to combat ML and TF risks, and the regime is grounded in tough regulations, rigorous supervision and effective enforcement, there are still a number of areas where controls need to be strengthened, and efforts are underway to address them.

It is noted that Singapore's openness as an international transport hub and financial center exposes it to inherent cross-border ML and TF risks; the more vulnerable sectors including those that are internationally-oriented and cash-intensive. For many of those sectors, such as banks and casinos, it was found that the relevant controls are in place, especially in customer due diligence, record keeping, ongoing transaction monitoring and rigorous supervision.

However, it was also found that there are a number of sectors where controls are relatively less robust. These include remittance agents, money-changers, internet-based stored value facility holders, corporate service providers and pawnbrokers.

It was confirmed that the relevant government agencies will be strengthening the legislative and supervisory framework through the year to address the risks in these sectors more effectively.

Several other areas have also been identified for further study, including virtual currencies, precious stones and metals dealers, and the Singapore Freeport. Authorities will seek to better understand how ML and TF can be carried out through these channels, as well as review international best practices, to determine whether any safeguards and mitigating measures are needed.

The Director of the Commercial Affairs Department, Tan Boon Gin, said: "We will mitigate the risks identified in the NRA by working with the private sector and regulatory agencies to build a strong culture of suspicious transaction reporting, particularly in the areas assessed to be of higher risk."

"We will also devote the necessary resources to detect and pursue all cases of ML and TF," he added, "regardless of whether the underlying criminal activity took place domestically or overseas."

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