What is Anti-Money Laundering (AML) in Singapore.pptx

Malaysia's robust AML framework mandates compliance with regulations overseen by various authorities based on industry.

1. The open economy and well-structured tax environment of Singapore contribute to its reputation as a business center. Nevertheless, the open economy can pose a risk of emerging financial crimes like money laundering or terrorist financing. For this reason, adhering to anti-money laundering regulations in Singapore is mandatory.  Since 2016, Singapore has strengthened AML regulations and measures by understanding the evolving landscape of financial crime. The nation has earned recognition from international bodies such as the Financial Action Task Force (FATF) for its commitment and dedication to combating emerging money laundering risks.  However , to stay compliant with Singapore’s AML requirements, businesses within the country must adhere to varied AML regulations. Does that sound confusing? We will guide you through the definition of AML, the AML compliance process, accurate regulations, and other insights to help your business combat financial risks.

2. What is Anti-Money Laundering (AML) in Singapore ? Money laundering refers to a comprehensive procedure, policies, and specific regulations mandated for Singaporean businesses to mitigate ML activities.  AML programs require financial institutions and other organizations to identify, monitor, and report suspicious transactions at the right time. It is also important for businesses to implement specific measures and policies to prevent money laundering in Singapore.  Additionally, AML requirements include implementing a risk-based approach that includes procedures such as customer due diligence, real-time transaction monitoring, suspicious activity reports, and AML risk assessments. Organizations in Singapore can protect overall financial infrastructure effectively by adhering to diverse AML regulations.

3. Who is Affected by Money Laundering in Singapore? Anti money laundering in Singapore regulations are mandated for financial institutions and other entities or individuals to foster secured financial practices in the country. Casinos Brokers Exchange Companies Real-estate Agents Financial Advisers Precise Metals Dealers Payment Service Advisers And More

4. Additionally, Money laundering in Singapore mandates AML compliance for a few transactions like: E-money issuance Money Exchange Virtual Assets Money Transfers Account Issuance

5. Who Are the AML Regulators in Singapore? For total compliance, various AML regulators in Singapore supervise various industries. The main AML regulator for financial institutions is the Monetary Authority of Singapore (MAS). Additionally, the Council for Estate Agents oversees real estate agencies in Singapore for potential money laundering, and the Accounting and Corporate Regulatory Authority (ACRA) focuses on regulating accountants and corporate service providers . Additionally , the Casino Industry is the focus of the Casino Regulatory Authority. Recall that each regulator has unique guidelines or anti-money laundering laws that apply to a certain sector. For your benefit, let's examine various regulators in more detail . The Money Authority of Singapore (MAS): oversees several AML initiatives in its capacity as both a central bank and a financial regulatory body. It places a high priority on enforcing rules and regulations, notifying financial institutions, and assisting companies with the implementation of anti-money laundering (AML) procedures such transaction monitoring and reporting and due diligence. In addition, if the institutions don't follow AML regulations, MAS performs strict inspections and revokes their licenses.

6. The Commercial Affairs Department (CAD ): of the Singapore Police Force is primarily responsible for looking into and prosecuting cases involving money laundering. Money laundering operations in Singapore are identified and stopped by CAD in cooperation with MAS and other law enforcement organizations. Particular units concentrate on gathering pertinent information, filing lawsuits, and bringing charges against people or organizations engaged in money laundering. Involvement of Government: Singapore’s government imposes extensive laws like Corruption, Drug Trafficking, and other Serious Crimes Act (CDSA) and Terrorisim Suppression of Financing Act (TSOFA) – criminalizing money laundering and terrorist financing attempts. Additionally, legislation is continuously reviewed and amended to mitigate evolving threats. International Cooperation: Singapore focuses on bringing AML laws into line with international norms as a member of the Financial Action Task Force (FATF). In addition, in order to comply with Singapore's anti-money laundering laws, the Singaporean government participates in global programs aimed at reducing cross-border money laundering and terrorist financing through mutual analysis. Public-Private Partnership: The Singaporean government works with various private sectors, law enforcement agencies, and regulatory entities. This strategy facilitates the exchange of important information, the development of expertise, and the demonstration of cooperative efforts to reduce financial crime. Additionally, this endeavor promotes compliance in the financial industry and streamlines the implementation of AML measures.

7. What is the Legislation of Money Laundering in Singapore ? Singapore has a robust anti money laundering act or legislation to mitigate financial crimes. However, the primary law involves Corruption, Drug Trafficking, and Other Serious Crimes Act (CDSA) which prioritizes on outlining on ML prevention measures, detailed reporting process, and penalties for AML non-compliance. 1. Corruption, Drug Trafficking & Other Serious Act (CDSA) The foundation of Singapore's anti-money laundering (AML) structure is the CDSA, which makes money laundering illegal and provides a legal framework for the investigation, prosecution, and seizure of assets pertaining to serious crimes. This approach also gives regulatory and law enforcement agencies the ability to accurately respond to allegations of money laundering and support assets. 2 . Terrorism Suppression of Financing Act (TSOFA) Targeting the financing of terrorism by giving money to terrorist organizations or individuals is the main goal of TSOFA. With particular anti-money laundering checks and laws, it fosters international cooperation from terrorist financing networks by requiring financial institutions to do rigorous due diligence in order to prevent financing and enabling authorities to take assets.

8. 3. Precious Stones and Precious Metals Act (PSMTFA) By defining particular AML procedures for dealers, PSMTFA concentrates on the dangers of money laundering associated with precious stones or metals. It additionally upholds enhanced due diligence and licensing. 4 . Securities and Futures Act (SFA) SFA gives regulating AML requirements for firms with licenses in the securities, futures, and financial advising sectors top priority. In addition, it requires transaction tracking, reporting suspicious transactions, and customer due diligence. It also ensures vigilance in recognizing and avoiding financial fraud, including money laundering. 5 . Computer Misuse and Cybersecurity Act (CMCA) Cybercrime and computer-related offenses, including hacking and cyberfraud , are the focus of the CMCA. Furthermore, it enhances Singapore's capacity to lessen cyber-related financial crimes and safeguard financial transactions. 6. Personal Data Protection Act (PDPA) While it regulates personal data projections, PDPA is not solely focused on AML rules. Singapore mandates that organizations secure their personal data, which acts as an excellent anti-money laundering check and indirectly aids in the discovery of financial fraud by reducing identity theft and fraudulent actions .

9. How to Stay Compliant ? Organizations in Singapore are required by the Corruption, Drug, and other Serious Crimes Act (CDSA) to adhere to a series of guidelines in order to be compliant with AML legislation. These guidelines include : * Establish strong internal policies, processes, and risk-based monitoring to ensure compliance with AML regulations. This means that while developing these policies, companies need to consider the scale and complexity of their business. * Regardless of the industry your company operates in, it's critical to keep your workforce informed on the AML policies. Think about holding special training sessions for both new hires and current employees, and make sure they are informed about AML policies and procedures at least once a year. * Organize specialized training sessions to assist your employees in recognizing and mitigating suspicious activity. Make your team aware of the potential repercussions for your organization should you end up breaking any legislation or failing to keep an eye on transactions or money laundering attempts. * To identify ML/TF threats in Singapore for companies exposed to a range of potential crimes, conduct risk assessments. * Establish a compliance officer or AML specialists and outline their roles and responsibilities for AML compliance procedures that are tailored to your company's needs and sector. and notify particular Singaporean regulatory agencies of any questionable transactions.

10. In addition, the Designated Non-financial Businesses and Professions (DNFBPs) outlined in AML/CFT regulations involves: Real Estate (Agents & Companies) Dealers in Precious Stones & Metals Corporate Service Providers Public Accountants Lawyer Pawnbrokers Casinos To help you stay compliant with money laundering in Singapore, we are listing below a few significant procedures to run your business risk- fre

11. 1. Optimize & Track Value Transfers A value transfer includes a transaction conducted on behalf of a value transfer originator via a financial institution to make one or more available digital tokens. Before conducting a value transfer, the ordering institution must: * Identify value transfer originators and implement adequate measures to verify value transfer originator’s identity. * Record crucial details of value transfer like date of value transfer, value and type of digital tokens transferred and value date. Requirements : Value Transfer Below or Equal to $ 1500 * Name of value transfer originator * Value transfer’s account number * Name of value transfer beneficiary * Value transfer’s beneficiary account number Requirement : Value Transfer Exceeding $ 1500 * Value transfer originator’s residential address * Registered business address

12. 2. Extensive Customer Due Diligence (CDD) One of the crucial phases for AML compliance in Singapore is client due diligence, which guarantees that you onboard real customers after a careful evaluation. Additionally, this process include gathering and confirming customer documentation, acting as a thorough background investigation. As an initial step, entities must focus on collecting and verifying customer’s information such as: * Customer’s full name * Identification number – birth certificate number, identity card number & more * Nationality * Date of birth * Residential address In addition, if your customer is an organization, then it is crucial for businesses to verify and follow a few vital steps like: Verify entities business profile structure type, and more aspects * Check organization’s geographical aspects – specific region or country, the company operates from or where your customer is actively associated. * Furthermore check other factors like, type of services/products they provide, size, type or complexities of their transactions – mode of payment, and check for their preferred delivery or distribution channels

13. 3. Conduct Sanction & PEP Screening To prevent ML attempts, MAS mandates businesses in Singapore to conduct rigorous assessments, which includes conducting Politically Exposed Person (PEP), sanction screening, and adverse media checks to avoid onboarding customers who are blacklisted by local and global authorities. * Identify and access source of wealth and source of income or funds of your customers to ensure they are not involved into illegal activities * Track transactions, varied activities and customer’s behavior thoroughly and report it immediately to Sinagporean authorities if you detect any unusual activities in transactions without informing customers. 4 . Suspicious Transaction Reporting Have you noticed any odd behavior in the course of monitoring transactions? Anyone noticed any questionable information while doing a PEP screening? Once you have sufficient client information and suspect information from your recordkeeping, you must report it right away to the Suspicious Transaction Reporting Officer (STRO). Additionally, it is imperative that companies understand the various AML reporting requirements that apply to the industry they serve. For example, traders of precious stones and metals in Singapore are required to record every transaction above S$20,000. On the other hand, transactions over S$10,000 must be reported by casino businesses within 15 working days. Speak with our AML specialists to obtain software and customized AML solutions that will help you comply with a variety of rules.

14. What are the Penalties for Money Laundering Activities in Singapore ? 1. Hefty Fine Businesses that fail to comply with AML, can be fined for around $1 million by the Monetary Authority of Singapore (MAS). For instance, in 2016 MAS had fined multiple banks in SIngapore of around $29.1 million for poor transaction monitoring, customer due diligence, and even AML reporting. 2. Regulatory Penalty Apart from hefty fines, having gaps into your AML policies, or procedures can cause regulatory fines. This means, MAS can impose license revocation, put business limitations, and more. For example, in 2017 a bank was fined around $6.4 million and warned by MAS due to lack of assessing ML risks regarding client’s accounts, non-compliance of identification of anomaly client behavior with dedicated accounts. 3. Criminal Prosecution Failing to comply with AML regulations can lead to receiving a sentence for an ML offense. Individuals or entities involved in non-compliance of AML practices can face imprisonment of 10 years and fine of $1 million and more. In 2020, 2 lawyers were charged for ML offense for moving millions of dollars from client’s accounts to third-party accounts.

15. AML Penalty in Singapore Penalty Types: 1. Monetary Fine $1 million or more 2. Regulatory Fine License revocation, Business limitations 3. Criminal Prosecution Imprisonment for 10 years, or fine $1 million or twice Other Penalties: * Official Warnings * Prohibition Orders * Management removal * Reprimands * Asset confiscation * Business loss Money Laundering Activities: * Buying goods with illicit funds * Structuring cash transactions * Moving fund to third party account * Hiding money with shell companies

16. Final Thoughts Since 2016, Singapore's anti-money laundering legal system has undergone substantial change. To show its dedication to reducing financial crime even in an increasingly digitally complex environment, the MAS has updated AML regulations, reporting guidelines, and other protocols. The significance of adhering to these laws and effectively thwarting any possible money laundering attempts is underscored by the Corruption, Drug Trafficking & Other Serious Act (CDSA), Terrorism Suppression of Financing Act (TSOFA), Precious Stones and Precious Metals Act (PSMTFA), and other acts. Trust our unique AML software and services to assure automated procedures that comply with AML requirements, simplifying this process. Our AML specialists will offer you comprehensive guidance in creating efficient AML policies and procedures, as well as training for your personnel to facilitate transaction tracking, sanction screening, the CDD process, and AML reporting.