Tightening AML/CFT Enforcement to Tackle Financial Crime
October 1, 2021
Singapore is seen as one of the largest financial centres in the world. The country has attracted both local and foreign investors to conduct various business and investment activities. This however exposes the country to a higher risk of money laundering and terrorist financing (ML/TF) activities. The risks in financial institutions (FIs) are relatively higher as they deal with large sum of money.
Recently, there are a number of money laundering scandals that have involved high profile individuals and reputable FIs. For this reason, the Monetary Authority of Singapore (MAS) has implemented a set of tight anti-money laundering and countering financing of terrorism (AML/CFT) controls. It spells out the supervisory expectations for different types of FIs. FIs have to adopt a risk-based approach and put in place adequate policies, procedures and controls. These measures help to identify potentially fraudulent activities and allow companies to take remedial action. For instance, licensed FIs have to conduct ongoing monitoring and pay special attention on the transaction patterns of their clients.
As the Singapore’s financial regulator, MAS plays an important role in performing regular inspections on the FIs’ AML/CFT systems to scrutinise its effectiveness in detecting suspicious transactions. Companies that fail to comply with the obligations might face penalties and enforcement actions such as imposition of financial penalties or even revocation of licences. Based on a recent news on CNA, Bank J. Safra Sarasin was fined S$1 million by MAS due to several breaches of laws and regulations. The compliance breaches include inadequate customer due diligence and improper transaction monitoring.
Conclusion
In fact, this is not the first time MAS imposed such penalties on FIs for breaching AML/CFT regulations. Before this, several banks, trust companies and fund management companies have faced the penalties when they failed to demonstrate effective anti-financial crime compliance. This indicates that Singapore takes the ML/TF issues seriously in order to uphold the country’s reputation for financial integrity. Indeed, it is a big challenge for the government and companies to control the financial crimes as it will incur high costs and require ongoing commitments from customers. Therefore, all forms of cooperation is necessary to promote a robust AML/CFT systems that can cope with the emerging threats and create a safe, resilient financial sector that sustains for a long term in Singapore.
How we can help
- Review existing AML/CFT policy to ensure company’s regulatory compliance
- Assist to draft a new AML/CFT policy that aligns with MAS requirements
- Provide Compliance & AML Training
- Provide ongoing compliance advice
Reference Materials
Ng, H. S. (2021). ‘S$1 million penalty for Singapore branch of Swiss bank for breaching anti-money laundering requirements’, CNA, 14 April. Available at: https://www.channelnewsasia.com/business/mas-1-million-penalty-bank-j-safra-sarasin-money-laundering-217371
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