AML in Singapore

Singapore stands as a prominent player in the global fight against money laundering, terrorist financing, and other financial crimes. As a crucial international business hub, Singapore strives to establish a transparent and trustworthy financial system. It actively participates as a member of the Financial Action Task Force (FATF), ensuring its commitment to upholding global Anti-Money Laundering (AML) standards. Additionally, Singapore proudly holds the status of being one of the founding members of the Asia/Pacific Group on Money Laundering, further highlighting its dedication to combating money laundering and related offenses.

In 1971, the establishment of the Monetary Authority of Singapore (MAS) took place, with the primary objective of supervising and regulating Singapore’s financial and banking sectors. Serving as both the central bank and financial regulator, MAS carries out a crucial role in safeguarding Singapore’s economy. One of its significant responsibilities is the prevention of money laundering and the financing of terrorism. Through effective organization and oversight of financial institutions, the Monetary Authority of Singapore plays a vital role in protecting the Singapore economy from the perils of financial crimes.

Detecting and Mitigating Risks of Money Laundering and Terrorist Financing

Organizations must possess a comprehensive understanding of money laundering and terrorist financing risks. It is imperative for managers within organizations to grasp the potential risks associated with financial crimes and take necessary steps to establish an effective Anti-Money Laundering (AML) program. To ensure the successful implementation of AML policies and procedures, organizations should appoint AML officers who are responsible for their maintenance.

Know Your Customer and Customer Due Diligence Procedures

Know Your Customer (KYC) and Customer Due Diligence procedures form the foundation of an organization’s AML policies. Organizations are required to acquire essential information about their customers before engaging in transactions. This information enables organizations to ascertain the identity of their customers accurately. The accuracy of customer information is of utmost importance, as incorrect data can lead to significant issues for organizations. Following the verification of customer information, Customer Due Diligence procedures are employed to assess the level of risk associated with each customer. One aspect of Customer Due Diligence is determining if the customer is a Politically Exposed Person (PEP). If a customer is deemed high-risk, Enhanced Due Diligence measures are implemented.

Monitoring Customer Accounts

Regular monitoring of customer accounts and financial transactions is essential for organizations. This process involves assessing the consistency between the customer’s risk profile and their financial activities. High-risk customers should be subject to more frequent monitoring by organizations.

Detection and Reporting of Suspicious Transactions

Suspicious transactions are characterized by their deviation from customers’ risk profiles and are indicative of potential financial crimes. AML officers play a crucial role in detecting and reporting such transactions, as they carry the risk of financial crimes. Suspicious Activity Reports are filed with the Commercial Affairs Department of Singapore to report any identified suspicious transactions.