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Public Consultation On Draft Notices To Financial Institutions On Prevention Of Money Laundering And Countering The Financing of Terrorism 
Posted on Friday, August 04, 2006 - 05:00 PM

On 3 Jan 2005, MAS released for public consultation, a first draft of a revised MAS Notice to Banks No. 626 on Prevention of Money Laundering and Countering the Financing of Terrorism (AML/CFT). Since then, there have been substantial developments on the international front in the area of AML/CFT. The Financial Action Task Force (FATF) has begun its third round of mutual evaluation of FATF member countries. Taking into account the comments received during the Jan 2005 consultation and developments in the implementation of the FATF standards, MAS has been working on further refinements to the AML/CFT regime for the Singapore financial sector.

Draft notices on AML/CFT have now been prepared for each of the following financial sectors – banks, finance companies, merchant banks, money changers and remitters, life insurers, capital markets intermediaries, financial advisers, approved trustees, and trust companies.

The revised notices incorporate a number of key changes:

· A more rigorous set of Customer Due Diligence (CDD) measures, including measures to identify and verify the identity of customers and beneficial owners, timing of verification, measures for existing customers and legal entities, and the consequential steps to be taken if CDD measures cannot be satisfactorily performed;

· An element of risk sensitivity in CDD. Enhanced measures are now required of higher risk customers, including correspondent banks and politically exposed persons (PEP), while simplified CDD can be adopted in instances where the risks of money laundering and terrorism financing are assessed to be low; and

· Requirements to give effect to FATF's Special Recommendation on cross-border wire transfers.

Each of these notices will impose legally binding obligations on the respective financial sectors, and will be further supplemented by companion guidelines (to be issued by MAS around 2nd half of August).

INVITATION FOR COMMENTS

MAS invites comments on the draft notices set out in Annexures 1 to 9. All respondents should note that submissions received by MAS may be made public unless confidentiality is expressly requested in respect of all or any part of the submission.

Submissions in electronic form (Microsoft Word) are strongly preferred, and should be sent via e-mail to the following address: aml@mas.gov.sg.

In the alternative, submissions in hard copy format may be delivered by post to:
AML/CFT Policy Unit
External Department
Monetary Authority of Singapore
10 Shenton Way, MAS Building
Singapore 079117

All submissions should be made by 4 September 2006.