Responding to an inaugural national risk assessment report (NRA), the Monetary Authority of Singapore (MAS), the Ministry of Finance, and the Ministry of Home affairs said in a joint statement it plans to tighten controls in a number of financial sub-sectors.
The sectors under scrutiny include remittance agents, money-changers, internet-based stored value facility holders, corporate service providers and pawnbrokers, according to a joint statement by the Monetary Authority of Singapore, the Ministry of Finance, and the Ministry of Home affairs.
In addition, the MAS said, notwithstanding the lower money laundering and terrorist financing risks of financial advisers, “on-site reviews have shown that the anti-money laundering and counter-terrorism financing controls of some financial advisers have room for improvement.
The regulator added: “Weaknesses noted include lack of policies and procedures for updating of customer information and for conducting enhanced customer due diligence (CDD) for politically exposed persons (PEPs), as well as inadequate monitoring and review of dormant accounts and suspicious transactions."
‘Exposed’
In a joint statement, Singapore’s government offices said: “Singapore's openness as an international transport hub and financial centre exposes it to inherent cross-border money laundering and terrorist financing risks.
“The more vulnerable sectors include those that are internationally-oriented and cash-intensive. These sectors are where preventive measures against money laundering and terrorist financing are most needed."
To combat these issues, the government said relevant agencies will be strengthening the legislative and supervisory framework through the year to address the risks in these sectors more effectively.
The NRA, which was unveiled last Friday, also in fact noted that many sectors in the country’s financial segment have a “robust” regime in place to combat money laundering and terrorist financing.
The report said sectors such as banks and casinos have the relevant controls in place, in terms of customer due diligence, record keeping, ongoing transaction monitoring and rigorous supervision.
The 94-page NRA report is the culmination of a government-wide exercise over the last two years and covers 14 financial sub-sectors (including banks, insurers, financial advisers) and eight non-financial sectors in Singapore, taking into consideration the region’s economic and geographical environment, its legal, judicial and institutional framework as well as crime trends.
As regards direct life insurers, the MAS said "most have put in place AML/CFT controls that are generally commensurate with the nature, size and complexity of their business activities”.
The regulator added: “However, the robustness of their enhanced CDD measures and the rigour with which CDD measures are performed could be strengthened. Ongoing reviews of business relationships with existing politically exposed person and the escalation of such reviews to senior management could also be enhanced.”
As technology evolves and criminals become more sophisticated, the government has also identified several areas for further study, which include virtual currencies, precious stones and metals dealers, and the Singapore freeport.
“Authorities will seek to better understand how money laundering and terrorist financing can be carried out through these channels, as well as review international best practices, to determine whether any safeguards and mitigating measures are needed."
