31 January 2018
On 16 January 2018, the Monetary Authority of Singapore (“MAS”) released a consultation paper on changes to the anti-money laundering and countering of financing of terrorism (“AML/CFT”) requirements for money-changing and remittance businesses. The consultation closes on 12 February 2018.
In order to enhance the mitigation of risks in the sector, MAS proposes to:
- issue a new Notice on prohibitions of issuance of bearer instruments and restrictions on cash pay-outs (“new Notice”); and
- amend MAS Notice 3001 on “Prevention of Money Laundering and Countering the Financing of Terrorism - Holders of Money-Changer’s Licence and Remittance Licence” (“MAS Notice 3001”) to facilitate the conduct of non-face-to-face business and better mitigate the risks of foreign exchange (“FX”) transactions.
New Notice prohibiting issuance of bearer instruments and restricting cash pay-outs
Under the new Notice, MAS proposes to:
- prohibit holders of a money-changer’s licence and/or remittance licence (“licensees”) from making any payment in the form of a bearer negotiable instrument, e.g. cash cheques in any currency; and
- require holders of a remittance licence and holders of a money-changer’s licence who perform inward remittance transactions to use non-cash settlement methods for pay-outs of S$20,000 and above (or equivalent in foreign currency) to persons in Singapore.
These measures are proposed as money-changing and remittance businesses are inherently cash intensive and cash and bearer instruments, such as cash cheques, are anonymous in nature and open to abuse for the purpose of money laundering or terrorism financing (“ML/TF”).
Amendments to MAS Notice 3001
MAS proposes to amend MAS Notice 3001 as follows:
- Non-face-to-face business: MAS proposes to remove the current requirement for licensees to seek MAS’ prior approval to establish an account relationship with, or undertake a relevant business transaction without an account being opened for, a customer without face-to-face contact with the customer (“non-face-to-face business”). Licensees continue to be required to develop policies and procedures to address the specific ML/TF risks associated with non-face-to-face account relationships with a customer or non-face-to-face relevant business transactions undertaken without an account being opened for a customer. Additionally, licensees will be required to appoint an auditor to assess the effectiveness of policies and procedures put in place to mitigate the risk of non-face-to-face business, which assessment should be carried out no later than one year after commencement of the licensee’s non-face-to-face business relations.
- FX transactions: Holders of a remittance licence may occasionally buy or sell foreign currencies for their remittance needs. Where such foreign exchange transactions are done without the use of foreign currency notes, due diligence on their FX counterparties may not be performed, thus exposing licensees to ML/TF risks. MAS proposes to amend MAS Notice 3001 to require holders of a remittance licence to perform customer due diligence on such FX counterparties for the purchase or sale of foreign currencies.
The following materials are available on the MAS website www.mas.gov.sg:
- Consultation paper on changes to AML/CFT requirements imposed on money-changing and remittance businesses
- Annex B - New MAS Notice to Holders of Money-Changer’s Licence and Remittance Licence
- Annex C - Proposed Amendments to MAS Notice 3001
- Annex D - Proposed Amendment to Guidelines to MAS Notice 3001
- Annex E - Template for submission of feedback