28 March 2018
On 5 March 2018, the Monetary Authority of Singapore (“MAS”) highlighted that the Financial Action Task Force (“FATF”) has published the Guidance on Private Sector Information Sharing (“Guidance”). The Interpretative Note to FATF Recommendation 18 (“INR.18”) which relates to financial groups’ internal controls, and their foreign branches and subsidiaries has also been revised.
FATF is an inter-governmental body that was established to set standards and to promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and the financing of proliferation, and other related threats to the integrity of the international financial system. The FATF Recommendations are universally recognised as the international standard for anti-money laundering and countering the financing of terrorism (“AML/CFT”).
The Guidance clarifies the FATF’s Standards on information sharing on a group-wide basis and between financial institutions (“FIs”) not belonging to the same financial group.
It highlights some legal constraints (e.g. requirements arising from differing data protection and privacy regimes) and operational challenges (e.g. restriction on outsourcing arrangements) that could hinder such information sharing and recommends ways to address them. It also provides an update on international developments on information sharing and country examples to facilitate information sharing within the group and between FIs not part of the same group, beyond that envisioned under the FATF Standards.
Revisions to INR.18
The revisions to INR.18 clarify the requirements on the sharing of information relating to unusual or suspicious transactions within the financial group.
The MAS announcement dated 5 March 2018 states that Singapore’s AML/CFT regime is facilitative of information sharing practices as recommended by the FATF Standards, including the latest revisions to INR.18 and as clarified in the Guidance.
FIs in Singapore can already share relevant information with branches and subsidiaries of the same financial group, for risk management purposes, subject to appropriate safeguards. Such sharing may include information contained within a Suspicious Transaction Report (“STR”), the fact that an STR has been filed, and the STR itself.
MAS encourages sharing of relevant information within the financial group for risk management purposes as a holistic view of a client relationship better enables the FI to strengthen its ML/TF risk assessment and controls. Furthermore, the AML/CFT Industry Partnership (ACIP) formed in April 2017 aims to enhance information sharing between public and private sector to strengthen system-wide risk detection and mitigation. FIs are reminded to refer to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, as well as other relevant acts such as the Banking Act and Trust Companies Act for more information on the specific provisions and conditions regarding such information sharing.
The following materials are available on the MAS website www.mas.gov.sg, or by clicking on the links below:
- MAS announcement
- Guidance on Private Sector Information Sharing
- Revised FATF Recommendations (incorporating revised INR.18)