Laundering: Singapore proposes screening changes for forex, remittance businesses
16 Jan 2018

Singapore’s financial regulator has proposed new customer checks for forex, money changing and remittance businesses in order to curb financial crime risks.

The Monetary Authority of Singapore (MAS) on Tuesday published a consultation seeking industry views on its planned new rules that will require remittance firms to perform customer due diligence (CDD) on foreign exchange (FX) counterparties.

At present, due diligence on their FX counterparties does not have to be performed in cases where foreign exchange transactions are done without the use of foreign currency notes.

MAS is also looking at removing a requirement for a licensee to seek its approval to carry out non-face-to-face business, a move which it says is aimed at facilitating innovation, “taking into consideration new technology solutions.”

“In addition, 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. This assessment should be done no later than one year after commencement of the licensee’s non-face-to-face business relations,” the regulator said.

“In general, the licensee must perform CDD measures that are at least as robust as those that would be required to be performed if there was face-to-face contact,” it added.

MAS is also proposing to prohibit holders of a money-changer’s licence and remittance licence from issuing bearer instruments, for example cash cheques, in any currency to their customers.

“Cash and bearer instruments, such as cash cheques, are anonymous in nature and therefore open to abuse for the purpose of money laundering or terrorism financing,” the regulator said.

In addition to remittance and money changing businesses, Singapore has also launched a consultation on plans to regulate risks to payment services pertaining to money laundering and terrorism financing.

The latter is outlined in its second consultation on the Payment Services Bill, which was published in November last year.

MAS Managing Director, Mr Ravi Menon said at the time that the activity-based licensing framework seeks to right-size regulatory requirements in order to address the risks posed by specific payment activities.

Related topics:

Singapore: Deputy Prime Minister clarifies anti-money laundering rules for bitcoin

Singapore consults on money laundering risks to payment services

Asiaciti hack raises questions about Singapore’s tax regime

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