MAS revises AML/CFT requirements for money-changing and remittance businesses

30 January 2019

On 9 January 2019, the Monetary Authority of Singapore (“MAS”) announced changes to the anti-money laundering and countering of financing of terrorism (“AML/CFT”) requirements for money-changing and remittance businesses. This follows a public consultation conducted by MAS from 16 January 2018 to 12 February 2018 which proposed the following measures to enhance the mitigation of risks in the sector:

  • Prohibiting the issuance of bearer negotiable instruments by holders of a money-changer’s licence or a remittance licence issued under the Money-changing and Remittance Businesses Act (collectively, “Licensees”); 
  • Imposing restriction on cash payouts by a Licensee; 
  • Removing the requirement for a Licensee to seek MAS’ approval prior to establishing an account relationship with, or undertaking a relevant business transaction without an account being opened for, a customer without face-to-face contact with the customer (“NFF business”); and 
  • Requiring a holder of a remittance licence to perform customer due diligence (“CDD”) on counterparties in a transaction for the purchase or sale of foreign currencies for its remittance needs, where the transaction is done without the use of foreign currency notes (“FX transaction”).

On 9 January 2019, MAS issued its Response to feedback received on the public consultation. Taking into consideration the feedback received, on 9 January 2019, MAS:

  • issued new MAS Notice 3006 on “Prohibition on Issuance of Bearer Negotiable Instruments and Restriction of Cash Payout” (“MAS Notice 3006”); 
  • revised MAS Notice 3001 on “Prevention on 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 NFF business and mitigate the risks of FX transactions.

New MAS Notice 3006

MAS Notice 3006 prohibits a Licensee from:

  • making any payment for any sum of money in the form of a bearer negotiable instrument; and 
  • paying any cash amounting to or exceeding S$20,000 to any person in respect of an inward remittance transaction from another country or jurisdiction to Singapore, or an FX transaction. 

MAS Notice 3006 will take effect from 8 July 2019.

Revised MAS Notice 3001

On 9 January 2019, MAS amended MAS Notice 3001 to provide that where a Licensee conducts NFF business, the Licensee must develop policies and procedures to address any specific risks associated with NFF account relationships with a customer or NFF relevant business transactions undertaken without an account being opened for a customer. This requirement took effect from 10 January 2019.

Licensees are no longer required to seek MAS’ approval to carry out NFF business contact. However, a Licensee which has not previously obtained the prior written approval of MAS to carry out NFF business contact must, at its own expense, appoint an external auditor or an independent qualified consultant to assess the effectiveness of its policies and procedures when it first conducts NFF business contact. The Licensee is required to submit to MAS a report of the assessment no later than one year after conduct of the Licensee’s NFF business contact.

With effect from 9 April 2019, a Licensee is required to perform CDD measures on counterparties in relation to an FX transaction of value equal to or exceeding S$20,000. This requirement will not apply if the FX counterparty is a financial institution:

  • as defined in section 27A(6) of the Monetary Authority of Singapore Act; or 
  • incorporated or established outside Singapore that is subject to, and supervised for compliance with, AML/CFT requirements consistent with standards set by the Financial Action Task Force. 

Reference materials

The following materials are available on the MAS website www.mas.gov.sg:

 

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