Anti-Money Laundering 2018

ICLG

The International Comparative Legal Guide to:

Anti-Money Laundering 2018 1st Edition A practical cross-border insight into anti-money laundering law Published by Global Legal Group with contributions from:

Allen & Overy LLP ANAGNOSTOPOULOS ASAS LAW Barnea BONIFASSI Avocats C6 an Acuris Company Castillo Laman Tan Pantaleon & San Jose Law Offices Chambers of Anuradha Lall Debevoise & Plimpton DQ Advocates Limited Drew & Napier LLC DSM Avocats à la Cour Duff & Phelps, LLC Durrieu Abogados S.C. EB LEGAL Encompass

Gibson, Dunn & Crutcher LLP Hamdan AlShamsi Lawyers & Legal Consultants Herbert Smith Freehills Germany LLP JMiles & Co. Joyce Roysen Advogados Kellerhals Carrard Zürich KlG King & Wood Mallesons Linklaters Morais Leitão, Galvão Teles, Soares da Silva & Associados, SP, RL. Navigant Consulting Rato, Ling, Lei & Cortés – Advogados Rustam Kurmaev & Partners Shri Singh WilmerHale Yamashita, Tsuge and Nimura Law Office

The International Comparative Legal Guide to: Anti-Money Laundering 2018 General Chapters:

Contributing Editors Joel M. Cohen and Stephanie Brooker, Gibson, Dunn & Crutcher LLP Sales Director Florjan Osmani Account Director Oliver Smith Sales Support Manager Toni Hayward Senior Editors Suzie Levy Caroline Collingwood CEO Dror Levy Group Consulting Editor Alan Falach

1

Overview of Recent AML Gatekeeper International and U.S. Developments – Stephanie Brooker & Joel M. Cohen, Gibson, Dunn & Crutcher LLP 1

2

Beneficial Ownership Transparency: A Critical Element of AML Compliance – Matthew L. Biben, Debevoise & Plimpton

14

3

Anti-Money Laundering Regulation of Cryptocurrency: U.S. and Global Approaches – Daniel Holman & Barbara Stettner, Allen & Overy LLP 19

4

Through a Mirror, Darkly: AML Risk in Trade Finance – Alma Angotti and Robert Dedman, Navigant Consulting 33

5

Implications of the E.U. General Data Privacy Regulation for U.S. Anti-Money Laundering and Economic Sanctions Compliance – Sharon Cohen Levin & Franca Harris Gutierrez, WilmerHale

6

Navigating the AML Compliance Minefield – Norman Harrison & Kathy Malone, Duff & Phelps, LLC 45

39

7 Best Practice in AML/KYC Compliance: The Role of Data and Technology in Driving Efficiency and Consistency – Wayne Johnson, Encompass & Joel Lange, C6 an Acuris Company 50

Country Question and Answer Chapters: 8

Argentina

Durrieu Abogados S.C.: Justo Lo Prete & Florencia Maciel

55

9

Australia

King & Wood Mallesons: Kate Jackson-Maynes & Amelia Jamieson

61

Publisher Rory Smith

10 Belgium

Linklaters: Françoise Lefèvre & Rinaldo Saporito

68

11 Brazil

Joyce Roysen Advogados: Joyce Roysen & Veridiana Vianna

74

Published by Global Legal Group Ltd. 59 Tanner Street London SE1 3PL, UK Tel: +44 20 7367 0720 Fax: +44 20 7407 5255 Email: [email protected] URL: www.glgroup.co.uk

12 China

King & Wood Mallesons: Chen Yun & Liang Yixuan

81

13 France

BONIFASSI Avocats: Stéphane Bonifassi & Caroline Goussé

88

14 Germany

Herbert Smith Freehills Germany LLP: Dr. Dirk Seiler & Enno Appel

96

15 Greece

ANAGNOSTOPOULOS: Ilias Anagnostopoulos & Alexandros Tsagkalidis 103

16 Hong Kong

King & Wood Mallesons: Urszula McCormack

17 India

Shri Singh & Chambers of Anuradha Lall: Shri Singh & Anuradha Lall

116

18 Isle of Man

DQ Advocates Limited: Sinead O’Connor & Kirsten Middleton

123

19 Israel

Barnea Law: Dr. Zvi Gabbay & Adv. David Gilinsky

129

20 Japan

Yamashita, Tsuge and Nimura Law Office: Ryu Nakazaki

136

Printed by Ashford Colour Press Ltd June 2018

21 Kenya

JMiles & Co.: Leah Njoroge-Kibe & Elizabeth Kageni

142

22 Lebanon

ASAS LAW: Nada Abdelsater-Abusamra & Serena Ghanimeh

148

DSM Avocats à la Cour: Marie-Paule Gillen

156

Copyright © 2018 Global Legal Group Ltd. All rights reserved No photocopying

23 Luxembourg 24 Macau

Rato, Ling, Lei & Cortés - Advogados: Pedro Cortés & Óscar Alberto Madureira 161

25 Philippines

Castillo Laman Tan Pantaleon & San Jose Law Offices: Roberto N. Dio & Louie Alfred G. Pantoni 168

26 Portugal

Morais Leitão, Galvão Teles, Soares da Silva & Associados, SP, RL.: Filipa Marques Júnior & Tiago Geraldo 175

27 Russia

Rustam Kurmaev & Partners: Rustam Kurmaev

181

28 Singapore

Drew & Napier LLC: Gary Low & Vikram Ranjan Ramasamy

186

29 Switzerland

Kellerhals Carrard Zürich KlG: Omar Abo Youssef & Lea Ruckstuhl

193

30 Turkey

EB LEGAL: Prof. Av. Esra Bicen

200

31 United Arab Emirates

Hamdan AlShamsi Lawyers & Legal Consultants: Hamdan AlShamsi & Omar Kamel 209

GLG Cover Design F&F Studio Design GLG Cover Image Source iStockphoto

ISBN 978-1-912509-12-6 ISSN 2515-4192 Strategic Partners

109

32 United Kingdom

Allen & Overy LLP: Mona Vaswani & Amy Edwards

215

33 USA

Gibson, Dunn & Crutcher LLP: Stephanie Brooker & Linda Noonan

223

Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720 Disclaimer This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations.

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Chapter 28

Singapore

Gary Low

Drew & Napier LLC

1 The Crime of Money Laundering and Criminal Enforcement 1.1

Vikram Ranjan Ramasamy

Section

Physical element

43 / 44

Knowing or having reasonable grounds to believe that by the arrangement: (a) the retention or control by or on behalf of another person of that other person’s benefits of drug dealing / criminal conduct is facilitated (whether by concealment, removal from jurisdiction, transfer to nominees or otherwise); or (b) that other person’s benefits of drug dealing / from criminal Entering into, conduct: or otherwise being (i) are used to secure funds that concerned in an are placed at that other person’s arrangement. disposal, directly or indirectly; or (ii) are used for that other person’s benefit to acquire property by way of investment or otherwise, and knowing or having reasonable grounds to believe that that other person is a person who carries on or has carried on drug dealing or has benefited from drug dealing / is a person who engages in or has engaged in criminal conduct or has benefited from criminal conduct.

46(1) / 47(1)

Conceal, disguise, convert, transfer, remove from the jurisdiction, acquire, possess, or use any property Strict liability. which is, or in whole or in part, directly or indirectly, represents, his benefits of drug dealing / from criminal conduct.

What is the legal authority to prosecute money laundering at national level?

The Attorney-General in his role as the Public Prosecutor (“PP”) prosecutes money laundering offences in Singapore. 1.2

What must be proven by the government to establish money laundering as a criminal offence? What money laundering predicate offences are included? Is tax evasion a predicate offence for money laundering?

The primary legislation targeting money laundering is the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap. 65A) (“CDSA”), in particular, sections 43, 44, 46, and 47. These provisions do not use the term “money laundering” per se. What must be proven Sections 43 and 44 of the CDSA deal with the offences of assisting another to retain the benefits of drug dealing, or from criminal conduct, respectively. Further, sections 46 and 47 of the CDSA deal with the offences of acquiring, possessing, using, concealing or transferring the benefits of drug dealing, or criminal conduct, respectively. The elements of these offences which the PP must prove are as follows:

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Mental element

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46(2) / 47(2)

46(3) / 47(3)

Physical element

Mental element

1.4

Conceal, disguise, convert, transfer, or remove from the jurisdiction any such property described in the right column.

Knowing or having reasonable grounds to believe that any property is, or in whole or in part, directly or indirectly, represents, another person’s benefits of drug dealing / from criminal conduct.

The primary investigative agency for money laundering offences is the Commercial Affairs Department (“CAD”), a department of the Singapore Police Force (“SPF”). Officers of the Central Narcotics Bureau and the Corrupt Practices Investigation Bureau are also involved in investigating certain kinds of money laundering offences. The CDSA expressly confers officers of these agencies with various powers and rights to aid in their investigation of money laundering offences.

Acquire, possess, or use any such property described in the right column.

Knowing or having reasonable grounds to believe that any property is, or in whole or in part, directly or indirectly, represents, another person’s benefits of drug dealing / from criminal conduct.

The PP and the officers of the Attorney-General’s Chambers (“AGC”) acting under the authority of the PP prosecute money laundering offences in consultation with the aforementioned investigative agencies. 1.5

In this regard, “drug dealing” means doing or being concerned in, whether in Singapore or elsewhere, any act constituting a drug dealing offence or a foreign drug dealing offence. Further, “criminal conduct” means doing or being concerned in, whether in Singapore or elsewhere, any act constituting a serious offence or a foreign serious offence (see section 2(1), CDSA).

1.6

There are numerous predicate offences for money laundering.

The second category of predicate offences is “serious offences”, which means: (a) any of the offences specified in the Second Schedule of the CDSA; (b) conspiracy, inciting others, or attempting to commit any of those offences; or (c) aiding, abetting, counselling or procuring the commission of any of those offences. In this regard, a “foreign serious offence” means an offence (other than a foreign drug dealing offence) against the law of a foreign country or part thereof that consists of or includes conduct which, if the conduct had occurred in Singapore, would have constituted a serious offence, and includes a foreign serious tax offence (see section 2(1), CDSA). Tax evasion under Singapore law and the national law of a foreign country in certain specified forms constitutes a serious offence and a foreign serious tax offence, respectively (and hence are predicate offences), for the money laundering offences under sections 44 and 47 of the CDSA (see section 2(1) and the Second Schedule, CDSA). 1.3

Is there extraterritorial jurisdiction for the crime of money laundering? Is money laundering of the proceeds of foreign crimes punishable?

Yes, the CDSA can apply whether the predicate offences take place in Singapore or elsewhere (see question 1.2 above).

Is there corporate criminal liability or only liability for natural persons?

There is both corporate criminal liability and liability for natural persons under the CDSA.

Predicate offences The first category of predicate offences is “drug dealing offences”, which means: (a) any of the offences specified in the First Schedule of the CDSA; (b) conspiracy, inciting another, or attempting to commit any of those offences; or (c) aiding, abetting, counselling or procuring the commission of any of those offences. In this regard, a “foreign drug dealing offence” means an offence against a corresponding law of a foreign country that consists of or includes conduct which, if the conduct had occurred in Singapore, would have constituted a drug dealing offence (see section 2(1), CDSA).

Which government authorities are responsible for investigating and prosecuting money laundering criminal offences?

Singapore

Section

Singapore

What are the maximum penalties applicable to individuals and legal entities convicted of money laundering?

The maximum penalties for an offence under sections 43, 44, 46, and 47 of the CDSA are: (a) if the person is an individual, a fine not exceeding S$500,000 or imprisonment for a term not exceeding 10 years or both, per charge; and (b) if the person is not an individual, a fine not exceeding S$1,000,000, per charge. 1.7

What is the statute of limitations for money laundering crimes?

There is no applicable limitation period for money laundering crimes or for the prosecution of criminal offences in general. Nevertheless, where there has been an inordinate delay in prosecution, this may be a factor that the Court considers in sentencing. 1.8

Is enforcement only at the national level? Are there parallel state or provincial criminal offences?

Yes, enforcement is only at national level. There is no “state” or “provincial” criminal legislation, as there are no states or provinces in Singapore. 1.9

Are there related forfeiture/confiscation authorities? What property is subject to confiscation? Under what circumstances can there be confiscation against funds or property if there has been no criminal conviction, i.e., non-criminal confiscation or civil forfeiture?

There is no separate forfeiture / confiscation authority. Under section 2(1) of the CDSA, “property” is defined broadly to mean money and all other property, movable or immovable, including things in action and other intangible or incorporeal property. Pursuant to sections 4 and 5 of the CDSA, where a defendant is convicted of one or more drug dealing offences or

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serious offences, the Court shall, on the application of the PP, make a confiscation order against the defendant in respect of benefits derived by him from drug dealing or criminal conduct if the Court is satisfied that such benefits have been so derived. Under the Organised Crime Act 2015 (No. 26 of 2015) (“OCA”), the PP may apply to the Court for a confiscation order and the Court is to make such an order against a person if it is satisfied on a balance of probabilities that the said person has: (a) carried out organised crime activity (including the offences under sections 43, 44, 46, and 47 of the CDSA) within the defined statutory period; and (b) derived benefits from the organised crime activity (see sections 61(1) and 61(2), OCA). Crucially, the organised crime activity on which the said confiscation order is based does not need to be, or to have been, the subject of any criminal proceedings (see section 51, OCA). Further, if criminal proceedings are instituted or pending or have been discontinued or determined in respect of any organised crime activity that is the basis for a confiscation order made under the OCA, the said confiscation order is not affected by the criminal proceedings, even if the person is acquitted (see section 53, OCA). In this regard, “property” is defined in the same way under the OCA as the CDSA (see section 2(1), OCA). 1.10 Have banks or other regulated financial institutions or their directors, officers or employees been convicted of money laundering?

While it is rare for banks and other regulated financial institutions (“FIs”) to be formally charged and convicted in Court for money laundering offences, officers and employees of FIs have previously been convicted in Court for such offences in Singapore. For example, in July 2017, one Yeo Jiawei, a former wealth planner at BSI Bank Limited (“BSI”), was sentenced to 54 months’ imprisonment for money laundering and cheating in a case related to the probe into Malaysian state fund 1Malaysia Development Berhad (“1MDB”). 1.11 How are criminal actions resolved or settled if not through the judicial process? Are records of the fact and terms of such settlements public?

Criminal actions under the CDSA are generally resolved through the judicial process. However, following the passage of the Criminal Justice Reform Bill on 19 March 2018, certain specified criminal actions (including those in respect of offences under sections 43, 44, 46, and 47 of the CDSA) may now be resolved through deferred prosecution agreements (“DPAs”). A DPA comes into force only when the High Court approves it by making a declaration that the DPA is in the interests of justice, and that its terms are fair, reasonable, and proportionate. After such approval, the DPA must in general be published.

2 Anti-Money Laundering Regulatory/ Administrative Requirements and Enforcement 2.1

What are the legal or administrative authorities for imposing anti-money laundering requirements on financial institutions and other businesses? Please provide the details of such anti-money laundering requirements.

The Monetary Authority of Singapore (“MAS”) is the integrated financial regulator that imposes anti-money laundering (“AML”)

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Singapore requirements on FIs in Singapore. Other authorities / agencies that impose AML requirements on designated non-financial businesses and professions (“DNFBPs”) include the Casino Regulatory Authority of Singapore (for casino operators), the Accounting and Corporate Regulatory Authority (“ACRA”) (for corporate service providers, public accountants and accounting entities), and the Council for Estate Agencies (for estate agents and salespersons). In respect of the details of the said AML requirements, see question 3.1 below. 2.2

Are there any anti-money laundering requirements imposed by self-regulatory organisations or professional associations?

Yes, there are self-regulatory organisations and professional associations that impose AML requirements on various DNFBPs, including the Council of the Law Society of Singapore (for legal practitioners and law practices) and the Council of the Institute of Singapore Chartered Accountants (for professional accountants and professional accounting firms). 2.3

Are self-regulatory organisations or professional associations responsible for anti-money laundering compliance and enforcement against their members?

Yes, self-regulatory organisations and professional associations play a role in ensuring AML compliance and may have their own enforcement measures against errant members. For example, for legal practitioners and law practices, contravention of the provisions of the Legal Profession Act (Cap. 161) (“LPA”) (read with the Legal Profession (Prevention of Money Laundering and Financing of Terrorism) Rules 2015) relating to, among other things, AML, may subject the offending legal practitioner or law practice to disciplinary proceedings or regulatory actions under the LPA. 2.4

Are there requirements only at the national level?

Yes, there are requirements only at national level. 2.5

Which government agencies/competent authorities are responsible for examination for compliance and enforcement of anti-money laundering requirements? Are the criteria for examination publicly available?

The Suspicious Transaction Reporting Office (“STRO”) and the agencies set out at question 1.4 above are responsible for the examination for compliance (see question 2.6 below) and enforcement of AML requirements under the CDSA, respectively. Separately, MAS is Singapore’s integrated financial regulator, while various other government authorities / agencies are responsible for the examination for compliance and enforcement of AML requirements in specific industry sectors (see question 2.1 above). Further, the Registrar of Moneylenders and the Registrar of Pawnbrokers oversee the regulation of moneylenders and pawnbrokers in Singapore, respectively. 2.6

Is there a government Financial Intelligence Unit (“FIU”) responsible for analysing information reported by financial institutions and businesses subject to anti-money laundering requirements? If so, are the criteria for examination publicly available?

The STRO is Singapore’s FIU. It receives Suspicious Transaction



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Industry sector regulators may also issue directions and guidelines on AML measures, including the manner of suspicious transaction reporting, as well as the types of suspicious transactions that each industry should take note of. These are typically issued with input from the STRO and are usually publicly available. 2.7

What is the applicable statute of limitations for competent authorities to bring enforcement actions?

There is no applicable limitation period for enforcement actions. 2.8

What are the maximum penalties for failure to comply with the regulatory/administrative anti-money laundering requirements and what failures are subject to the penalty provisions?

The penalties for failure to comply with the relevant regulatory / administrative AML requirements vary across industry sectors. In the case of FIs, under the Monetary Authority of Singapore Act (Cap. 186) (“MAS Act”), where a FI is convicted for failing to comply with or contravening any direction issued or regulation made by MAS for the prevention of money laundering, it is liable to a fine not exceeding S$1,000,000, per charge, and, in the case of a continuing offence, to a further fine of S$100,000 for every day or part of a day during which the offence continues after conviction, per charge (see section 27B(2), MAS Act). In practice, non-compliance with AML requirements may be compounded into financial settlements without criminal prosecution. In this regard, MAS has the discretion to compound any offence under the MAS Act which is punishable with a fine only by collecting from a person reasonably suspected of having committed the offence a sum of money not exceeding one-half of the amount of the maximum fine prescribed for that offence (see section 41A(1), MAS Act, and regulation 2, Monetary Authority of Singapore (Composition of Offences) Regulations 2007). Apart from financial penalties, MAS has other sanctions at its disposal (see question 2.9 below). 2.9

What other types of sanction can be imposed on individuals and legal entities besides monetary fines and penalties?

Again, sanctions vary across industry sectors. In the case of FIs, MAS can impose non-financial sanctions such as formal warnings / reprimands, prohibition orders against culpable individuals, placing restrictions on operations, and even revoking licences. For example, in 2016, following investigations into 1MDB, MAS withdrew the merchant bank status of BSI and Falcon Private Bank Ltd, Singapore Branch for, among other things, serious breaches of AML requirements. 2.10 Are the penalties only administrative/civil? Are violations of anti-money laundering obligations also subject to criminal sanctions?

Violations of AML obligations are also subject to criminal sanctions

in certain instances. For example, under section 27B(2) of the MAS Act, it is an offence if a FI fails to comply with or contravenes any AML direction issued or regulation made by MAS (see question 2.8 above). 2.11 What is the process for assessment and collection of sanctions and appeal of administrative decisions? a) Are all resolutions of penalty actions by competent authorities public? b) Have financial institutions challenged penalty assessments in judicial or administrative proceedings?

Singapore

Reports (“STRs”) and other financial information, including Cash Transaction Reports (“CTRs”), and Physical Currency and Bearer Negotiable Instruments Reports (“CBNI Reports”) (in respect of cross-border movements of physical currency and bearer negotiable instruments (“CBNI”)), and analyses such information to detect, among other things, money laundering offences. Thereafter, the STRO disseminates the results of any such analysis to the relevant regulatory and enforcement authorities / agencies.

Singapore

In general, the relevant regulatory authority will assess the appropriate sanction(s) to be imposed based on its own internal guidelines and precedents. Judicial review of administrative decisions is possible, but rarely pursued in practice. Typically, most resolutions of penalty actions are published by the relevant regulatory authority. As penalty assessments are usually composition fines, FIs cannot, by the nature of the composition of offences, challenge them.

3 Anti-Money Laundering Requirements for Financial Institutions and Other Designated Businesses 3.1

What financial institutions and other businesses are subject to anti-money laundering requirements? Describe which professional activities are subject to such requirements and the obligations of the financial institutions and other businesses.

The following FIs and DNFBPs are subject to specific AML requirements in addition to those under the CDSA: (a)

(b)

FIs: approved trustees of a collective investment scheme authorised under the Securities and Futures Act (Cap. 289), banks, capital markets intermediaries, credit card or charge card licensees, direct life insurers, financial advisers, finance companies, insurance brokers, merchant banks, moneychanging or remittance business licensees, stored value facility holders, The Central Depository (Pte) Limited (“CDP”), and trust companies; and DNFBPs: casino operators, corporate service providers, dealers in precious stones and / or precious metals, estate agents and salespersons, legal practitioners and law practices, moneylenders, pawnbrokers, and professional accountants and professional accounting firms (including public accountants and accounting entities).

The obligations of the said FIs and DNFBPs are set out in specific statutes, subsidiary legislation, directions, guidelines, codes, and practice notes / circulars. These typically include: (i) undertaking customer due diligence (“CDD”) measures; (ii) reporting requirements; (iii) record keeping requirements; and (iv) developing and implementing internal policies, procedures, and controls. In doing so, a risk-based approach is commonly adopted to identify, assess, manage, and mitigate money laundering risks. 3.2

Are certain financial institutions or designated businesses required to maintain compliance programmes? What are the required elements of the programmes?

Again, these vary across industry sectors, but FIs and DNFBPs subject to AML requirements are generally required to have a basic compliance framework in place. This will typically include measures in relation to CDD, reporting, record keeping, and internal policies, procedures, and controls (see question 3.1 above).


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What are the requirements for recordkeeping or reporting large currency transactions? When must reports be filed and at what thresholds?

Singapore

Record keeping Requirements for record keeping vary across industry sectors. FIs and DNFBPs subject to AML requirements are required to retain CDD, transaction, and other relevant documents and information for a minimum period of generally five years. Further, under the CDSA, FIs must retain and store financial transaction documents for a minimum period of five years (see sections 36 and 37, CDSA). Reporting large currency transactions A dealer in precious stones and / or precious metals who enters into any of the following cash transactions must submit a CTR relating to that transaction to the STRO: (a)

a single cash transaction with a customer the value of which exceeds S$20,000 (or its equivalent in a foreign currency); or

(b)

two or more cash transactions in a single day with the same customer, or with customers whom the said dealer knows act on behalf of the same person, the total value of which exceeds S$20,000 (or its equivalent in a foreign currency).

The CTR must be submitted within 15 business days after the date on which the cash transaction is entered into (in the case of (a)), or all of those cash transactions are entered into (in the case of (b)) (see sections 48H, 48I and 48J, CDSA, and regulations 4, 7, and 10, Corruption, Drug Trafficking and Other Serious Crimes (Cash Transaction Reports) Regulations 2014). Further, such dealers must maintain records of such cash transactions, as well as customer information, for a period of five years (see section 48K, CDSA). Similarly, a casino operator must file with the STRO a CTR of: (a) every cash transaction with a patron involving either cash in or cash out of S$10,000 or more in a single transaction, within 15 days after the date on which the single cash transaction takes place; or (b) multiple cash transactions which the casino operator knows are entered into by or on behalf of a patron, the aggregate of which is either cash in or cash out of S$10,000 or more in any gaming day, within 15 days after the date the last transaction of the multiple cash transactions takes place (see regulation 3, Casino Control (Prevention of Money Laundering and Terrorism Financing) Regulations 2009). For when a CBNI Report must be filed in respect of cross-border movements of CBNI, see question 3.5 below. 3.4

Are there any requirements to report routine transactions other than large cash transactions? If so, please describe the types of transactions, where reports should be filed and at what thresholds, and any exceptions.

Yes. STRs and CBNI Reports are the other types of reports that may be filed with the STRO. For when a STR must be filed, see question 3.8 below. For when a CBNI Report must be filed, see question 3.5 below. 3.5

Are there cross-border transaction reporting requirements? Who is subject to the requirements and what must be reported under what circumstances?

Yes, a person who moves or attempts to move into or out of Singapore CBNI the total value of which exceeds S$20,000 (or its

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Singapore equivalent in a foreign currency), must give a report in respect of the movement. Further, a person who receives CBNI the total value of which exceeds S$20,000 (or its equivalent in a foreign currency), which is moved to the person from outside Singapore, must make a report in respect of the receipt within five business days beginning on the day of the receipt (see sections 48C and 48E, CDSA, and regulations 2A and 4A, Corruption, Drug Trafficking and Other Serious Crimes (Cross Border Movements of Physical Currency and Bearer Negotiable Instruments) Regulations 2007). The CDSA provides for exemptions from the first reporting requirement above (see sections 48C(7) and 48C(8), CDSA). Further exemptions in respect of both reporting requirements above are set out in the Corruption, Drug Trafficking and Other Serious Crimes (Cross Border Movements of Physical Currency and Bearer Negotiable Instruments) (Exemption) Orders 2007 and 2010. 3.6

Describe the customer identification and due diligence requirements for financial institutions and other businesses subject to the anti-money laundering requirements. Are there any special or enhanced due diligence requirements for certain types of customers?

Customer identification and CDD requirements for FIs and DNFBPs subject to AML requirements commonly include: (a)

identifying and verifying the identity of the customer (or any beneficial owner in relation to the customer);

(b)

understanding the purpose and intended nature of the business relationship with the customer; and

(c)

ongoing monitoring of the business relationship with the customer.

As mentioned in question 3.1 above, a risk-based approach is commonly adopted. Therefore, enhanced CDD measures are required for certain types of customers / transactions where the risk of money laundering is higher, including where the relevant FI or DNFBP is dealing with a politically-exposed person (or a family member or close associate of a politically-exposed person), or where a customer is from or in, or the transaction relates to, a country or jurisdiction in relation to which the Financial Action Task Force (“FATF”) has called for countermeasures or enhanced CDD measures, or is known to have inadequate AML measures. Such enhanced CDD measures commonly include obtaining the approval of senior management before establishing or continuing a business relationship with the customer, taking reasonable measures to establish the customer’s source of wealth / funds, and conducting enhanced ongoing monitoring of the business relationship with the customer. 3.7

Are financial institution accounts for foreign shell banks (banks with no physical presence in the countries where they are licensed and no effective supervision) prohibited? Which types of financial institutions are subject to the prohibition?

Yes, FIs are prohibited from entering into or continuing correspondent banking or other similar services relationship (in the case of banks, finance companies, and merchant banks) / correspondent account services relationship (in the case of capital markets intermediaries) / correspondent account relations (in the case of the CDP) / correspondent account services or other similar services relationship (in the case of stored value facility holders) with shell FIs, and each must take appropriate measures when establishing the relevant relationship, to satisfy itself that its respondent FIs do not permit their accounts to be used by shell FIs.



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3.8

What is the criteria for reporting suspicious activity?

If a person knows or has reasonable grounds to suspect that any property: (a) in whole or in part, directly or indirectly, represents the proceeds of; (b) was used in connection with; or (c) is intended to be used in connection with, any act which may constitute drug dealing / criminal conduct, and the information or matter on which the knowledge or suspicion is based came to his attention in the course of his trade, profession, business or employment, then he must make a STR disclosing the knowledge or suspicion or the information or other matter on which that knowledge or suspicion is based as soon as is reasonably practicable after it comes to his attention (see section 39, CDSA). 3.9

Does the government maintain current and adequate information about legal entities and their management and ownership, i.e., corporate registries to assist financial institutions with their anti-money laundering customer due diligence responsibilities, including obtaining current beneficial ownership information about legal entity customers?

ACRA maintains a database of business entities (e.g. companies, sole proprietorships, partnerships) in Singapore and requires that the information in relation to the said entities be kept updated. Such information includes particulars of management (directors of the company, or sole proprietor, or partners), shareholders, secretaries, registered address, date of registration of the entity, date of change of name and / or address, issued and paid-up share capital, as well as charges held over assets of the entity (if any). Business profiles of entities are publicly available online for purchase to assist FIs and DNFBPs with their AML CDD responsibilities. 3.10 Is it a requirement that accurate information about originators and beneficiaries be included in payment orders for a funds transfer? Should such information also be included in payment instructions to other financial institutions?

Yes, it is a requirement that accurate information about originators and beneficiaries be included in the message or payment instruction that accompanies or relates to a wire transfer. These requirements do not apply to a transfer and settlement between the relevant FI and another FI where both FIs are acting on their own behalf as the wire transfer originator and the wire transfer beneficiary (see paragraph 11 of MAS Notice 626, paragraph 11 of MAS Notice 824, paragraph 11 of MAS Notice 1014, and paragraph 12 of MAS Notice 3001). 3.11 Is ownership of legal entities in the form of bearer shares permitted?

Ownership of legal entities in the form of bearer shares is not permitted in Singapore (see sections 66 and 364, Companies Act (Cap. 50)). 3.12 Are there specific anti-money laundering requirements applied to non-financial institution businesses, e.g., currency reporting?

Yes, specific AML requirements are applicable to non-FI businesses (i.e. DNFBPs) (see questions 3.1, 3.3, and 3.6 above).

3.13 Are there anti-money laundering requirements applicable to certain business sectors, such as persons engaged in international trade or persons in certain geographic areas such as free trade zones?

Yes, see questions 3.1 to 3.3, 3.6, 3.7 and 3.10 above.

4 General 4.1

If not outlined above, what additional anti-money laundering measures are proposed or under consideration?

Singapore

The provision of remittance services to shell FIs by money-changing or remittance business licensees is also prohibited (see paragraph 10.5 of MAS Notice 3001).

Singapore

Singapore is committed to continuously bolstering its AML framework. For example, MAS recently issued a Consultation Paper on 16 January 2018, inviting comments from stakeholders on proposed enhancements to AML requirements for the moneychanging and remittance business sector. Specifically, MAS proposes to: (a) issue a new notice that would prohibit issuance of bearer instruments and restrict cash pay-outs of S$20,000 and above (or such equivalent amount in foreign currency); and (b) amend MAS Notice 3001 to facilitate non-face-to-face business and better mitigate the money laundering risks of foreign exchange transactions. 4.2

Are there any significant ways in which the antimoney laundering regime of your country fails to meet the recommendations of the Financial Action Task Force (“FATF”)? What are the impediments to compliance?

No, in the last FATF review, Singapore was rated at least partially compliant for each of the FATF 40 Recommendations (see FATF and Asia/Pacific Group on Money Laundering’s (“APG”) Mutual Evaluation Report (September 2016), accessible at: http://www.fatfgafi.org/countries/s-t/singapore/documents/mer-singapore-2016. html). 4.3

Has your country’s anti-money laundering regime been subject to evaluation by an outside organisation, such as the FATF, regional FATFs, Counsel of Europe (Moneyval) or IMF? If so, when was the last review?

Yes, Singapore’s AML regime was subject to evaluation by FATF and APG in late 2015 (see question 4.2 above). 4.4

Please provide information for how to obtain relevant anti-money laundering laws, regulations, administrative decrees and guidance from the Internet. Are the materials publicly available in English?

Relevant materials (in English) on AML laws, regulations, administrative decisions, and guidance can be obtained from various websites, especially MAS’s website (http://www.mas.gov.sg), SPF’s website (http://www.police.gov.sg), and Singapore Statutes Online (http://sso.agc.gov.sg/).

Acknowledgment The authors would like to acknowledge the assistance of their colleagues Priya Gobal and Chan Min Jian in preparing this chapter.


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Singapore

Gary Low

Vikram Ranjan Ramasamy

Drew & Napier LLC 10 Collyer Quay 10th Floor Ocean Financial Centre Singapore 049315

Drew & Napier LLC 10 Collyer Quay 10th Floor Ocean Financial Centre Singapore 049315

Tel: +65 6531 2497 Email: [email protected] URL: www.drewnapier.com

Tel: +65 6531 2408 Email: [email protected] URL: www.drewnapier.com

Gary practises both civil and criminal litigation. He has an active civil/commercial practice and has acted in a wide variety of matters, including disputes in banking and finance, commercial disputes, arbitrations, directors’/shareholders’ disputes, minority oppression, tortious liability, property and contractual disputes. Additionally, he has also represented clients for commercial crimes, corruption and securities offences such as insider trading and market manipulation. He has also advised on anti-money laundering practices and been involved in investigations by various corporations into alleged wrongdoings of employees in relation to fraud, criminal breach of trust, cheating, breach of fiduciary duties and other misconduct. Gary is recommended by name in the most recent edition of the Asia Pacific Legal 500 (Dispute Resolution) and is listed in Who’s Who Legal (Business Crime Defence – Corporates).

Vikram has acted in a wide range of civil matters. He has advised and represented local and international clients at all levels of the Singapore Courts in respect of diverse corporate and commercial disputes relating to, among other things, commercial contracts, banking and finance, employment matters, engineering and construction projects, trusts, wills and probate, real estate matters, and tortious liability. He has also advised and acted for clients in a variety of criminal offences, including criminal breach of trust, corruption, cheating, and non-commercial crime. Vikram has also been engaged by various corporate entities to investigate and advise on alleged wrongdoings by employees and their potential criminal liability.

Drew & Napier has been providing exceptional legal service and representation to discerning clients since 1889. We are one of the largest law firms in Singapore. The calibre of our work is acknowledged internationally at the highest levels of government and industry, and marks us as Singapore’s world class law firm. Drew & Napier’s Criminal Practice comprises an exceptional team of specialists from across the firm’s practice groups including Banking & Corporate, Tax, Intellectual Property, and Dispute Resolution. We provide our clients with a single access point for representation on commercial, securities, and non-commercial crimes. Our lawyers have dealt with an extensive range of criminal matters and we have experience in regulatory, trial, and appeal processes. We are committed to providing support for our clients at every stage of the criminal justice process from investigations to prosecutions in court. Our clients include major corporations, listed companies, and individuals.

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