The Monetary Authority of Singapore (“MAS”) released a consultation paper on 9 July 2021 inviting the public to comment on proposals to impose new anti-money laundering and countering the financing of terrorism (“AML/CFT”) measures for financial institutions who conduct operations and business activities in precious stones, precious metals, precious products. MAS also provided an update to the existing AML/CFT Notice for financial institutions and Variable Capital Companies.
Under the current Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act and exemptions, financial institutions that deal in precious stones and metals are exempt from registration with Ministry of Law and the AML/CFT requirements. To ensure consistency in AML/CFT requirements across all financial institutions dealing in precious stones and metals, MAS proposes to issue a new AML/CFT Notice to apply to financial institutions’ precious stones and metal activities.
The proposed AML/CFT Notice will apply to all financial institutions that carry on the business of regulated dealings in precious stones and metals or those acting as an intermediary for regulated activities in those areas. Financial institutions are still expected to comply with their current AML/CFT notices that are applicable to them, with respect to their other financial activities.
The consultation paper also proposes to define the term “regulated dealing” to capture all precious stones and metals activities under the AML/CFT Notice and to align with the relevant act. The consultation requires financial institutions to perform customer due diligence when financial institutions establish account relationships with the customer, undertake relevant business transactions with a customer who has not established an account, has suspicions of money laundering or terrorism financing, or has doubt of the veracity or adequacy of the information provided by its customers.
MAS also seeks comments on proposed changes to the existing AML/CFT Notices to ensure that AML/CFT requirements for all financial institutions and Variable Capital Companies continue to be effective in mitigating and managing money laundering and terrorism financing risks. Amongst many changes, MAS seeks opinions on the following:
- Introduction of AML/CFT requirements relating to services and transactions involving digital payment tokens and digital tokens that are capital markets products in the respective financial institution
- Specific AML/CFT Notices that apply to banks, merchant banks, finance companies, credit card or charge card licensees and capital market services licence holders
- The requirement for non-payment services financial institutions such as the banks and capital market services licence holders to conduct customer due diligence from first dollar for occasional transactions involving digital tokens that are capital market products
- The requirement for non-payment services financial institutions such as banks and capital market services licence holders dealing in digital tokens that are capital market products to comply with value transfer requirements
- Assessing whether the customer may be a shell company and required to conduct enhanced due diligence
- Providing guidance to financial institutions and Variable Capital Companies on the types of customers deemed to be higher-risk shell companies.
How can Arguus Global assist?
At Argus Global, our team of consultants specialise in regulatory compliance for financial institutions. We can assist clients with the following:
- Drafting AML/CFT policies and procedures
- Performing gap analysis on current AML/CFT policies and procedures
- Providing advice on conducting customer due diligence and enhanced customer due diligence
- Performing AML/CFT screenings of customers.
Please reach out to us for an initial discussion at email@example.com.