US embassy cable - 05SINGAPORE2536

UNCLAS SINGAPORE 002536 
 
SIPDIS 
 
E.O. 12356: N/A 
TAGS: ECPS, EFIN, ETTC, ECON, EINV, ETRD, KTFN, SN 
SUBJECT: SINGAPORE TIGHTENS REGULATIONS FOR MONEY CHANGING 
AND REMITTANCE BUSINESSES 
 
REFS:  A) 04 SINGAPORE 3540 B) SINGAPORE 2155 C) SINGAPORE 
 
1706 
 
1.  Singapore's parliament on August 15 approved changes to 
the Money-Changing and Remittance Business Act, last amended 
in 2002, designed to strengthen the government's ability to 
combat money laundering and terrorist finance-related 
activities in the money-changing and remittance sector.  The 
revised law is expected to come into effect by the end of 
the year. 
 
2.  Under the new law: 
 
-- Licensees must incorporate as companies with minimum paid- 
up capital of S$100,000 (US$60,000).  Currently, many of 
Singapore's more than 100 licensees operate as sole 
proprietorships or family-run partnerships. 
 
-- The maximum penalty for operating an unlicensed money- 
changing or remittance business will be increased from 
S$50,000 (US$30,000) to S$100,000 (US$60,000). 
 
-- Inward remittances will be subject to anti-money 
laundering (AML) and countering the financing of terrorism 
(CFT) regulations as currently is the case for outward 
remittances. 
 
-- Officers, managers and license holders will be held 
personally liable for losses incurred in cases where a court 
finds that they have engaged in fraudulent business 
activities. 
 
-- The Monetary Authority of Singapore (MAS), which 
regulates the country's financial institutions, must approve 
the appointments of directors, partners and substantial 
shareholders. 
 
-- MAS will publicly disclose any disciplinary actions taken 
against licensees. 
 
3.  As noted Ref A, alternative remittance systems are used 
primarily by Singapore's approximately 500,000 foreign guest 
workers.  All remittance agents, formal or informal, must be 
licensed and are subject to the same type of laws and 
regulations as banks and other financial institutions, 
including requirements for record keeping and the filing of 
suspicious transaction reports.  Firms must submit a 
financial statement every three months, and report the 
largest amount transmitted on a single day. 
 
4.  As part of its efforts to map out legal and regulatory 
changes to implement the Financial Action Task Force's 
(FATF) 40 AML Recommendations and Special 9 CFT 
Recommendations, Singapore plans to issue new and revised 
regulations for banks and other financial institutions by 
the end of this year, and for designated non-financial 
businesses and professions after that (Ref B).  FATF is an 
intergovernmental body whose purpose is the development of 
international and national policies to combat money 
laundering and terrorist financing. 
 
LAVIN