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mer-ratings-key-findings

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Mutual Evaluation - Ratings and Key findings

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mer-ratings-key-findings

  1. 1. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 1 Anti-money laundering and counter- terrorist financing (AML/CFT) measures in Singapore Fourth Round Mutual Evaluation Key findings, ratings and priority actions September 2016 www.fatf-gafi.org/publications/mutualevaluations/documents/mer-Singapore-2016.html
  2. 2. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 Ratings – Effectiveness (1/3) 2 Immediate outcome of an effective system to combat money laundering (ML) and terrorist financing (TF) Extent to which Singapore has achieved this objective 1. ML and TF risks are understood and, where appropriate, actions co-ordinated domestically to combat ML and TF Substantial 2. International co-operation delivers appropriate information, financial intelligence, and evidence, and facilitates action against criminals and their assets Substantial 3. Supervisors appropriately supervise, monitor and regulate financial institutions and designated non-financial businesses and professions (DNFBPs) for compliance with AML/CFT requirements commensurate with their risks. Moderate 4. Financial institutions and DNFBPs adequately apply AML/CFT preventive measures commensurate with their risks, and report suspicious transactions. Moderate
  3. 3. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 3 Immediate outcome of an effective system to combat money laundering (ML) and terrorist financing (TF) Extent to which Singapore has achieved this objective 5. Legal persons and arrangements are prevented from misuse for money laundering or terrorist financing, and information on their beneficial ownership is available to competent authorities without impediments Moderate 6. Financial intelligence and all other relevant information are appropriately used by competent authorities for money laundering and terrorist financing investigations. Substantial 7. Money laundering offences and activities are investigated and offenders are prosecuted and subject to effective, proportionate and dissuasive sanctions Moderate 8. Proceeds and instrumentalities of crime are confiscated. Moderate Ratings – Effectiveness (2/3)
  4. 4. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 4 Immediate outcome of an effective system to combat money laundering (ML) and terrorist financing (TF) Extent to which Singapore has achieved this objective 9. Terrorist financing offences and activities are investigated and persons who finance terrorism are prosecuted and subject to effective, proportionate and dissuasive sanctions. Low 10. Terrorists, terrorist organisations and terrorist financiers are prevented from raising, moving and using funds, and from abusing the non-profit sector. Moderate 11. Persons and entities involved in the proliferation of weapons of mass destruction are prevented from raising, moving and using funds, consistent with the relevant United Nations Security Council Resolutions. Substantial Ratings – Effectiveness (3/3)
  5. 5. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 5 Ratings – Effectiveness 14-Sep-2016 0 4 6 1 High Substantial Moderate Low
  6. 6. 26-Sep-16 6 Ratings – technical compliance (1/5) AML/CFT POLICIES AND COORDINATION 1. Assessing risks & applying a risk-based approach LarLarLarLar Largely compliant 2. National cooperation and coordination ComCo ComCo Compliant MONEY LAUNDERING AND CONFISCATION 3. Money laundering offence LarLarLarLar Largely compliant 4. Confiscation and provisional measures ComCo ComCo Compliant TERRORIST FINANCING AND FINANCING OF PROLIFERATION 5. Terrorist financing offence LarLarLarLar Largely compliant 6. Targeted financial sanctions related to terrorism & terrorist financing LarLarLarLar Largely compliant 7. Targeted financial sanctions related to proliferation LarLarLarLar Largely compliant 8. Non-profit organisations LarLarLarLar Largely compliant
  7. 7. 26-Sep-16 7 Ratings – technical compliance (2/5) PREVENTIVE MEASURES 9. Financial institution secrecy laws Co ComComCom Compliant Customer due diligence and record keeping 10. Customer due diligence Co ComComCom Compliant 11. Record keeping Co ComComCom Compliant Additional measures for specific customers and activities 12. Politically exposed persons Co ComComCom Compliant 13. Correspondent banking Co ComComCom Compliant 14. Money or value transfer services LarLarLarLar Largely compliant 15. New technologies Co ComComCom Compliant 16. Wire transfers Co ComComCom Compliant
  8. 8. 26-Sep-16 8 Ratings – technical compliance (3/5) PREVENTIVE MEASURES (continued) Reliance, Controls and Financial Groups 17. Reliance on third parties Co Co Co Com Compliant 18. Internal controls and foreign branches and subsidiaries Co Co Co Com Compliant 19. Higher-risk countries LarLarLarLar Largely compliant Reporting of suspicious transactions 20. Reporting of suspicious transactions LarLarLarLar Largely compliant 21. Tipping-off and confidentiality Co Co Co Com Compliant Designated non-financial Businesses and Professions (DNFBPs) 22. DNFBPs: Customer due diligence Pa Pa Pa Par Partially compliant 23. DNFBPs: Other measures Pa Pa ParPar Partially compliant
  9. 9. 26-Sep-16 9 Ratings – technical compliance (4/5) TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL PERSONS AND ARRANGEMENTS 24. Transparency and beneficial ownership of legal persons Pa Pa ParPa Partially compliant 25. Transparency and beneficial ownership of legal arrangements ParPa ParPa Partially compliant POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES AND OTHER INSTITUTIONAL MEASURES Regulation and Supervision 26. Regulation and supervision of financial institutions LarLarLarLar Largely compliant 27. Powers of supervisors ComCo ComCo Compliant 28. Regulation and supervision of DNFBPs ParPa ParPa Partially compliant Operational and Law Enforcement 29. Financial intelligence units ComCo ComCo Compliant 30. Responsibilities of law enforcement and investigative authorities Co Co ComCo Compliant 31. Powers of law enforcement and investigative authorities ComCo ComCo Compliant 32. Cash couriers ComCo ComCo Compliant
  10. 10. 26-Sep-16 10 Ratings – technical compliance (5/5) POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES AND OTHER INSTITUTIONAL MEASURES (continued) General Requirements 33. Statistics LarLarLarLar Largely compliant 34. Guidance and feedback LarLarLarLar Largely compliant Sanctions 35. Sanctions ParParParPar Partially compliant INTERNATIONAL COOPERATION 36. International instruments ComComComCom Compliant 37. Mutual legal assistance LarLarLarLar Largely compliant 38. Mutual legal assistance: freezing and confiscation LarLarLarLar Largely compliant 39. Extradition LarLarLarLar Largely compliant 40. Other forms of international cooperation LarLarLarLar Largely compliant
  11. 11. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 11 Ratings – technical compliance 14-Sep-2016 18 16 6 0 Compliant Largely compliant Partially compliant Non compliant
  12. 12. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 Key findings  Singapore’s AML/CFT coordination is highly sophisticated and inclusive of all relevant competent authorities. Driven by the AML/CFT Steering Committee and the Inter- Agency Committee, the coordination mechanism in Singapore is a very valuable tool in AML/CFT policy development. This proved to be true in the development of the National Risk Assessment (NRA) and the cooperation and organisation associated with this mutual evaluation exercise. Singapore has a strong focus on law and order and enforcement, which often result in dissuasive penalties. 1214-Sep-2016
  13. 13. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 Key findings  Singapore has a reasonable understanding of its ML risks and has taken steps to mitigate them. Nevertheless, moderate gaps remain. In particular the nexus between transnational threats, the inherent risks faced by Singapore as one of the world’s largest financial centres, and vulnerabilities within the system is not sufficiently reflected in Singapore’s NRA. 14-Sep-2016 13
  14. 14. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 Key findings  Singapore’s ability to proactively identify and address serious foreign predicate ML, and transnational ML networks will be strengthened with moderate improvements in Singapore’s understanding of its foreign predicate ML risks. Singapore provided information that it was pursuing some complex cases involving transnational fraud and corruption. However, Singapore has prosecuted few foreign predicate ML cases outside of wire transfer frauds involving money mules/shell companies, and has confiscated low amounts of proceeds of crime. Singapore has demonstrated that it has a general understanding of its TF risks. But the weighting placed in the risk methodology on indicators derived from reported incidences in Singapore has somewhat hindered Singapore’s ability to appreciate the inherent TF risks associated to its geographical location and its status as a global financial centre. 1414-Sep-2016
  15. 15. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 Key findings  Singapore’s FIU, the Suspicious Transactions Reporting Office (STRO), uses well-functioning systems and coordination mechanisms to integrate FIU information into LEA processes. Singapore’s primary investigative agencies routinely make significant use of STRs at early stages of ML and predicate investigations. While financial intelligence information is provided to other agencies, they are yet to make significant use of such information to support investigation. STRs relating to TF, while routinely disclosed to the Internal Security Department (ISD), have not resulted in any criminal investigations. 1514-Sep-2016
  16. 16. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 Key findings  Singapore’s FIs generally demonstrated a reasonably good understanding of ML risks impacting Singapore domestic clients, but a less developed understanding of the risk of illicit flows into and out of Singapore. FIs and especially DNFBPs had a less mature understanding of TF risks, and often failed to distinguish between terrorism and TF risks. Overall, there is a significant difference in the level of understanding of the ML/TF risks between the financial sector and DNFBP sector, therefore limiting DNFBPs’ ability to develop a comprehensive risk understanding. 1614-Sep-2016
  17. 17. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 Key findings  For most FIs, AML/CFT supervision appears robust, with a variety of off-site factors examined and comprehensive on-site examinations/follow-up being conducted. Singapore has recently extended AML/CFT supervision to most types of DNFBPs, but there are significant differences in effective supervision of AML/CFT requirements between relevant supervisory bodies. While Singapore has a range of remedial measures that it can impose on FIs, the financial penalty structure across the DNFBP sector is quite diverse and concerns exist about the differences in approach in terms of dissuasiveness and proportionality. Apart from the casino and TSP sectors, sanctions for non-compliance by DNFBPs have not been tested. 1714-Sep-2016
  18. 18. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016  Singapore has not undertaken an adequate ML/TF risk assessment of all forms of legal persons and legal arrangements. Authorities however acknowledge that legal persons and arrangements created in Singapore, and those registered or operating in Singapore from foreign jurisdictions, can be used to facilitate predicate crimes and ML/TF offences. Singapore has implemented some preventive measures designed to prevent the misuse of legal persons and arrangements for ML and TF, including the collection of beneficial ownership information by FIs and DNFBPs. However, in practice, some DNFPBs do face challenges in obtaining beneficial ownership information. 14-Sep-2016 18 Key findings
  19. 19. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016  On international cooperation, Singapore provides constructive and high quality information and assistance when requested, but faced occasional challenges executing some MLA requests in a timely manner. Although few outgoing MLA requests were made prior to 2015, Singapore has taken steps to increase outgoing MLA requests in 2015, more than doubling the entire number of MLA requests in the previous 3 years. Singapore also uses informal channels and the LEAs, FIU and financial supervisors are generally well engaged in making and receiving requests where permitted. Singapore shares domestically available beneficial ownership information for legal persons and legal arrangements, however there is limited information available under the domestic framework. 14-Sep-2016 19 Key findings
  20. 20. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 Priority Actions for Singapore to strengthen its AML/CFT System  Singapore should conduct comprehensive ML and TF risk assessments for all types of legal persons (private companies, public companies, foreign companies, etc.) to identify where the risks are and develop policy to address those risks.  Singapore should ensure effective supervision for AML/CFT across all categories of DNFBPs through risk- based, targeted and prioritised outreach to and inspections of the non-financial professions, and extend AML/CFT supervision to all PSMDs. Singapore should also increase the level of communication and information sharing by competent authorities and SRBs to ensure a better understanding of the ML/TF risks by the DNFBP sector. 2014-Sep-2016
  21. 21. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 Priority Actions for Singapore to strengthen its AML/CFT System  Financial sector supervisors should continue dialogue with the FIs to promote a better understanding of ML and TF risks, and more closely target supervisory activity to ML/TF risks.  Singapore should take steps to improve the capability of its LEAs to proactively identify and investigate ML, particularly complex and foreign predicate ML. Singapore should pursue more offenders involved in the laundering of foreign proceeds of crime in addition to the current focus on pursuing money mules and shell companies. 2114-Sep-2016
  22. 22. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 Priority Actions for Singapore to strengthen its AML/CFT System  LEAs should more proactively pursue the confiscation of proceeds of crime and make greater use of the seizure and confiscation powers in the Corruption, Drug Trafficking and other Serious Crimes (Confiscation of Benefits) Act (CDSA) to pursue proceeds of crime that are not directly linked to offences being prosecuted.  The next round of Singapore’s NRA should better articulate the nexus between key threats and vulnerabilities to promote a deeper understanding of how the ML/TF risks faced by Singapore will materialise in Singapore’s context. In particular, this analysis should take into consideration Singapore’s geographic location and role in the international economy, and deal more specifically with the ML threats to the financial sector in the context of Singapore’s position as a financial centre. 2214-Sep-2016
  23. 23. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016  Singapore should conduct a comprehensive sector review to better understand the types of organisations within the NPO sector that are inherently vulnerable to TF abuse and continue outreach to NPOs to raise awareness of specific TF abuse risks.  Singapore should continue to use MLA to follow and restrain assets that have moved to other jurisdictions, and to pursue the people involved and improve response times in responding to foreign requests.  Given Singapore’s status as a global trade, finance and transportation hub, the FIU should seek to obtain additional strategic information sources, such as international electronic fund transfer reports and trade data, to complement existing reports that provide insight into international ML/TF threats.14-Sep-2016 23 Priority Actions for Singapore to strengthen its AML/CFT System

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