‘Business relations’ means:
i) The opening or maintenance of an account by the bank in the name of; or
ii) The provision of financial advice by the bank to a person (whether a natural person, legal person or legal arrangement).

A bank shall perform the measures as required in paragraphs under Customer Due Diligence (CDD) when:
i) The bank establishes business relations with any customer.
ii) The bank undertakes any transaction of a value exceeding S$20,000 for any customer who has not otherwise established business relations with the bank.

Integration is defined as the provision of apparent legitimacy to the benefits derived from criminal conduct. If the layering process succeeds, the integration schemes place the laundered funds back into the economy so that they reenter the financial system appearing to be legitimate funds.

If the customer is a legal person or legal arrangement, the bank shall identify the connected parties of the customer, by obtaining at least the following information of each connected party:
i) Full name, including any aliases; and
ii) Unique identification number (such as an identity card number, birth certificate number or passport number of the connected party).

A bank shall verify the due authority of each natural person appointed to act on behalf of the customer by obtaining at least the following:
i) The appropriate documentary evidence authorising the appointment of such natural person by the customer to act on his or its behalf.
ii) The specimen signature of such natural person appointed.

A bank shall not perform simplified CDD measures:
i) Where a customer or any beneficial owner of the customer is from or in a country or jurisdiction in relation to which the FATF has called for countermeasures.
ii) Where a customer or any beneficial owner of the customer is from or in a country or jurisdiction known to have inadequate AML/CFT measures, as determined by the bank for itself or notified to banks generally by the Authority, or other foreign regulatory authorities.
iii) Where the bank suspects that money laundering or terrorism financing is involved.

The third line of defence is an insurer’s internal audit function, which plays a key role in independently evaluating the insurer’s AML/CFT risk management framework and controls. This independent assessment is achieved through internal audits (or an equivalent function’s periodic evaluations) of the insurer’s compliance with AML/CFT laws and regulations, as well as policies, procedures and controls.

‘Foreign politically exposed person’ means a natural person who is or has been entrusted with prominent public functions in a foreign country and ‘international organisation politically exposed person’ means a natural person who is or has been entrusted with prominent public functions in an international organization.

In a cross-border wire transfer where the amount to be transferred is below or equal to S$1,500, every bank which is an ordering institution shall include in the message or payment instruction that accompanies or relates to the wire transfer the following:
i) The name of the wire transfer originator.
ii) The wire transfer originator’s account number (or unique transaction reference number where no account number exists).
iii) The name of the wire transfer beneficiary.
iv) The wire transfer beneficiary’s account number (or unique transaction reference number where no account number exists).

‘Connected party’ means:
i) In relation to a legal person (other than a partnership), means any director or any natural person having executive authority in the legal person.
ii) In relation to a legal person that is a partnership, means any partner or manager.
iii) In relation to a legal arrangement, means any natural person having executive authority in the legal arrangement.

The second line of defence includes support functions such as operations, human resource or technology that work together with the compliance function to identify ML/TF risks.

In addition, targeted financial sanctions (“TFS”) relate to specific sanctions imposed in relation to both asset freezing and prohibitions to prevent funds or other assets from being made available, directly or indirectly, for the benefit of designated persons and entities. TFS includes the following components:
i) Sanctions relating to TF (i.e. the lists indicated under the First Schedule of the TSOFA and any other lists or information provided by the Monetary Authority of Singapore (“the Authority”) or other relevant authorities in Singapore regarding sanctions relating to TF).
ii) Sanctions relating to PF that make reference to resolutions effected by the United Nations Security Council (‘UNSC’).
iii) Sanctions relating to resolutions effected by the UNSC on undesirable persons.

‘Legal person’ means an entity other than a natural person that can establish a permanent customer relationship with a financial institution or otherwise own property. ‘Financial group’ means a group that consists of a legal person or legal arrangement exercising control and coordinating functions over the rest of the group for the application of group supervision under the Core Principles, and its branches and subsidiaries that are financial institutions as defined in section 27A(6) of the MAS Act or the equivalent financial institutions outside Singapore.

An insurer should establish policies for periodic AML/CFT internal audits, covering areas such as –
i) Adequacy of the insurer’s AML/CFT policies, procedures and controls in identifying ML/TF risks, addressing the identified risks and complying with laws, regulations and notices.
ii) Effectiveness of the insurer’s officers, employees and agents in implementing the insurer’s policies, procedures and controls.
iii) Effectiveness of the compliance oversight and quality control including parameters and criteria for transaction alerts.
iv) Adequacy and effectiveness of the insurer’s AML/CFT training of relevant officers, employees and agents.

The results of these assessments should be reported to either the Audit or Risk Committee of the insurer or a similar body of oversight, on a regular basis. Significant AML/CFT issues should be escalated to the Board. Any deficiencies identified should be promptly addressed to mitigate risks, including legal and reputational risks, to the insurer.

Where there is one or more beneficial owner in relation to a customer, the bank shall identify the beneficial owners and take reasonable measures to verify the identities of the beneficial owners using the relevant information or data obtained from reliable, independent sources. The bank shall take these measures for customers that are legal persons:
(i) Identify the natural persons (whether acting alone or together) who ultimately own the legal person.
(ii) To the extent that there is doubt under subparagraph (i) as to whether the natural persons who ultimately own the legal person are the beneficial owners or where no natural persons ultimately own the legal person, identify the natural persons (if any) who ultimately control the legal person or have ultimate effective control of the legal person.
(iii) Where no natural persons are identified under subparagraph (i) or (ii), identify the natural persons having executive authority in the legal person, or in equivalent or similar positions.

‘Cover payment’ means a wire transfer that combines a payment message sent directly by the ordering institution to the beneficiary institution with the routing of the funding instruction from the ordering institution to the beneficiary institution through one or more intermediary institutions.

A bank may establish business relations with a customer before completing the verification of the identity of the customer, natural persons appointed to act on behalf of the customer and beneficial owners of the customer if:
i) The deferral of completion of the verification is essential in order not to interrupt the normal conduct of business operations.
ii) The risks of money laundering and terrorism financing can be effectively managed by the bank.

Screening of customers should be carried out against relevant ML/TF information sources, which include designated names of individuals and/or entities within:
i) The lists and information provided by the Authority or other relevant authorities in Singapore in relation to ML/TF risks.
ii) The First Schedule of the TSOFA.
iii) The MAS TFS Regulations.

A bank shall screen a customer, natural persons appointed to act on behalf of the customer, connected parties of the customer and beneficial owners of the customer against relevant money laundering and terrorism financing information sources, as well as lists and information provided by the Authority or other relevant authorities in Singapore for the purposes of determining if there are any money laundering or terrorism financing risks in relation to the customer when:
i) When or as soon as reasonably practicable after, the bank establishes business relations with a customer.
ii) The bank undertakes any transaction of a value exceeding S$20,000 for any customer who has not otherwise established business relations with the bank.
iii) The bank effects or receives any funds by domestic wire transfer, or by cross-border wire transfer that exceeds S$1,500, for a customer who has not otherwise established business relations with the bank.
iv) On a periodic basis after the bank establishes business relations with the customer.
v) When there are any changes or updates to the lists and information provided by the Authority or other relevant authorities in Singapore to the bank or the natural persons appointed to act on behalf of a customer, connected parties of a customer or beneficial owners of a customer.

A bank shall take all appropriate steps to ensure that its employees and officers (whether in Singapore or elsewhere) are regularly and appropriately trained on:
i) AML/CFT laws and regulations, and in particular, CDD measures, detecting and reporting of suspicious transactions.
ii) Prevailing techniques, methods and trends in money laundering and terrorism financing.
iii) The bank’s internal policies, procedures and controls on AML/CFT and the roles and responsibilities of employees and officers in combating money laundering and terrorism financing.

The bank shall ensure that its group policy on AML/CFT is strictly observed by the management of that branch or subsidiary when a bank has a branch or subsidiary in a host country or jurisdiction:
i) In relation to which the FATF has called for countermeasures.
ii) Known to have inadequate AML/CFT measures, as determined by the bank for itself, notified to banks generally by the Authority or other foreign regulatory authorities.

Given that most direct general insurance and reinsurance policies are relatively short-term in nature (e.g. 1 year), the insurer should conduct such ongoing screening minimally at a frequency of once every 6 months, or upon the occurrence of a trigger event as deemed necessary by the insurer, whichever is earlier. Higher risk customers should be subject to screening at a higher frequency.

A bank shall, for the purposes of record retention and when setting its record retention policies, comply with the following record retention periods:
i) For CDD information relating to the business relations, wire transfers and transactions undertaken without an account being opened, as well as account files, business correspondence and results of any analysis undertaken, a period of at least 5 years following the termination of such business relations or completion of such wire transfers or transactions.
ii) For data, documents and information relating to a transaction, including any information needed to explain and reconstruct the transaction, a period of at least 5 years following the completion of the transaction.

A bank shall perform the measures as required by the paragraphs stated under Customer Due Diligence (CDD) when:
i) The bank establishes business relations with any customer.
ii) The bank effects or receives any funds by domestic wire transfer, or by cross border wire transfer that exceeds S$1,500, for any customer who has not otherwise established business relations with the bank.
iii) There is a suspicion of money laundering or terrorism financing, notwithstanding that the bank would not otherwise be required by this Notice to perform the measures as required.
iv) The bank has doubts about the veracity or adequacy of any information previously obtained.

In terms of determining and assessing suspicious activity exhibited by customers, examples of suspicious circumstances that may warrant the filing of an STR may include the following:
i) Where the customer is reluctant, unable or unwilling to provide any information requested by the insurer.
ii) Where the customer, without reasonable grounds, decides to withdraw a pending application to establish business relations with the insurer.
iii) Where the customer, without reasonable grounds, decides to suddenly terminate existing business relations with the insurer.
iv) Abnormal settlement instructions, including payment to apparently unconnected parties.
v)Frequent changes to the customer’s address or to authorised signatories.

A bank shall not be required to inquire if there exists any beneficial owner in relation to a customer that is:
i) An entity listed on the Singapore Exchange.
ii) An entity listed on a stock exchange outside of Singapore that is subject to:
– Regulatory disclosure requirements; and
– Requirements relating to adequate transparency in respect of its beneficial owners (imposed through stock exchange rules, law or other enforceable means).

When there are any reasonable grounds for suspicion that existing business relations with a customer are connected with money laundering or terrorism financing, and when the bank considers it appropriate to retain the customer:
i) The bank shall substantiate and document the reasons for retaining the customer.
ii) The customer’s business relations with the bank shall be subject to commensurate risk mitigation measures, including enhanced ongoing monitoring.

An STR should be filed within 15 business days of the case being referred by the relevant officer, employee or agent, if the insurer has assessed that the matter should be referred to the STRO unless the circumstances are exceptional or extraordinary. The decision as to whether to refer the matter to the STRO should be regardless of the amount of the transaction, if any.

‘Shell financial institution’ means a bank or financial institution incorporated, formed or established in a country or jurisdiction where the bank or financial institution has no physical presence and which is unaffiliated with a financial group that is subject to effective consolidated supervision.

Insurers should also have in place screening procedures when hiring employees, officers and agents, and when establishing business relationships with offshore intermediaries. This should include, where applicable:
i) Background checks with past employers.
ii) Credit history checks.
iii) Screening against ML/TF information sources.
iv) Bankruptcy searches.