“International organisation” means an entity established by formal political agreements between member countries that have the status of international treaties, whose existence is recognised by law in member countries and which is not treated as a resident institutional unit of the country in which it is located;

“Prominent public functions” includes the roles held by a head of state, a head of government, government ministers, senior civil or public servants,senior judicial or military officials, senior executives of state owned corporations, senior political party officials, members of the legislature and senior management of international organisations.

A financial adviser may rely on a third party to perform the measures if the following requirements are met:
(a) the financial adviser is satisfied that the third party it intends to rely upon is subject to and supervised for compliance with AML/CFT requirements consistent with standards set by the FATF, and has adequate AML/CFT measures in place to comply with those requirements;
(b) the financial adviser takes appropriate steps to identify, assess and understand the money laundering and terrorism financing risks particular to the countries or jurisdictions that the third party operates in;
(c) the third party is not one which financial advisers have been specifically precluded by the Authority from relying upon; and
(d) the third party is able and willing to provide, without delay, upon the financial adviser’s request, any data, documents or information obtained by the third party

A financial adviser shall perform the measures as required by the paragraph above such that:
(a) all requirements imposed by law (including Notice No: FAA-N06) are met;
(b) any individual transaction undertaken by the financial adviser can be reconstructed (including the amount and type of currency involved) so as to provide, if necessary, evidence for prosecution of criminal activity;
(c) the Authority or other relevant authorities in Singapore and the internal and external auditors of the financial adviser are able to review the financial adviser’s business relations, transactions, records and CDD information and assess the level of compliance with Notice No: FAA-N06; and
(d) the financial adviser can satisfy, within a reasonable time or any more specific time period imposed by law or by the requesting authority, any enquiry or order from the relevant authorities in Singapore for information.

A financial adviser shall not be required to provide an individual customer, an individual beneficiary of a life insurance policy, an individual appointed to act on behalf of a customer, an individual connected party of a customer or an individual beneficial owner of a customer, with:
(a) any access to personal data about the individual that is in the possession or under the control of the financial adviser.

A financial adviser shall, as soon as reasonably practicable, upon the request of an individual customer, an individual appointed to act on behalf of a customer, an individual connected party of a customer or an individual beneficial owner of a customer, provide the requesting individual with the right to:
(a) access the following types of personal data of that individual, that is in the possession or under the control of the financial adviser:
(i) his full name, including any alias;
(ii) his unique identification number (such as an identity card number, birth certificate number or passport number);
(iii) his residential address;
(iv) his date of birth
(v) his nationality

For the purposes of complying with Notice No: FAA-N06, a financial adviser may, whether directly or through a third party, collect, use and disclose personal data of an individual customer, an individual beneficiary of a life insurance policy, an individual appointed to act on behalf of a customer, an individual connected party of a customer or an individual beneficial owner of a customer, without the respective individual’s consent.

A financial adviser shall ensure that the AML/CFT compliance officer, as well as any other persons appointed to assist him, is suitably qualified and, has adequate resources and timely access to all customer records and other relevant information which he requires to discharge his functions.

A financial adviser shall maintain an audit function that is adequately resourced and independent, and that is able to regularly assess the effectiveness of the financial adviser’s internal policies, procedures and controls, and its compliance with regulatory requirements.

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

the process of ML comprises three stages, namely:
(a) Placement – The physical or financial disposal of the benefits derived from criminal conduct.
(b) Layering – The separation of these benefits from their original source by creating layers of financial transactions designed to disguise the ultimate source and transfer of these benefits.
(c) Integration – The provision of apparent legitimacy to the benefits derived from criminal conduct.

Singapore’s primary legislation to combat TF is the TSOFA. Financial advisers may refer to the Inter-Ministry Committee on Terrorist Designation’s (“IMC-TD”) website for more information.

As part of the first line of defence, business units require robust controls to detect illicit activities. They should be allocated sufficient resources to perform this function effectively. The financial adviser’s policies, procedures and controls on AML/CFT should be clearly specified in writing, and communicated to all relevant employees, officers and representatives in the business units. The financial adviser should adequately train employees, officers and representatives to be aware of their obligations, and provide instructions as well as guidance on how to ensure the financial adviser’s compliance with prevailing AML/CFT laws, regulations and notices.

A financial adviser’s board of directors and senior management should understand the ML/TF risks the financial adviser is exposed to and how the financial adviser’s AML/CFT control framework operates to mitigate those risks. This should involve the board and senior management:
(a) receiving sufficient, frequent and objective information to form an accurate picture of the ML/TF risks.
(b) receiving sufficient and objective information to assess whether the financial adviser’s AML/CFT controls are adequate and effective.
(c) receiving information on legal and regulatory developments and the impact these have on the financial adviser’s AML/CFT framework; and
(d) ensuring that processes are in place to escalate important decisions that directly impact the ability of the financial adviser to address and control ML/TF risks.

In relation to the definition of “legal person” in the Notice, examples of legal persons are companies, bodies corporate, foundations, anstalt, partnerships, joint ventures or associations.

In conducting an enterprise-wide risk assessment, the broad ML/TF risk factors that the financial adviser should consider include:
(a) in relation to its customers:
(i) the target customer markets and segments;
(ii) the profile and number of customers identified as higher risk; and
(iii) the volumes and sizes of its customers’ transactions and funds transfers, considering the usual activities and the risk profiles of its customers;

A financial adviser should assess the effectiveness of its risk mitigation procedures and controls by monitoring the following:
(a) the financial adviser’s ability to identify changes in a customer profile (e.g. Politically Exposed Persons status) and transactional behaviour observed in the course of its business;
(b) the potential for abuse of new business initiatives, products, practices and services for ML/TF purposes;
(c) the compliance arrangements (through its internal audit or quality assurance processes or external review);
(d) the balance between the use of technology-based or automated solutions with that of manual or people-based processes, for AML/CFT risk management purposes.

Examples of trigger events are when
(i) a significant transaction takes place,
(ii) a material change occurs in the way the customer’s business relations are managed,
(iii) the financial adviser’s policies, procedures or standards relating to the documentation of CDD information change substantially,
(iv) the financial adviser becomes aware that it lacks sufficient information about the customer concerned.

A financial adviser should note that applications and transactions undertaken across the internet may pose greater risks than other non-face-to- face business due to the following factors:
(a) the ease of unauthorised access to the facility, across time zones and location;
(b) the ease of making multiple fictitious applications without incurring extra cost or the risk of detection;
(c) the absence of physical documents; and
(d) the speed of electronic transactions,

Where verification of identity is performed without face-to-face contact (e.g. electronically), a financial adviser should apply additional checks to manage the risk of impersonation.The additional checks may consist of robust anti-fraud checks that the financial adviser routinely undertakes as part of its existing procedures, which may include:
(a) telephone contact with the customer at a residential or business number that can be verified independently;
(b) confirmation of the customer’s address through an exchange of correspondence or other appropriate method;
(d) confirmation of the customer’s salary details by requiring the presentation of recent bank statements, where applicable;
(e) provision of certified identification documents by lawyers or notaries public.

The completion of verification should not exceed 30 business days after the establishment of business relations;

The financial adviser should terminate business relations with the customer if such verification remains uncompleted 120 business day after the establishment of business relations.

The level of automation used in the screening process should take into account the nature, size and risk profile of a financial adviser’s business. A financial adviser should be aware of any shortcomings in its automated screening systems. In particular, it is important to consider “fuzzy matching” to identify non- exact matches. The financial adviser should ensure that the fuzzy matching process is calibrated to the risk profile of its business.

Where a financial adviser is satisfied that the risks of money laundering and terrorism financing are low, a financial adviser may perform SCDD measures. Examples of possible SCDD measures include:
(a) reducing the frequency of updates of customer identification information;
(b) reducing the degree of ongoing monitoring and scrutiny of transactions, based on a reasonable monetary threshold; and
(c) choosing another method to understand the purpose and intended nature of business relations by inferring this from the type of transactions.

Subject to the requirement that a financial adviser’s assessment of low ML/TF risks is supported by an adequate analysis of risks, examples of potentially lower ML/TF risk situations include:
(a) Customer risk
(i) a Singapore Government entity;
(ii) entities listed on a stock exchange and subject to regulatory disclosure requirements relating to adequate transparency in respect of beneficial owners (imposed through stock exchange rules, law or other enforceable means); and
(iii) an FI incorporated or established outside Singapore that is subject to and supervised for compliance with AML/CFT requirements
(iv) a pension, superannuation or similar scheme that provides retirement benefits to employees

Examples of potentially higher risk categories of the Notice include:
(a) Customer risk
(i) customers from higher risk businesses / activities / sectors identified in Singapore’s NRA
(ii) the ownership structure of the legal person or arrangement appears unusual or excessively complex
(iii) legal persons or legal arrangements that are personal asset holding vehicles.

In the context of Singapore, domestic PEPs should include at least all Government Ministers, Members of Parliament, Nominated Members of Parliament and Non-Constituency Members of Parliament.

Examples of an “international organisation” include the United Nations and affiliated agencies such as the International Maritime organisation and the International Monetary Fund; regional international organisations such as the Asian Development Bank, Association of Southeast Asian Nations Secretariat, institutions of the European Union, the Organisation for Security and Cooperation in Europe; military international organisations such as the North Atlantic Treaty Organisation; and economic organisations such as the World Trade Organisation or the Asia-Pacific Economic Cooperation Secretariat.

Source of wealth generally refers to the origin of the customer’s and beneficial owner’s entire body of wealth (i.e. total assets). This relates to how the customer and beneficial owner have acquired the wealth which is distinct from identifying the assets that they own. Source of wealth information should give an indication about the size of wealth the customer and beneficial owner would be expected to have, and how the customer and beneficial owner acquired the wealth. Although the financial adviser may not have specific information about assets that are not processed by the financial adviser, it may be possible to obtain general information from the customer, commercial databases or other open sources.

Examples of appropriate and reasonable means of establishing source of wealth are information and documents such as evidence of title, copies of trust deeds, audited accounts, salary details, tax returns and bank statements.