MAS Consultation Paper on Proposed AML/CFT Amendments for Financial Institutions and Variable Capital Companies

The Monetary Authority of Singapore (MAS) has released a consultation paper regarding “proposed amendments to the Anti-Money Laundering and Countering the Financing of Terrorism AML/CFT notices and guidelines” to enhance AML/CFT efforts in Singapore.

This paper has proposed modifications for “Financial Institutions (FIs) and Variable Capital Companies (VCCs).” These changes aim to align Singapore’s AML/CFT regulatory regime with the updated international standards set by FATF.

It addresses the rapidly growing financial risks due to illicit activities like money laundering (ML), terrorism financing (TF), and proliferation financing (PF).

Singapore will be highly affected by these new proposed amendments, including financial sectors like “banks, payment service providers, digital token service providers, and capital market intermediaries.”

MAS welcomes the suggestions as feedback on these “proposed amendments” till 8 May 2025, and for this, it has invited all “regulated, authorized, registered,  and licensed entities”.

The expected data for implementing these amendments is decided on 30 June 2025.

The Proposed Amendments Of the Consultation Paper

The consultation paper covers many important amendments, which are explained below:

Inclusion of PF risk assessments in ML/TF risk assessments

Per the updated FATF standards, “financial institutions and designated non-financial businesses” must identify and evaluate their Proliferation financing risks for risk mitigation.

Current AML/CFT notices don’t directly mention PF risks but cover PF-related offenses under “MAS’ sanctions and freezing of assets of persons regulations”.

Now, MAS has planned to update existing guidance for financial institutions and VCCs to include PF in their ML risk assessment regime, and now they will consider, evaluate, and manage PF risks too..

Modifications to MAS Notice TCA-N03

MAS proposed certain modifications related to the MAS notice TCA-N03. The definition of “trust relevant party” has been modified and includes “the settlor, the trustee, the beneficiaries, and any person who has any power over the disposition of any property that is subject to the trust.”

Details like  “full name, tax ID number, and trust deed or equivalent” are required.

Specific timeline for submitting STRs

MAS is proposing structural guidelines for filing suspicious transaction reports in a certain time frame so that action can be taken immediately to mitigate the risks.

When transactions have been detected as suspicious, financial institutions must report them to the relevant authorities within five business days to ensure AML/CFT compliance is achieved.

Suppose a suspicious transaction is associated with a sanctioned individual or entity. In that case, it must be reported within one business day as a high-risk individual, and entities must be handled immediately.

Read Also:

• Key Insights from HM Treasury 2023-2024 AML/CTF Supervision Report
• Key Outcomes from the FATF Plenary held on 23-25 October 2024
• Key Developments of FATF Plenary, 21-23 February 2024

Other Modifications in AML/CFT Guidelines

• Where applicable, screening should include ML/TF information sources from relevant search engines in jurisdictions associated with the individual. To improve accuracy, the screening process should also be carried out in the individual’s native language.
• Business units should have clear procedures for exchanging customer and associated account information. At the very least, customer due diligence and Source of Wealth (SoW) data gathered under relevant legislation should be included.
• Employees should be trained on how to spot altered or fake data. The prompt implementation of ML/TF risk mitigation measures upon the detection of such signs should be guaranteed by efficient escalation protocols.
• In addition to other pertinent risk reports, FIs and VCCs should include the Money Laundering National Risk Assessment, Terrorism Financing National Risk Assessment, and Proliferation Financing National Risk Assessment in their enterprise-wide ML/TF risk assessment process.
• It is important to identify higher-risk shell firms under MAS Notice 626 or other AML/CFT Notices.
• Participation in tax amnesty schemes needs to be listed under suspect transactions about tax violations in Appendix B.

As per the Consultation Paper, the new proposed amendments will improve the AML/CFT framework of Singapore, and feedback from financial institutions and DNFBPS is appreciated.