Corporate & Securities Singapore Client Alert April 2015 For further information please contact: Stephanie Magnus +65 6434 2672 stephanie.magnus@bakermckenzie. com Liew Ying Yi +65 6434 2531 YingYi.Liew@bakermckenzie.com Address 8 Marina Boulevard, #05-01 Marina Bay Financial Centre Tower 1 Singapore 018981 www.bakermckenzie.com Stronger Anti-Money Laundering and Terrorism Financing Regulations in Place The Monetary Authority of Singapore ("MAS") has issued revised supervisory notices to financial institutions ("FIs") on anti-money laundering ("AML") and counter-terrorism financing ("CFT") on 24 April 2015. This comes around nine months after the MAS issued the Consultation Paper P009 - 2014 which proposed comprehensive revisions to its previous supervisory notices for various financial institutions (and introduced a new notice for non-bank credit and charge card licensees) to keep pace with international AML/CFT best practices and the latest Financial Action Task Force recommendations. (See also our earlier Client Alert on "A snapshot of Singapore's anti-money laundering regulations including proposed sweeping anti-money laundering and counter-terrorist financing revisions to supervisory notices"). Key changes that are now in place include: requiring more comprehensive enterprise-wide AML/CTF risk assessment to complement risk assessment of individual customers; elaboration on the requisite steps to identify and verify the beneficial ownership of companies, LLPs and trusts; introducing a new category of Politically Exposed Persons; and additional requirements for cross-border wire transfers exceeding S$1,500. In relation to Notice 626 (applicable to banks), MAS appears to have taken on board feedback that the expanded definition of "relationship management" may be overly broad and construed as applying these AML requirements to include the bank's provision of a wide range of incidental services to overseas customers. As such, MAS has retained the current approach of leaving the definition of "relationship management" in the applicable guidelines to avoid applying the requirements of the Notice beyond what is intended. MAS has also clarified the scope of the enterprise-wide risk assessment that needs to be carried out - for example, for banks incorporated in Singapore, this includes overseas branches and subsidiaries of the Singapore entity. Further, in response to comments that it is unclear what constitutes "reasonable suspicion", MAS has provided further detail on examples of types of suspicious transactions in the relevant guidelines. The applicable AML/CFT guidelines have also been fleshed out to specify the types of customer due diligence information to be obtained. In this regard, MAS has also clarified that it expects banks to obtain the full residential addresses of customers when performing its customer due diligence and as such, the address of banks for hold mail customers, or addresses of other third parties (e.g. corporate service providers) will not be acceptable. Save for non-bank credit card or charge card licensees, the following FIs have been given lead time until 24 May 2015 to comply with the applicable revised notices, with the exception of certain specific provisions: banks merchant banks finance companies capital markets intermediaries money-changers and remittance businesses life insurers financial advisers approved trustees trust companies stored value facility holders For certain provisions, namely on assessing risks and applying a risk-based approach, new products, practices and technologies, correspondent accounts and group information sharing requirements, as may be applicable, these FIs have until 24 July 2015 to comply. Non-bank credit card or charge card licensees have until 24 July 2015 to comply with the requirements of the new Notice 626A (applicable to credit card or charge card licensees). MAS has also specifically provided in the notices for certain FIs (including banks, capital market intermediaries, direct life insurers and non-bank credit card or charge card licensees) that the remediation of high-risk customers should be completed by 25 October 2015. These FIs are also reminded to ensure that enhanced customer due diligence measures are performed on the high-risk customers identified within their existing customer base. As these latest changes are fairly comprehensive, please contact us for further details should you have any questions on how they may apply to your company. ©2015 Baker & McKenzie. All rights reserved. Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an “office” means an office of any such law firm. 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