The Insurance Act 2015 (the "Act") comes into force tomorrow. It represents a fundamental departure from existing insurance law. The changes impact on a number of key areas which are...11 August 2016
Singapore: Strengthening of the Monetary Authority of Singapore's anti-money laundering (AML) and counter-terrorism financing (CTF) powers
On 11 May 2015, the Monetary Authority of Singapore (Amendment) Bill (the Bill) passed its second reading in Parliament. The Bill will empower the Monetary Authority of Singapore (the MAS) to combat money laundering and terrorism financing more efficiently through a combination of centralised due diligence requirements, enhanced ongoing supervision and inspection powers, and information sharing with foreign counterparts.
Key changes included in the Bill
1. Customer Due Diligence
The obligation on financial institutions to carry out and maintain records of thorough customer due diligence will be enshrined in statute. This demonstrates Singapore's commitment to combating money laundering and countering terrorism financing, in line with international Financial Action Task Force recommendations.
2. Inspection Powers
The Bill aims to centralise the MAS's power to carry out inspections of financial institutions. At present, these powers are spread across a number of sector-specific pieces of legislation. The new provisions contained in the Bill will empower the MAS to:
(a) inspect financial institutions for compliance with international obligations, for example United Nations Security Council Resolutions on sanctions and the prevention of money laundering and terrorism financing; and
(b) appoint a third party (for example an auditor) to inspect a financial institution on its behalf.
3. Information Sharing
In recognition of the international nature of money laundering and terrorism financing, cooperation between the MAS and its foreign counterparts (i.e. other countries' regulatory authorities) will be enhanced. The MAS will be empowered to share information to enable effective AML/CTF monitoring of financial institutions originating from counterpart jurisdictions, and it will also be able to make supervisory enquiries on behalf of a foreign counterpart. Subject to confidentiality safeguards, the information may be further shared with appropriate third parties (for example where required by law, or where the MAS's prior consent is obtained).
Impact on financial institutions
The centralised customer due diligence provisions and inspection powers will demonstrate Singapore's international reputation for efficiency and proactivity in tackling money laundering and terrorism financing, providing comfort to would-be investors. Financial institutions should as always be mindful of complying with their obligations and clearly documenting their compliance in readiness for an inspection.
While information sharing powers may, on their face, give rise to potential concerns, the MAS has taken into account the potential for phishing expeditions to exploit these provisions, and has said that it will put in place confidentiality safeguards and take a proportionate approach to divulging information.
The Hogan Lovells’ Corporate Insurance Newsletter for July has been published. This provides a round-up of UK, EU and international regulatory developments relevant to UK based...04 August 2016
Introduction03 August 2016