Publication of Countering Proliferation Financing Industry Best Practice Paper

Dear Regulated Dealer, 

The Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Industry Partnership (ACIP)¹ Counter-Proliferation Financing (CPF) Working Group, in consultation with industry across various financial and non-financial sectors, has produced an industry best practice paper (BPP), “Countering Proliferation Financing – Industry Perspectives on Best Practices”. The BPP sets out observed proliferation financing (PF) typologies that Singapore is exposed to, PF risk factors and recommended best practices for assessing and mitigating PF risks. The paper is intended to complement Singapore’s PF National Risk Assessment(PF NRA) and existing guidance, and provide practical suggestions to both financial institutions (FIs) and non-FIs in their assessment and management of PF and sanctions evasion risks.

2.            Regulated dealers are strongly encouraged to review this BPP and assess how the typologies, risk factors and best practices described within can be factored into their existing frameworks to better mitigate PF and sanctions evasion risks. 

What Should You Do?

3.           Regulated dealers are reminded to:

• Have controls and processes in place to identify, assess, understand and manage your PF risks, and to ensure continued compliance with Regulations made under the United Nations Act, especially the United Nations (Sanctions — Democratic People’s Republic of Korea) Regulations 2010 and the United Nations (Sanctions — Iran) Regulations 2019 (UN Sanctions Regulations). In line with existing guidance, these controls and processes need not be standalone CPF controls and processes and can be part of your AML/CFT framework.

• File suspicious transaction reports (STRs) if necessary and as soon as possible with the Suspicious Transaction Reporting Office in line with the requirements under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 (CDSA) as offences under the various UN Sanctions Regulations are ML predicate offences. In particular, where there is a positive sanctions hit involving an individual or entity designated by the United Nations Security Council (UNSC), an STR should be filed as soon as possible and no later than one business day.  

• Immediately inform MinLaw by emailing amlcftcpf@mlaw.gov.sg if you have frozen the assets of an individual or entity designated by the UNSC, copying the officers-in-charge of your entity and file an STR as soon as possible and no later than one business day.

• Keep up-to-date with PF typologies including those featured in Singapore’s PF NRA (which includes sector-specific PF typologies), as well as the Financial Action Task Force’s reports. You should also be alert to emerging PF typologies and sanctions evasion techniques, and continue to strengthen your controls to target risks, including through the use of data analytics.

• Review Singapore’s PF NRA to have a better understanding of Singapore’s key PF threats (i.e. misuse of legal persons, ship-to-ship transfers, movement of dual-use goods, export of luxury goods² and misuse of virtual assets) and higher-PF risk sectors (i.e. banks, digital payment token service providers, corporate service providers, remittance agents, maritime insurers, precious stones and precious metals dealers, and lawyers).

  • • You should assess the extent of your exposure of your customer base and activities to Singapore’s key PF threats and relevant PF risk factors as set out in the PF NRA. Where relevant, you should pay particular attention to risk factors that are specific to your sector, and implement commensurate measures.

    • You should also have a good understanding of your PF risks and have in place robust controls.

• Subscribe to MAS’ website (by selecting “Anti-Money Laundering" under "Regulation Focus Areas”) to be updated when there are changes to the UNSC sanctions lists to complement existing mechanisms such as subscription to commercial screening databases.

• Remain sensitive to rapidly evolving global PF and sanctions evasion risks, and take into account sanctions imposed by other jurisdictions that could pose reputational, legal and operational risks to your entity.

4.           Click here for the best practice paper.

¹ _{For more details on ACIP, please refer to: https://www.mas.gov.sg/regulation/anti-money-laundering/amlcft-industry-partnership-acip}

²  _{With respect to dual-use goods and luxury goods, FIs and DNFBPs should take into consideration the Strategic Goods (Control) Act 2002 and its subsidiary legislation, and Regulation of Imports and Exports Regulations.}

Anti-Money Laundering/Countering the Financing of Terrorism Division
Ministry of Law