As a newly incorporated company owner it is important to be aware of the policies and requirements placed for anti-money laundering. This is for compliance purposes. The policies and requirements are placed there by the Ministry of Finance (MOF) in Singapore to reduce opportunities for using companies as a front for illegal purposes hence protecting the integrity of the system. Money laundering related offences is regulated by the Corruption, Drug Trafficking and other serious Crimes act.
The policies are to also detect and deter money laundering and terrorism financing. The requirements are as discussed below:
1. All companies must be registered as Filling Agents. (FA)
The company has to be registered as a Filling Agent hence will be allowed to carry out filling transactions. The employees also have to qualify as Qualified Individuals (QIs).
2. All companies are required to implement internal procedures
Each company is required to have their own internal policies concerning money laundering. Policies on who not to allow into the company and who to allow. Policies on how a customer’s risk should be established and the kind of scrutiny a customer should undergo. ACRA gives guidelines to a company on these policies.
3. The companies are required to access risks when handling customers or fellow dealers
For new clients, the company is required to do a full screening procedure on the client. The screening is to establish and calculate the potentials risks of money laundering. The screening results are to be recorded. The Legislation Act gives a number of guidelines to determine the risk. The guidelines include customer factors, country/territory risk factors and service risk factors. Once these factors are considered, the customer can be ranked as a high risk or a low risk.
4. All companies are required to conduct initial due diligence
When a new customer arrives, the company is required to do background checks on them before establishing a business relationship with the customer. The company is required to counter check any money laundering accusations on the customer made before. The company is also required to ensure the documents and information given by the customer is authentic. The company is also required to verify itself to the customer. The company is also required to acquire the authentic purpose of the business relationship from the customer; and they should go further to verify that they are no malicious reasons acting as Trojans. After verifying all this company is required to collect and record the customer’s information.
5. All companies are required to conduct on-going monitoring
Once a business relationship has been established with a customer, the company is required to continue monitoring the customer. Monitoring in the following terms; monitoring all the transactions between the company and the customer including the source of the funds. High risk customers should be monitored more. The company is expected to keep the documents used for monitoring up to date, this is to ensure anytime the customer changes their information the company is also on the same trail.
6. All companies are required to practice record keeping
The act requires that the company keeps records of all the transactions ongoing. The records should be sufficient for an audit to be performed. The records include: customer information, risk assessments, copies of the customer’s identity and any other supporting document. They can be kept as original documents or as photocopies or in electronic format. The company is also required to maintain an audit function which regularly accesses the records. The audits can/may be performed by an internal or an external auditor. The records are to remain in the company within the company-customer business relationship term and 5 years after the relationship has been ended.
7. All companies are required to train their new employees
When hiring new employees the company is required to screen the new employee. This is to discover whether or not the new employee was once involved in any fraud or dishonesty. The screening procedure also checks whether the employee has been undercharged bankrupt in Singapore and whether they have previously been in a role as a registered filling agent.
After the employee has been screened and deemed satisfactory, they are taken to be taken in for training. They are trained on the methods of money laundering that are commonly used and on the laws placed for the prevention of money laundering. The laws they are to be trained on are given by the Ministry of Finance (MOF).
The above requirements are to be met by each Incorporated Company in Singapore failure to which the company will face penalties for non-compliance.