The 2 papers aim to help financial institutions guard against trade-based money laundering and the misuse of company structures for illicit purposes.
On 14 May, the Anti-Money Laundering and Countering the
Financing of Terrorism Industry Partnership (ACIP) in Singapore has published
two best practice papers for financial institutions to guard against
trade-based money laundering and the misuse of company structures for illicit
Set up in April 2017, the ACIP is a private-public
partnership co-chaired by CAD and MAS, and is supported by a steering group
comprising 8 banks and ABS. ACIP brings together both stakeholders from
industry and government and provides a dedicated platform to discuss key
transnational illicit finance risks confronting Singapore’s financial and
non-financial sectors as well as identify and promote areas to uplift risk
understanding of money laundering and terrorism financing in Singapore.
The two papers, titled Legal
Persons – Misuse Typologies and Best Practices and Best
Practices for Countering Trade Based Money Laundering, discuss common red
flags linked to trade-based money laundering, as well as recent typologies
involving the misuse of companies and other legal persons. The two papers also recommend
measures that financial institutions can take to identify or prevent such
The Papers were produced by two industry-led working groups,
comprising representatives from major banks, professional service providers and
government agencies in Singapore. The recommendations are also relevant for
professional service providers outside the financial sector, such as lawyers,
accountants and company services providers.
In addition, ACIP has set up a data analytics working group
to leverage the collective experience of its members in using AML/CFT data
analytics to better detect suspicious client profiles, activities or
transaction patterns. The working group will also identify areas where closer
collaboration between industry and government can enhance enforcement efforts
against criminals who abuse Singapore’s financial system.
“We are heartened by the industry’s commitment in tackling
money laundering, terrorism financing and other illicit activities. As
criminals employ increasingly sophisticated means to launder money, financial
institutions, intermediaries and gatekeepers must remain vigilant and take
pre-emptive measures to combat such risks,” said Mr Chua Kim Leng, Special
Advisor of MAS’ Financial Supervision Group.
In his keynote speech at the ACIP Industry Dialogue 2018, Mr
mentioned the use of data analytics in anti-money laundering (AML) and
countering the financing of terrorism (CFL). According to Mr Chua, a number of bank
have started to integrate data analytics tools into their anti-money laundering
and countering terrorism financing controls and transaction monitoring.
He announced that ACIP member banks have come together to
form a new workgroup to share their collective experience, provide practical
insights on understanding, acquiring, building or co-creating AML/CFT analytics
solutions. The group will also identify areas where closer collaboration
between the industry and the government could lead to substantive and
transformative change. I look forward to the group’s findings and
recommendations later in the year.
At the same time, Mr Chua also shared that the Monetary
Authority of Singapore (MAS) has been incorporating data analytics into our
“One promising area is in STR analytics. Through the use of
network analysis, we have been able to identify groups of related STRs across
banks and over time among the numerous STRs that banks file every year. In some
cases, there could be potential illicit activities. This is one area where
banks could look into gaining deeper insights from the information you already
have,” he said.
“Another aspect is in the conduct of our inspections. Data
analytics has helped us better identify problem areas, such as higher-risk
accounts or transactions, for targeted reviews. This has made our inspections
more focused and effective, and has yielded findings that would be more useful
to the banks in enhancing their AML/CFT systems and implementation,” he added.
The Papers are available on the website
of the Association of Banks in Singapore (ABS). The Commercial Affairs
Department (CAD) and the MAS encourage all relevant firms to adopt the red flag
indicators and recommended measures to strengthen resilience against
money-laundering and terrorism-financing risks.
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