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Cablegate: Singapore Tightens Regulations for Money Changing

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SINGAPORE 002536

SIPDIS

E.O. 12356: N/A
TAGS: ECPS EFIN ETTC ECON EINV ETRD KTFN SN
SUBJECT: SINGAPORE TIGHTENS REGULATIONS FOR MONEY CHANGING
AND REMITTANCE BUSINESSES

REFS: A) 04 SINGAPORE 3540 B) SINGAPORE 2155 C) SINGAPORE

1706

1. Singapore's parliament on August 15 approved changes to
the Money-Changing and Remittance Business Act, last amended
in 2002, designed to strengthen the government's ability to
combat money laundering and terrorist finance-related
activities in the money-changing and remittance sector. The
revised law is expected to come into effect by the end of
the year.

2. Under the new law:

-- Licensees must incorporate as companies with minimum paid-
up capital of S$100,000 (US$60,000). Currently, many of
Singapore's more than 100 licensees operate as sole
proprietorships or family-run partnerships.

-- The maximum penalty for operating an unlicensed money-
changing or remittance business will be increased from
S$50,000 (US$30,000) to S$100,000 (US$60,000).

-- Inward remittances will be subject to anti-money
laundering (AML) and countering the financing of terrorism
(CFT) regulations as currently is the case for outward
remittances.

-- Officers, managers and license holders will be held
personally liable for losses incurred in cases where a court
finds that they have engaged in fraudulent business
activities.

-- The Monetary Authority of Singapore (MAS), which
regulates the country's financial institutions, must approve
the appointments of directors, partners and substantial
shareholders.

-- MAS will publicly disclose any disciplinary actions taken
against licensees.

3. As noted Ref A, alternative remittance systems are used
primarily by Singapore's approximately 500,000 foreign guest
workers. All remittance agents, formal or informal, must be
licensed and are subject to the same type of laws and
regulations as banks and other financial institutions,
including requirements for record keeping and the filing of
suspicious transaction reports. Firms must submit a
financial statement every three months, and report the
largest amount transmitted on a single day.

4. As part of its efforts to map out legal and regulatory
changes to implement the Financial Action Task Force's
(FATF) 40 AML Recommendations and Special 9 CFT
Recommendations, Singapore plans to issue new and revised
regulations for banks and other financial institutions by
the end of this year, and for designated non-financial
businesses and professions after that (Ref B). FATF is an
intergovernmental body whose purpose is the development of
international and national policies to combat money
laundering and terrorist financing.

LAVIN

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