In the effort of guarding against trade-based money laundering and other illicit crimes within the financial industry, two papers have been published in Singapore by the Anti-Money Laundering and Countering the Financing of Terrorism Industry Partnership (ACIP). These papers establish the best practices to counter money laundering and exploitation within companies.
The first paper, Legal Persons- Misuse Typologies and Best Practices, establishes major issues within the global economy and how Legal Persons can aid in corrupted practices, including money laundering, terrorism financing, and proliferation financing. Legal Persons are defined as any entities, other than natural persons, that can establish a permanent customer relationship with a financial institution or otherwise own property. While these known risks exist, they have been acknowledged by the ACIP and have collaborated with a public-private initiative (co-Chaired by the Commercial Affairs Department and the Monetary Authority of Singapore) to identify, analyze, and decrease money laundering and terrorist financing risks within Singapore. The group plans to develop this mission through the use of detailed typologies which indicate red flags and other high risk areas.
This initiative sets out to create profiles for active legal persons in Singapore, provide typologies and case studies on the misuse of legal persons in Singapore, establish red flag indicators, and dictate recommendations to improve detection of corrupt practices.
The second paper, Best Practices for Countering Trade Based Money Laundering, introduces a government-industry partnership between the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) of the Singapore Police Force to strengthen Singapore’s anti-money laundering (AML) and financial crime regulations. The paper’s objective is to establish guidance to implement the standards stipulated in MAS guidance on Trade Finance and Correspondent Banking.
The recommendations made in both papers can potentially provide relevant support in the fight against money laundering and other illicit financial crimes. The papers are also beneficial to professional service members that are separate from the financial realm, including lawyers and accountants allowing them to make proper financial decisions while conducting business.
Mr. Chua Kim Leng, the Special Advisor of MAS’ Financial Supervision Group, said the company is “heartened by the industry’s commitment in tackling money laundering, terrorism financing and other illicit activities,” however, the financial industry must remain vigilant in combating these risks.
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