1. This report on the Observance of Standards and Codes for the FATF 40 Recommendations for Anti-Money Laundering and 9 Special Recommendations Combating the Financing of Terrorism was prepared by the Financial Action Task Force (FATF). The report provides a summary1 of the AML/CFT measures in place in Singapore as of the time of the on-site visit (3-14 September 2007), and shortly thereafter, the level of compliance with the FATF 40+9 Recommendations, and contains recommendations on how the AML/CFT system could be strengthened. The views expressed in this document have been agreed by the FATF, but do not necessarily reflect the views of the Boards of the IMF and World Bank.
2. Key Findings
2. Singapore is a major financial centre in the Asia/Pacific region. In general, the domestic crime rate is low in Singapore which is largely attributable to the deterrent effect of stringent and effective law enforcement. However, as a developed, open and stable economy located in South East Asia, Singapore faces a range of regional and international money laundering and terrorist financing risks, including capital flight associated with corruption in other South East Asian countries, as well as the proceeds of crime from a range of other offences. The size and growth of Singapore’s private banking and assets management sector poses a significant money laundering (ML) risk based on known typologies. There are also terrorist financing risks. The authorities have taken action against Jemaah Islamiyah and its members and have identified and frozen terrorist assets held in Singapore. Following a security operation that commenced in December 2001, Singapore dismantled the local Jemaah Islamiyah terrorist network and confirmed that the network is no longer carrying out its activities in Singapore and that the amount of terrorist funds held in Singapore was small. Singapore continues to actively monitor for potential terrorism-related activities that may occur in Singapore.
3. Singapore’s AML/CFT efforts are centered on having a sound and comprehensive legal, institutional, policy and supervisory framework, maintaining a low domestic crime rate, fostering an intolerance for domestic corruption, ensuring an efficient judiciary, and preserving a long established culture of compliance and effective monitoring of the measures implemented. Singapore has systematically taken steps to address many of the recommendations that were made in its second FATF mutual evaluation in 1998-1999. In particular, the creation of a financial intelligence unit (FIU) and the implementation of a comprehensive suspicious transaction reporting regime have significantly improved Singapore‘s ability to combat ML/FT. Legally binding AML/CFT Notices that clearly set out comprehensive AML/CFT requirements and provide practical guidance on how these obligations are to be fulfilled have also been issued to different classes of financial institutions. Institutional efforts to improve feedback to financial institutions, enhance supervisory oversight and step up training have also resulted in a significant overall strengthening of Singapore’s AML/CFT regime. Singapore‘s ability to provide mutual legal assistance has also been greatly improved. However, there are remaining concerns about the effectiveness of the money laundering offence and the new cross-border declaration system, the requirements applicable to designated non-financial businesses and professions (DNFBPs), and the availability of beneficial ownership information in relation to legal persons and arrangements.
3. Legal Systems and Related Institutional Measures
4. Singapore has criminalized ML in eight separate provisions of the Corruption, Drug Trafficking and other Serious Crimes (Confiscation of Benefits) Act (CDSA). Singapore’s money laundering offences cover the conversion or transfer, concealment or disguise, possession and acquisition of property in a manner that is largely consistent with the 1988 United Nations (UN) Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna Convention) and the 2000 UN Convention against Transnational Organized Crime (Palermo Convention). There is one minor technical deficiency in relation to the third-party laundering offences. Singapore has adopted a list approach to define the scope of predicate offences. At the time of the evaluation, there were 335 predicate offences for money laundering. There is a broad range of ancillary offences to the money laundering offences. Money laundering applies to both natural and legal persons, and proof of knowledge can be derived from objective factual circumstances. Natural persons are liable to a maximum fine of 500,000 Singapore Dollars (SGD) and/or imprisonment of up to 7 years, while legal persons are liable to a maximum fine of SGD 1,000,000. Overall, the money laundering offence is not effectively implemented, given the overall low number of prosecutions and convictions and the size of Singapore‘s financial sector. The statistics suggest that Singapore is more focused on prosecuting predicate offences (primarily based on domestic crime). Singapore has, generally, been less aggressive in pursuing money laundering as a separate crime in the past, particularly in relation to third-party laundering, through Singapore‘s financial system, of proceeds generated by foreign predicate offences.
5. Singapore has criminalised four main terrorist financing offences in its Terrorism (Suppression of Financing) Act (TSOFA). These provisions cover the collection or provision of funds with the intention that they be used by a terrorist or terrorist organisation, or to carry out a terrorist act. The definition of “property” in the TSOFA is identical to the definition of “funds” in Article 1 of the UN International Convention for the Suppression of the Financing of Terrorism (FT Convention). Natural persons are liable to a maximum fine of SGD 100,000 and/or imprisonment of up to 10 years, while legal persons are liable to a maximum fine of SGD 100,000. While there have been FT investigations, there have not been any prosecutions or convictions, and so the effectiveness of these provisions cannot be assessed.
6. Confiscation provisions are comprehensive as ancillary to criminal prosecutions. Restraint provisions are generally comprehensive as well; however, they do not adequately cover intended instrumentalities or property of corresponding value of instrumentalities. Moreover, given the risk of money being laundered in Singapore (particularly the proceeds of foreign predicate offences), the amount of money being frozen and seized seems low. Confiscation of terrorist-related property may occur without the necessity of ancillary criminal proceedings.
7. The basic provisions to prevent financial institutions and other persons from dealing with terrorist-related assets are contained in the UN (Anti-Terrorism Measures) Regulations (UN (ATM) Regulations), the Monetary Authority of Singapore (Anti-Terrorism Measures) Regulations (2002) (MAS (ATM) Regulations), and TSOFA. They prohibit dealing, directly or indirectly, in any property that a person knows or has reasonable grounds to believe is owned or controlled by or on behalf of any terrorist or terrorist entity. They also prohibit entering into or facilitating any financial transaction related to a dealing in such property, or providing any financial services or any other related services in respect of any terrorist or terrorist organization. The term “terrorist” is defined broadly, and the schedules to the regulations reference the 1267 list. There are adequate processes in place, and although they have not yet done so, Singapore authorities can easily amend the schedule should they choose to designate terrorists of their own. Singapore has, pursuant to foreign requests, successfully used the general provisions in the regulations and in the Criminal Procedure Code (CPC) to seize funds of persons not on the 1267 list.
8. The Suspicious Transaction Reporting Office (STRO) is Singapore‘s financial intelligence unit. STRO was formally established on 10 January 2000 as an enforcement-style FIU under the Financial Investigation Division (FID) of the CAD in the Singapore Police Force (SPF). In 2006, STRO developed and implemented a STR On-Line Lodging System (STROLLS) for filers of suspicious transaction reports (STR). STRO also provides extensive general guidance on STR reporting on its website and through its various publications including the latest ML/TF trends, feedback on typologies, indicators of suspicious transactions and statistics. STRO has direct on-line and instantaneous access to all enforcement information including criminal records maintained by SPF. STRO officers have access to a wide variety of public record information and by the use of their coercive police powers (e.g. their power under section 58 of the Criminal Procedure Code (CPC) to directly obtain the production of relevant evidence), and can obtain information from financial institutions, including financial records. STRO officers, as police officers, may exercise police powers in various situations during the course of investigating an STR. These powers are exercised in order to develop the STR and to identify the possible commission of a money laundering offence or other offences. STRO is successful at identifying domestic predicate offences through its analysis. However, given the potential attractiveness of Singapore as a large, stable and sophisticated financial centre through which to launder money, STRO is encouraged to more strongly focus on the identification of money laundering from foreign predicate offences.
9. The Financial Investigation Branch (FIB), located within the Financial Investigation Division of CAD, is the lead enforcement agency in ML/FT investigations within the SPF. The key role of FIB is to handle money laundering investigations and provide cross-jurisdiction assistance relating to ML for matters under the purview of the SPF. The work of the FIB is complemented by its sister unit in the SPF, the Proceeds of Crime Unit (PCU). The Central Narcotics Bureau (CNB) is also authorised to investigate ML offences, and has established its own specialist investigative unit (the FIT) to investigate ML offences that are related to drug trafficking. Officers of the FIB, PCU and the SPF are empowered under the CPC, CDSA and TSOFA to exercise comprehensive investigative powers, including powers of search, and seizure of evidence in relation to ML, TF or predicate offences. Overall, the regime for investigating ML has not been effectively implemented, as is illustrated by the low number of ML investigations. Although, in the past, it appears that insufficient attention has been paid to pursuing ML offences, the situation seems to be improving. The statistics do show a general increase in the number of ML investigations, with 46 “full scale” ML investigations in 2007 (as at 14 November).
10. With regard to detecting and deterring cross-border movements related to ML or FT, as of 1 November 2007, Singapore has implemented a declaration system which complements (rather than replaces) a disclosure system that Singapore has had in place since November 2004. Although the technical components of the new declaration system are comprehensive, they are too recent to be assessed for their effectiveness.
4. Preventive Measures Financial Institutions
11. The Singapore regulatory structure utilises laws (“Acts”), regulations, and notices, all of which are enforceable. The AML/CFT Notices, issued by the Monetary Authority of Singapore (MAS) and which establish most of the AML/CFT requirements for most financial institutions as described below, are not “law or regulation” according to the FATF definition. However, they are clearly “other enforceable means”, as they create legally enforceable obligations, to which criminal sanctions apply for non-compliance. There are separate Notices applicable to each financial sector; however, the language therein is virtually identical.
12. The Notices also use almost identical language to that used in the FATF Recommendations and AML/CFT Methodology. This means that, overall, preventative measures for the financial sector generally meet a high level of compliance with the detailed provisions of the FATF 40 + 9 Recommendations. Only commodities futures brokers are not yet covered for AML/CFT purposes. In addition, new rules for moneylenders entered into force on 12 November 2007, so their effectiveness cannot yet be assessed. Both of these sectors comprise very small firms that are few in number, and the Monetary Authority of Singapore (MAS) (which regulates the financial sector) views both as being relatively low risk for AML/CFT purposes.
13. Existing customer due diligence (CDD) measures are generally comprehensive and are effectively applied by financial institutions. This includes customer identification and verification, beneficial ownership requirements, and measures for politically exposed persons (PEPs), correspondent banking, and new technologies and non-face to face customers. The main issue is that basic CDD requirements are not laid out in “law or regulation” as required by the FATF standards but rather in the Notices which are “other enforceable means.” Requirements for introduced business are generally comprehensive as well; however, financial institutions are not specifically required to immediately obtain CDD information on introduced customers.
14. Record keeping requirements are comprehensive and are generally observed; however, the requirements for financial institutions to maintain business correspondence, and the requirement for money exchange and remittance businesses to maintain identification data should be laid out in law or regulation. Wire transfer provisions are also broad, and secrecy provisions do not inhibit implementation of the FATF standards.
15. Financial institutions are required to pay special attention to all complex or unusually large transactions or unusual patterns of transactions that have no apparent or visible economic or lawful purpose, inquire into the background and purpose of such, and document their findings with a view to making this information available to the relevant competent authorities should the need arise. Financial institutions are further required to give particular attention to business relations and transactions with any person from or in countries and jurisdictions known to have inadequate AML/CFT measures, as determined by the financial institutions for themselves or notified to financial institutions generally by MAS or other foreign regulatory authorities. However, in relation to those countries which continue not to apply or insufficiently apply the FATF recommendations, no enforceable powers have been exercised to require financial institutions to apply stringent or additional AML/CFT counter-measures.
16. The CDSA requires that any person who, in the course of his/her professional or business duties, knows or has reasonable grounds to suspect that any property represents the proceeds of drug trafficking or criminal conduct (as defined in section 2(1) of the CDSA), or was used or is intended to be used in connection with drug trafficking or criminal conduct (which includes ML/FT) is obliged to disclose the knowledge or suspicion to an STRO officer. “Criminal conduct” includes the 335 predicate offences for money laundering as well as the terrorist financing offences. The MAS Notices specify that attempted transactions must also be reported. There are comprehensive “safe harbor” provisions for STR reporting. Tipping off is also prohibited, although the criminal offence only applies to a transaction that has already been reported and not specifically to those in the process of being reported. The rate of STR reporting has been increasing, with financial institutions filing over 6,000 STRs in 2007 (up to 14 November).
17. Requirements for internal AML/CFT controls, including compliance management arrangements with a compliance officer at the management level, internal audit, training, and screening of employees are being implemented effectively in the various financial sectors. Financial institutions (other than commodities futures brokers) implement their requirements for group AML/CFT policies. These require that overseas branches or subsidiaries apply the higher of the two AML/CFT standards where they differ, and report to MAS when this is not possible due to domestic law. Singapore implements comprehensive requirements concerning shell banks.
18. The MAS is Singapore‘s central bank and financial services regulator. It has supervisory responsibility over banks, finance companies, merchant banks, insurance companies, capital markets services (CMS) licensees, financial advisers, moneychangers and remittance agents. From early 2008, MAS will also have regulatory oversight of commodity futures trading in Singapore. MAS sets its own budget (about half of which is spent on supervision) and hires the staff it requires to perform its supervisory functions.
19. Financial institutions have to obtain MAS‘ approval to carry on business in Singapore. MAS‘ approval is generally required for: (1) the appointment of directors and senior management and in the case of institutions carrying out the banking business, nominating committees; and (2) specific threshold changes in shareholdings of the financial institution. The directors and some members of senior management of financial institutions that are subject to the Core Principles are required to satisfy fit and proper criteria. Money changing and remittance (value transfer) businesses also require a license from MAS in order to legally operate. The Singapore authorities have made some efforts to locate unlicensed remitters and sanction them accordingly. However, Singapore should develop more pro-active policies with a view to reducing the number of possible unlicensed money-changing and remittance businesses considering the large communities of migrant workers from countries with poor banking systems present in Singapore.
20. MAS uses a risk-based approach to financial supervision. Each institution is assessed and assigned two ratings: (1) an impact rating that assesses the potential impact which it might have on Singapore‘s financial system, economy and reputation in the event of a significant mishap (e.g. financial or major control failure, and prolonged business disruption); and (2) a risk rating which assesses the likelihood of these significant mishaps occurring. It then uses a risk assessment, CRAFT (Common Risk Assessment Framework and Techniques), to evaluate the risk of an institution. Finally, the MAS determines the appropriate supervisory strategies and, in turn, the level of supervisory intensity required. Impact and risk ratings are combined to assign the institution to one of four categories (“buckets”) of supervisory significance. The intensity of supervision varies according to the bucket.
21. For financial institutions that are subject to the Core Principles (i.e. banks, merchant banks, finance companies, financial advisers, CMS licensees and insurers), MAS applies similar supervisory measures used for prudential purposes in relation to AML/CFT.
22. MAS has a broad range of powers to monitor and ensure that financial institutions comply with AML/CFT measures, including powers of off-site surveillance, auditing and on-site visits and inspections. MAS conducts both routine and thematic on-site inspections of the financial institutions under its supervision. All financial institutions are subjected to base-level supervision and monitoring. The scope and frequency of inspection varies among the financial institutions, depending on MAS‘ impact and risk assessment on the financial institutions. The inspection period for each financial institution could range from 2-3 days for institutions like financial advisers to 1-4 weeks for banks, depending on the size of the financial institution and the scope of inspection. For 2007 (up to 14 November), MAS carried out 27 on-site inspections of banks (which included AML/CFT), among them five thematic AML inspections (i.e. AML/CFT only). The scope of MAS inspection includes a review of the financial institutions‘ policies and procedures, books and records, and sample or transaction testing. MAS also has comprehensive powers to require a financial institution to produce its books, accounts and documents, and to afford MAS access to such information or facilities as may be required to conduct the inspection or investigation.
23. Financial institutions that fail to comply with or properly implement their AML/CFT obligations are subject to a range of criminal, regulatory and supervisory measures. Additionally, a director, managing director, and a varying range of management personnel and, in some cases, officers of the financial institution may be personally liable if they fail to take all reasonable steps to secure the financial institution‘s compliance with relevant legislation and for non-compliance with directions issued to specific institutions pursuant to the MAS Act. MAS may also direct the removal of a chief executive or officer, or issue him/her a formal reprimand.
24. The MAS Act authorises the MAS to notify a financial institution or make any recommendation that it sees fit. This broad power thus includes the ability to issue a warning or reprimand letter, which could indicate specific deficiencies that need to be rectified, order a change in management, suspend or withdraw a license, or issue a fine. Recent amendments to the MAS Act create a derivative liability in the MAS Act on officers (directors, members of the committee of management, chief executive, manager, secretary or other similar officers) where non-compliance by a financial institution is attributable to their consent, connivance or neglect.
25. MAS reports that administrative sanctions such as a letter of reprimand or letter requiring remedial action have been very effective in getting financial institutions to rectify their breaches and deficiencies. No criminal sanctions have been issued; fines have only been issued against money remitters and bureaux de change.
5. Preventive Measures-Designated Non-Financial Businesses and Professions (DNFBPs)
26. Singapore has applied AML/CFT preventive measures to trust companies (that are regulated as financial institutions) and lawyers. Singapore has not yet applied preventive measures to accountants when they undertake the type of work covered by Recommendation 12, trust service providers (other than trust companies and lawyers), company service providers, dealers in precious metals and stones and real estate agents. Physical casinos are not yet in operation, and internet casinos are prohibited.
27. Lawyers are subject to the Legal Profession (Professional Conduct) Rules (the ‘Rules’) issued by the Law Society. Amendments to the Rules with respect to some CDD and record keeping requirements came into operation on 15 August 2007. The Council of the Law Society has also issued a Practice Direction on AML/CFT that came into force on 15 August 2007. It sets out more details and complements the obligations under the Rules. For example, lawyers are required to take reasonable measures to ascertain the identity of a client before accepting instructions on any matter. Lawyers must obtain satisfactory evidence as to the nature and purpose of the business relationship with the client when carrying out activities of most of the types covered by Recommendation 12 for a client and they must examine the background and purpose of transactions that are complex, unusual or large. However, there are still key deficiencies in the Practice Direction in that there are no specific requirements, for example, for a lawyer to identify the beneficial owner for all customers or to determine if the customer is acting on behalf of another person, or conduct CDD when there is a suspicion of ML/FT or when there are doubts about the veracity or adequacy of previously obtained customer identification data.
28. The reporting requirements that apply to financial institutions under the CDSA (s.39) and TSOFA (s.8 and 10) apply to all persons, and therefore to all DNFBPs. The safe harbor and no tipping off provisions also apply. However, there are some concerns about how effectively the reporting requirement has been implemented in the DNFBP sectors.
29. There are currently no enforceable obligations relating to Recommendations 15 and 21 in relation to DNFBPs, other than lawyers and trust companies that are regulated as financial institutions.
30. Lawyers are supervised for compliance with AML/CFT requirements by their SRO; however, as the regime is very new, its effectiveness cannot yet be assessed. Real estate agents, dealers in precious metals and stones, and TCSPs (other than trust companies that are regulated as financial institutions as described in section 3 of this report) have not been issued with AML/CFT measures (other than the reporting obligations) and are therefore not monitored for AML/CFT compliance.
6. Legal Persons and Arrangements & Non-Profit Organisations
31. ACRA is the central registration authority in Singapore for business entities. ACRA maintains a register containing information on entities, including ownership and control of companies and limited liability partnerships. Supplementing this information is a requirement for entities to maintain information on their premises (such as shareholder registers) which may be, in some instances, available for public inspection. While the investigative powers are generally sound and widely used, there are limited measures in place to ensure that there is adequate, accurate and timely information on the beneficial ownership and control of legal persons which can be obtained or accessed in a timely fashion by competent authorities.
32. The competent authorities have powers to access information on the beneficial ownership of trusts. However, availability of that information is limited by the fact that only trusts administered by trustee companies and trust company service providers are obliged to maintain such information.
33. Singapore‘s non-profit organisation (NPO) sector is significantly populated by two forms of entities, namely charities and Institutions of a Public Character (IPCs). Charities are established exclusively for charitable objects including relief of poverty, advancement of education, advancement of religion and other purposes beneficial to the community. IPCs are NPOs whose activities are beneficial to the community in Singapore as a whole and are authorized to receive tax-deductible donations. All charities and IPCs in Singapore are supervised by the Commissioner of Charities who is assisted by six other government agencies overseeing charities and IPCs in their respective sectors. The Commissioner of Charities has conducted outreach to the NPO sector concerning Singapore‘s AML/CFT laws; how to counter certain ML/FT risks within the sector; and reminding NPOs of their obligations to file STRs. No charity or IPC has yet filed a STR. All charities and IPCs in Singapore are subject to some form of supervision by the Ministry of Community Development, Youth and Sports. The Commissioner of Charities also has the power to sanction violations of oversight measures. Charities must keep accounting records sufficient to show and explain all the charity‘s transactions monies received and expended and a record of assets and liabilities.
7. National and International Co-operation
34. Singapore utilises a multi-agency AML/CFT strategy involving law enforcement, policy makers, regulators and the private sector. This effort is led by a high-level Steering Committee established in 1999. The Steering Committee is supported by the working-level Inter-Agency Committee (IAC) comprised of 15 agencies and departments. To ensure a coordinated effort in combating terrorism (including terrorist financing), members of the IAC are also represented on the Inter-Ministry Committee on Terrorism (IMC on Terrorism) which was established in 2001.
35. Singapore is a party to the Vienna Convention, the FT Convention, and the Palermo Convention.
36. The Mutual Assistance in Criminal Matters Act (MACMA) allows Singapore to provide mutual legal assistance (MLA) to other jurisdictions, in relation to criminal investigations or criminal proceedings for offences that are covered under the Act (335 crimes, including ML and FT). Requests for MLA are processed by the Attorney General‘s Chambers (AGC). Amendments to the Act in April 2006 mean that a mutual legal assistance treaty (MLAT) is no longer required before coercive assistance can be provided to any requesting State as long as the requesting State provides a reciprocity undertaking before assistance is granted. With respect to MLATs, Singapore has bilateral MLATs with the Hong Kong Special Administrative Region, India, the United States (in the form of a Drug Designation Agreement) and a MLAT relationship with Malaysia, Vietnam, Brunei Darussalam, and Laos. Dual criminality is required for coercive measures, but is not interpreted in an overly strict manner as it is the criminal conduct alleged which is examined as a whole to determine whether the conduct would amount to a scheduled offence in the CDSA list in Singapore, not the label of the offence or its constituent elements. Assistance that may be provided includes the production or seizure of information, documents, or evidence (including financial records) from financial institutions, other entities, or natural persons; and searches of financial institutions, other entities, and domiciles. The 2006 MACMA legislation appears to have addressed some major deficiencies in mutual legal assistance previously encountered in foreign requests to Singapore for assistance. Singapore authorities maintain that MACMA has enabled them to provide MLA in a timely, constructive and effective manner. However, there has not been sufficient time to show whether the provisions are working fully effectively.
37. Singapore may provide assistance to foreign governments in the enforcement of a foreign confiscation order or the restraining of dealing in any property that is related to that confiscation order and is reasonably believed to be located in Singapore, as ancillary to a foreign criminal prosecution. MACMA also authorises Singapore to enforce foreign instrumentalities orders; however this does not cover instrumentalities intended for use in the commission of offences or substitute property. Singapore authorities indicate that other legislation could be used for these items; however, the effectiveness of those provisions cannot be assessed.
38. ML is an extraditable offence as it is listed in the First Schedule to the Extradition Act. Likewise, FT offences are deemed extraditable crimes under the Extradition Act by virtue of section 33(1) of the TSOFA. Singapore can extradite its own nationals.
39. Singapore has also implemented measures to facilitate administrative cooperation between domestic authorities and foreign counterparts outside of the formal MLA process.
8. Resources and Statistics
40. Singapore has dedicated appropriate financial, human, and technical resources to the various areas of its AML/CFT regime. All competent authorities are required to maintain high professional standards, including standards concerning confidentiality, and receive adequate AML/CFT Training.
41. Singapore generally maintains comprehensive statistics, enabling it to assess the effectiveness of its AML/CFT measures. However, the statistics relating to the number of cases and amounts of property frozen, seized and confiscated do not specifically distinguish between cases in which there is a close relation between the domestic predicate offences and the money laundering investigations.
The rating of compliance vis-à-vis the FATF Recommendations should be made according to the four levels of compliance mentioned in the 2004 Methodology (Compliant (C), Largely Compliant (LC), Partially Compliant (PC), Non-Compliant (NC), or could, in exceptional cases, be marked as not applicable (NA).
|Compliant||The Recommendation is fully observed with respect to all essential criteria.|
|Largely compliant||There are only minor shortcomings, with a large majority of the essential criteria being fully met.|
|Partially compliant||The country has taken some substantive action and complies with some of the essential criteria.|
|Non-compliant||There are major shortcomings, with a large majority of the essential criteria not being met.|
|Not applicable||A requirement or part of a requirement does not apply, due to the structural, legal or institutional features of a country e.g. a particular type of financial institution does not exist in that country.|
|Forty Recommendations||Rating||Summary of factors underlying rating|
|1. ML offence||PC|
|2. ML offence-mental element and corporate liability||LC|
|3. Confiscation and provisional measures||LC|
|4. Secrecy laws consistent with the Recommendations||C|
|5. Customer due diligence||LC|
|6. Politically exposed persons||LC|
|7. Correspondent banking||C|
|8. New technologies & non face-to-face business||LC|
|9. Third parties and introducers||LC|
|10. Record keeping||LC|
|11. Unusual transactions||LC|
|12. DNFBP-R.5, 6, 8-11||NC|
|13. Suspicious transaction reporting||LC|
|14. Protection no tipping-off||LC|
|15. Internal controls, compliance audit||LC|
|16. DNFBP R.13-15 21||PC|
|18. Shell banks||C|
|19. Other forms of reporting||C|
|20. Other NFBP & secure transaction techniques||LC|
|21. Special attention for higher risk countries||LC|
|22. Foreign branches & subsidiaries||LC|
|23. Regulation, supervision and monitoring||LC|
|24. DNFBP - regulation, supervision and monitoring||NC|
|25. Guidelines & Feedback||LC|
|Institutional and other measures|
|26. The FIU||LC|
|27. Law enforcement authorities||LC|
|28. Powers of competent authorities||C|
|30. Resources, integrity and training||C|
|31. National co-operation||C|
|33. Legal persons beneficial owners||PC|
|34. Legal arrangements beneficial owners||PC|
|36. Mutual legal assistance (MLA)||LC|
|37. Dual criminality||C|
|38. MLA on confiscation and freezing||LC|
|40. Other forms of co-operation||C|
|Nine Special Recommendations||Rating||Summary of factors underlying rating|
|SR.I Implement UN instruments||LC|
|SR.II Criminalise terrorist financing||LC|
|SR.III Freeze and confiscate terrorist assets||LC|
|SR.IV Suspicious transaction reporting||C|
|SR.V International co-operation||LC|
|SR VI AML requirements for money/value transfer services||LC|
|SR VII Wire transfer rules||LC|
|SR.VIII Non-profit organisations||LC|
|SR.IX Cross Border Declaration & Disclosure||LC|
|AML/CFT System||Recommended Action (listed in order of priority)|
|2. Legal System and Related Institutional Measures|
|Criminalisation of Money Laundering (R.1 & 2)|
|Criminalisation of Terrorist Financing (SR.II)|
|Confiscation, freezing and seizing of proceeds of crime (R.3)|
|Freezing of funds used for terrorist financing (SR.III)|
|The Financial Intelligence Unit and its functions (R.26)|
|Law enforcement, prosecution and other competent authorities (R.27 & 28)|
|Cross border declaration or disclosure (SR.IX)|
|3. Preventive Measures Financial Institutions|
|Risk of money laundering or terrorist financing|
|Customer due diligence, including enhanced or reduced measures (R.5 to 8)|
|Third parties and introduced business (R.9)|
|Financial institution secrecy or confidentiality (R.4)|
|Record keeping and wire transfer rules (R.10 & SR.VII)|
|Monitoring of transactions and relationships (R.11 & 21)|
|Suspicious transaction reports and other reporting (R.13-14, 19, 25 & SR.IV)|
|Internal controls, compliance, audit and foreign branches (R.15 & 22)|
|Shell banks (R.18)|
|The supervisory and oversight system -competent authorities and SROs. Role, functions, duties and powers (including sanctions) (R.23, 29, 17 & 25)|
|Money value transfer services (SR.VI)|
|4. Preventive Measures Non-Financial Businesses and Professions|
|Customer due diligence and record-keeping (R.12)|
|Suspicious transaction reporting (R.16)|
|Regulation, supervision and monitoring (R.24-25)|
|Other designated non-financial businesses and professions (R.20)|
|5. Legal Persons and Arrangements & Non-Profit Organisations|
|Legal Persons–Access to beneficial ownership and control information (R.33)|
|Legal Arrangements–Access to beneficial ownership and control information (R.34)|
|Non-profit organisations (SR.VIII)|
|6. National and International Co-operation|
|National co-operation and coordination (R.31)|
|The Conventions and UN Special Resolutions (R.35 & SR.I)|
|Mutual Legal Assistance (R.36-38 & SR.V)|
|Extradition (R.39, 37, SR.V)|
|Other Forms of Co-operation (R.40 & SR.V)|
|7. Resources and Statistics|
|7.1 Resources and statistics (R.30 & 32)|
|7.2 Other relevant AML/CFT measures or issues|
|7.3 General framework $#x2013; structural issues|