The Monetary Authority of Singapore to Designate Tax Crimes as Money Laundering Predicate Offences

The Monetary Authority of Singapore to Designate Tax Crimes as Money Laundering Predicate Offences

Singapore, 9 October 2012. The Monetary Authority of Singapore (MAS) has issued a consultation paper on the designation of tax crimes as money laundering (ML) predicate offences in Singapore.

As part of MAS’ ongoing efforts to protect the integrity and reputation of Singapore as a trusted international financial centre, a broad range of serious tax crimes will be designated as ML predicate offences from 1 July 2013. The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act will be updated to include the designated offences.

With the designation, financial institutions (FIs) must apply the full suite of the Anti-Money Laundering/Countering the Financing of Terrorism measures as contained in the relevant MAS Notices, to prevent the laundering of proceeds from serious tax crimes. This involves the conduct of rigorous customer due diligence and transactions monitoring, as well as, proper reporting of suspicious transactions. FIs must adequately identify and assess tax related risks and take action to appropriately manage and mitigate those risks.

The consultation paper proposes an implementation framework of essential elements that FIs should observe to comply with the new requirements. FIs must develop and implement policies, controls and procedures to effectively detect and deter the laundering of proceeds from wilful or fraudulent tax evasion through the financial system. This includes supplementing existing client acceptance and ongoing transactions monitoring with tax-specific red flag indicators as well as critically reviewing existing clients to assess the tax legitimacy of assets booked. FIs should also establish proper escalation policies for managing high-risk clients, including appropriate senior management approval procedures.

The consultation paper is available.

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