Singapore IV: AML/CFT and Compliance — a part of the book Digital Assets Law in Singapore and Switzerland by Dr Alexander Ressos.
Singapore IV: AML/CFT and Compliance: a part of the book Digital Assets Law in Singapore and Switzerland by Dr Alexander Ressos.
This part belongs to Digital Assets Law in Singapore and Switzerland by Dr Alexander Ressos, published here in full, section by section.
Singapore IV: AML/CFT and Compliance
Anti-money-laundering law is the part of Singapore's digital-asset regime that decides whether a business survives contact with its own customers. Read more Singapore · AML and SanctionsThree statutes and one regulator
Singapore's AML/CFT regime rests on three statutes, each of which does a different job. Read more Singapore · AML and SanctionsThe MAS notices: PSN01, PSN02 and the DTSP notice
The operational AML/CFT duties of a DPT business are set out in MAS notices issued under the PSA. Read more Singapore · AML and SanctionsThe FATF layer
Singapore has been a member of the Financial Action Task Force (FATF) since 1992 and held the FATF Presidency from July 2022 to June 2024 through T. Raja Kumar. Read more Singapore · AML and SanctionsThe national risk assessment and the sector risk of digital assets
Singapore published its first money-laundering national risk assessment in January 2014 and its first terrorism-financing assessment in 2020. Read more Singapore · AML and SanctionsReading the regime as a whole
The compliance officer of a Singapore DPT firm works with five layers at once. The criminal statutes set the offences and the personal exposure. The MAS notice sets the duties. Read more Singapore · AML and SanctionsThe structure of PSN02
MAS Notice PSN02 is organised in the same sequence as every other MAS AML/CFT notice, from the Banking Act notice (MAS Notice 626) to the notices for capital markets intermediaries, trust companies… Read more Singapore · AML and SanctionsThe enterprise-wide risk assessment
Before any customer is onboarded, PSN02 requires the firm to identify and assess the money-laundering and terrorism-financing risks it faces across customers, countries, products, services,… Read more Singapore · AML and SanctionsStandard CDD: identification, verification and purpose
The core of PSN02 is the duty to identify the customer, to verify that identity using reliable and independent sources and to identify and take reasonable measures to verify the beneficial owner. Read more Singapore · AML and SanctionsSimplified CDD
PSN02 allows simplified CDD where the firm has assessed the risk of a customer, product or transaction as low, provided the assessment is documented and consistent with the enterprise-wide risk… Read more Singapore · AML and SanctionsEnhanced CDD
Enhanced CDD is mandatory for three categories and discretionary for a fourth. Read more Singapore · AML and SanctionsScreening
PSN02 requires the firm to screen customers, natural persons appointed to act, connected parties and beneficial owners against relevant lists at onboarding, on a periodic basis and when lists are… Read more Singapore · AML and SanctionsOngoing monitoring
CDD is not complete at onboarding. Read more Singapore · AML and SanctionsReliance on third parties
PSN02 permits a firm to rely on a third party to perform the identification, verification and purpose elements of CDD. Three conditions apply. Read more Singapore · AML and SanctionsRecord-keeping and personal data
Records of CDD, account files, business correspondence and transaction data must be kept for at least five years after the end of the business relationship or the completion of the occasional… Read more Singapore · AML and SanctionsOrigin and purpose
The travel rule is the requirement that information about the originator and the beneficiary of a transfer accompany the transfer itself, so that each institution in the chain and any investigator… Read more Singapore · AML and SanctionsThe Singapore rule: PSN02 on value transfers
PSN02 applies the value-transfer requirements to every DPT transfer that a licensee makes or receives on behalf of a customer, whatever the amount. The information set depends on value. Read more Singapore · AML and SanctionsUnhosted wallets
The hardest case is the transfer to or from a wallet whose keys are held by a private person without any institution behind it. The FATF calls these "unhosted" or "self-hosted" wallets. Read more Singapore · AML and SanctionsCounterparty due diligence
The travel rule only works if the firm knows which institution stands behind the beneficiary address. Read more Singapore · AML and SanctionsThe sunrise problem
The FATF borrowed the "sunrise" image to describe the period during which the travel rule has dawned in some jurisdictions and not in others. Read more Singapore · AML and SanctionsIncomplete and non-compliant transfers
A Singapore licensee that receives a DPT transfer lacking the required information has three lawful responses: execute and follow up, suspend pending information, or reject and return. Read more Singapore · AML and SanctionsData protection in the travel rule
Transmitting a customer's name, address and identification number to a foreign institution is a cross-border transfer of personal data. Read more Singapore · AML and SanctionsWhere the rule is heading
Three developments were visible at the state-of-law date. Read more Singapore · AML and SanctionsThe statutory duty
The duty to report sits in s. 45 of the CDSA and binds every person in Singapore, whether or not they are regulated. Read more Singapore · AML and SanctionsThe PSN02 overlay
For a DPT licensee the statutory duty is supplemented by PSN02. Read more Singapore · AML and SanctionsForming the suspicion: the DPT typologies
What makes a DPT transaction suspicious? Read more Singapore · AML and SanctionsTiming and quality of the report
The statute says "as soon as is reasonably practicable". Read more Singapore · AML and SanctionsAfter the report
Filing an STR does not end the firm's obligations or its exposure. Four questions arise. Read more Singapore · AML and SanctionsThe lawyer's position
Lawyers in Singapore are not exempt from s. 45. The duty applies to knowledge acquired in the course of a profession, of which the profession of law is no exception. Read more Singapore · AML and SanctionsReporting in the group
Where a Singapore DPT licensee is part of a group, the firm must decide how much of an STR may be shared with affiliates. Read more Singapore · AML and SanctionsWhy one case has its own chapter
On 15 August 2023 some four hundred officers of the Singapore Police Force conducted simultaneous raids across the island and arrested ten foreign nationals on charges of money laundering, forgery… Read more Singapore · AML and SanctionsThe facts
The ten accused, nine men and one woman, were born in Fujian province in China and had acquired the citizenship of other countries, among them Cambodia, Cyprus, Vanuatu, Turkey, Dominica and Saint… Read more Singapore · AML and SanctionsWhat went wrong
The Inter-Ministerial Committee established in October 2023 to review the case published its report on 4 October 2024. Read more Singapore · AML and SanctionsThe policy response
The response came in four waves between late 2023 and mid-2025. Read more Singapore · AML and SanctionsThe crypto dimension
The case was not a crypto case in the sense that the public assets were mostly real estate and bank balances. Its lessons for the digital-asset sector are nonetheless direct. Read more Singapore · AML and SanctionsWhat a DPT licensee should take from the case
The committee's report and the 2025 penalties define the standard that MAS now applies to every supervised institution, including DPT licensees. Six points translate directly. Read more Singapore · AML and SanctionsThe case in comparative light
Switzerland has had its own formative cases, from the Abacha and Montesinos funds to 1MDB and Petrobras, and has reacted in each instance with a tightening of due-diligence rules, the most recent… Read more Singapore · AML and SanctionsSingapore's approach to sanctions
Singapore's sanctions policy differs from Switzerland's in a way that a dual-hub compliance programme must take into account from the first day. Read more Singapore · AML and SanctionsUnited Nations sanctions: the legal mechanism
The United Nations Act 2001 empowers the Minister to make regulations to give effect to decisions of the United Nations Security Council under Article 41 of the Charter. Read more Singapore · AML and SanctionsThe Russia measures of March 2022
On 5 March 2022 Singapore announced sanctions against Russia in response to the invasion of Ukraine, acting for the first time in decades without a Security Council mandate. Read more Singapore · AML and SanctionsOFAC and the commercial reality
No Singapore law requires a Singapore DPT licensee to comply with United States sanctions administered by the Office of Foreign Assets Control (OFAC). Read more Singapore · AML and SanctionsScreening practice for a DPT licensee
Sanctions screening at a DPT licensee has three components that a fiat institution's screening lacks or has in simpler form. Read more Singapore · AML and SanctionsProliferation financing
The FATF added a proliferation-financing risk-assessment requirement to Recommendation 1 in October 2020. Read more Singapore · AML and SanctionsSanctions and the lawyer
A lawyer advising a DPT licensee on sanctions in Singapore must hold three jurisdictions in view at once. The Singapore layer determines what is unlawful and what must be frozen and reported. Read more Singapore · AML and SanctionsThe governance that MAS expects
PSN02 closes with the requirements that make everything before it work: internal policies, procedures and controls approved by senior management, a compliance function with adequate resources and… Read more Singapore · AML and SanctionsThe compliance officer
PSN02 requires the appointment of an AML/CFT compliance officer at management level, with sufficient resources, independence and access to information to perform the role. Read more Singapore · AML and SanctionsTechnology risk and cyber hygiene
A DPT licensee's AML/CFT controls run on technology, and MAS regulates that technology through two notices and one set of guidelines that are in practice inseparable from the AML programme. Read more Singapore · AML and SanctionsOutsourcing and third-party risk
Most DPT licensees outsource core parts of their compliance stack: identity verification, sanctions screening, transaction monitoring, blockchain analytics and travel-rule messaging are all… Read more Singapore · AML and SanctionsIndependent audit
PSN02 requires an independent audit function to assess the adequacy and effectiveness of the AML/CFT programme regularly. Read more Singapore · AML and SanctionsMAS inspections
MAS supervises DPT licensees through off-site monitoring of returns and STR copies, through thematic reviews across groups of licensees and through on-site inspections of individual firms. Read more Singapore · AML and SanctionsEnforcement against DPT licensees
MAS's enforcement toolkit under the PSA and the FSMA comprises supervisory directions, licence conditions, composition of offences and reprimands. Read more Singapore · AML and SanctionsTraining, screening of staff and culture
PSN02 requires the firm to screen employees for integrity before hiring and to train them on AML/CFT at induction and regularly thereafter, with content tailored to their roles. Read more Singapore · AML and SanctionsThe problem stated
The typical client of a Swiss–Singapore digital-asset practice is a group. Read more Singapore · AML and SanctionsThe legal basis for a group programme
Both regimes require or assume a group-wide approach, but with different reach. Read more Singapore · AML and SanctionsWhere the regimes diverge
The following table sets out the points at which a group cannot apply one rule to both entities without choosing. Read more Singapore · AML and SanctionsReliance between the entities
The most common operational question is whether one entity may rely on the CDD performed by the other, so that a customer onboarded in Zug can open an account in Singapore without repeating the… Read more Singapore · AML and SanctionsWhich entity serves which customer
Reliance solves the onboarding question but not the structural one: which entity should have the customer relationship at all? Three rules of thumb have emerged. Read more Singapore · AML and SanctionsInformation sharing and its limits
A group programme depends on the two entities knowing what each other knows about shared customers. Four legal constraints shape what may be shared. Read more Singapore · AML and SanctionsA model group protocol
The following elements constitute a group AML protocol that in my experience satisfies both regulators. Read more Singapore · AML and SanctionsThe position of a Swiss SRO member with a Singapore MPI: three recurring questions
Three questions arise so often in this configuration that they deserve direct answers. Read more