Anti-Money Laundering
Measures on Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF)
Table of Contents
The Anti-Money Laundering Committee of the Law Society provides guidance to members on the anti-money laundering (‘AML’) and countering the financing of terrorism (‘CFT’) requirements that are applicable to lawyers. The Committee also aims to increase awareness by disseminating to members information in relation to these requirements.
If members have any queries relating to the AML and CFT requirements applicable to lawyers, the query may be referred to the Anti-Money Laundering Committee at amlquery@lawsoc.org.sg
Legislation on Prevention of Money Laundering & Financing of Terrorism
The Legal Profession (Amendment) Bill was passed on 4 November 2014 and the new Part VA of the LPA on Prevention of Money Laundering and Financing of Terrorism came into effect together with the Legal Profession (Prevention of Money Laundering and Financing of Terrorism) Rules on 23 May 2015. With this new legislation coming into force, rules 11(D) to 11(I) of the previous Legal Profession (Professional Conduct) Rules > are repealed forthwith. The regulatory framework will apply to both Singapore lawyers and law practices, as well as foreign lawyers and foreign law practices.
Council's Practice Direction on Prevention of Money Laundering & Financing of Terrorism
Click here to download it.
Click here to download a Sample Client Due Diligence Checklist
Click here to download a Sample Firm Wide Risk Assessment Template
Relevant Information from MAS on Targeted Financial Sanctions
The Monetary Authority of Singapore (‘MAS’) Webpage on targeted financial sanctions aims to inform financial and non-financial institutions, and individuals of their obligations under the various domestic legislation enacted to ensure that Singapore complies with its obligations under the United Nations Security Council Resolutions.
As a member of the United Nations (‘UN’), Singapore gives effect to the sanctions under the UN Security Council Resolutions. The sanctions are made legally binding through the Regulations issued pursuant to the UN Act (‘UN Regulations’).
All persons in Singapore have to comply with the UN Regulations. Among other provisions, the UN Regulations prohibit persons in Singapore from dealing with UN-designated individuals and entities. Please refer to MAS’ webpage on Targeted Financial Sanctions for more information on your obligations under the UN Regulations. Any breach of the regulations could subject an individual to a fine not exceeding $500,000 or to imprisonment for a term not exceeding 10 years or to both; or in any other case, to a fine not exceeding $1 million.
You may subscribe to the AML/CFT and Targeted Financial Sanctions section of the MAS website. Doing so will alert you to changes to the lists of UN designated individuals and entities, and help you stay abreast of other relevant announcements, such as high risk jurisdictions identified by the Financial Action Task Force (‘FATF’).
Anti-Money Laundering (AML) and Countering Terrorism Financing (CTF) E-Learning Course
This e-learning course was specifically developed for legal professionals. The course consists of 5 modules which cover the relevant legislation, frameworks, and provide guidance on AML and CTF.
For more information and to register for the course, please click HERE.
Info on High Risk Countries/ Jurisdictions & High Risk Individuals/ Entities
In considering whether the risks of money laundering and the financing of terrorism are raised (under Rule 12(4) and Rule 13(1)(a) of the Legal Profession (Prevention of Money Laundering & Financing of Terrorism) Rules, including determining whether the client is from or in any country or jurisdiction known to have inadequate measures to prevent money laundering and the financing of terrorism, you should refer to the following links:
- Link to MAS’ website on targeted financial sanctions
- FATF’s website link of high risk and non-cooperative countries
- The List established and maintained by the Committee pursuant to resolutions 1267 (1999), 1989 (2011) and 2253 (2015) concerning ISIL (Da’esh) Al-Qaida and associated individuals groups undertakings and entities
- The List established and maintained by the Committee established pursuant to resolution 1988 (2011) with respect to individuals, entities, groups, or undertakings
- Ministry of Home Affairs Alert List (List of persons known to have been involved in terrorism or terrorism financing related activities)
- (click ‘for Lawyers’ > ‘Members Library’ > [Log in with your ID and Password] > ‘Regulatory Matters’ > ‘Anti-Money Laundering’)
Counter Terrorist Trends & Analyses
Additional Materials & Guidance
Relevant material and links on Anti-Money Laundering and Crypto Risk Management:
- The 2022 Crypto Crime Report – Chainalysi
- Singapore’s 2024 Proliferation Financing (“PF”) National Risk Assessment and Counter-PF Strategy
- Money Laundering and Terrorism Financing Risk Assessment of Legal Persons in Singapore 2024
- Money Laundering and Terrorism Financing Risk Assessment of Legal Arrangements in Singapore 2024
- Virtual Assets Risk Assessment Report Singapore 2024
- Basel AML Index 2021
- FATF Updated Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers
- JMLSG Guidance RE Cryptoasset Exchange Providers and Custodian Wallet Providers
- Legal Sector Affinity Group AML Guidance for the Legal Sector 2021
- Singapore Terrorism Financing (TF) National Risk Assessment (NRA) 2020
- Inter-Ministerial Committee on Anti -Money Laundering Report (Oct 2024)
- Money Laundering National Risk Assessment Singapore June 2024
- Terrorism Financing National Risk Assessment Singapore 2024
- Enviromental Crimes Money Laundering National Risk Assessment 2024
- A Lawyer’s Guide to Detecting and Preventing Money Laundering
- Establishing the Source of Wealth of Customers – MAS 26 July 2024
- Guidelines – Legal Practitioners / Law Practices (2020 – 2022) – Suspicious Transaction Reporting Office
- FATF Guidance on Beneficial Ownership and Transparency of Legal Arrangements – March 2024
- Risks associated with receiving referrals from corporate service providers
- List of red flags indicators from the Suspicious Transaction Reporting Office
- Strengthening AML/CFT Controls and Practices to Detect and Mitigate Risks of Misuse of Legal Persons/Arrangements and Complex Structures -MAS (August 2023)
- Illicit Financial Flows from Cyber-Enabled Fraud (November 2023) -FATF-Interpol-Egmont Group
- National Strategy for Countering the Financing of Terrorism (CFT) 2022
- FATF Guidance on Beneficial Ownership for Legal Persons (March 2023)
- MAS – Sound Practices to Counter Proliferation Financing August 2018
- FATF Guidance for a Risk-Based Approach to the Real Estate Sector (July 2022)
- Updated Guidance for a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers (October 2021)
- The Corporate Tax Haven Index is a ranking of jurisdictions most complicit in helping multinational corporations underpay corporate income tax. < 2021 Results>
- FATF – Trade-Based Money Laundering: Trends and Developments, December 2020
- FATF – Guidance on proliferation financing risk assessment and mitigation June 2021
- FATF Guidance on Counter Proliferation Financing February 2018
- Terrorism Financing National Risk Assessment 2020 – Singapore’s key terrorism financing risk areas
- Trade Based Money Laundering Risks for Law Practices (May 2020).pdf
- The Department of State’s International Narcotics Control Strategy Report is the United States Government’s country-by-country two volume report that describes the efforts to attack all aspects of the international drug trade, chemical control, money laundering and financial crimes. Please click here for the reports
- The FATF Recommendations and the FATF Methodology for Assessing Technical Compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems.
- FATF – Public Statement, 18 October 2019
- The FATF Best Practices On Beneficial Ownership for Legal Persons, October 2019
- The FATF Risk Based Approach Guidance for Legal Professionals, updated on June 2019
- FATF – Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals, June 2013
- FATF Guidance – Politically Exposed Persons (Recommendations 12 and 22), June 2013
- Singapore National Money Laundering and Terrorist Financing Risk Assessment Report 2013
Anti-Money Laundering Advisory
21 April 2018 – The Singapore government takes a firm and robust stance against money laundering activities. In this regard, the Council of the Law Society would like to remind all members of their statutory obligation under section 39(1) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (‘CDSA’) to report a suspicious transaction to the authorities.
Section 39(1) of the CDSA reads:
“Where a person knows or has reasonable grounds to suspect that any property –
- in whole or in part, directly or indirectly, represents the proceeds of;
- was used in connection with; or
- is intended to be used in connection with,
any act which may constitute drug dealing or criminal conduct, as the case may be, and the information or matter on which the knowledge or suspicion is based came to his attention in the course of his trade, profession, business or employment, he shall disclose the knowledge or suspicion or the information or other matter on which that knowledge or suspicion is based to a Suspicious Transaction Reporting Officer as soon as is reasonably practicable after it comes to his attention.”
In summary, if you know or have reasonable grounds to suspect that any property may be connected with a criminal activity, you are obliged to file a Suspicious Transaction Report (‘STR’). Suspicious transaction reports should be lodged with the Commercial Affairs Department (‘CAD’). Please refer to the CAD’s website for more information.
Should you require any assistance or have any clarifications or queries relating to the above, please feel free to e-mail compliance@lawsoc.org.sg
Suspicious Transaction Reporting
Pursuant to section 70D of the Legal Profession Act, where a legal practitioner or law practice knows or has reasonable grounds to suspect that any property was or is intended to be used in connection with drug dealing or criminal conduct, as set out in section 39(1) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (‘CDSA’), the legal practitioner or law practice must disclose the matter to a Suspicious Transaction Reporting Officer under the CDSA by way of a suspicious transaction report; or an authorised officer under the CDSA.
There is also a duty under section 8(1) of the Terrorism (Suppression of Financing) Act for every person in Singapore and every citizen of Singapore outside Singapore who has (inter alia) information about any transaction or proposed transaction in respect of any property belonging to any terrorist or terrorist entity, to file a suspicious transaction report.
For more information on suspicious transaction reporting, please refer to Part VA of the Legal Profession Act and the Legal Profession (Prevention of Money Laundering and Financing of Terrorism) Rules 2015.
In practice, a suspicious transaction report can be made directly to the Suspicious Transaction Reporting Office, which is the central agency in Singapore for the receipt, analysis and dissemination of suspicious transaction reports, under the Commercial Affairs Department (‘CAD’) of the Singapore Police Force. A suspicious transaction report should be filed electronically using the e-filing system provided by STRO to file STRs.
Electronic Filing of Suspicious Transaction Reports on the STRO Online Notices & Reporting platform ('SONAR')
The Suspicious Transaction Reporting Office (‘STRO’) of Commercial Affairs Department (‘CAD’) has launched a new e-services platform – the STRO Online Notices and Reporting platform (‘SONAR’). SONAR allows businesses and their employees to file Suspicious Transaction Reports (‘STRs’), Cross Border Cash Movement Reports (CMRs – NP 728) and Cash Transaction Reports (CTRs – NP 759) to STRO on a consolidated platform. It replaces the existing Suspicious Transaction Report Online Lodging System (STROLLS) and Electronic 728 (E728). Along with the launch, three electronic forms have been introduced on SONAR:
- Form NP 728 for CMRs;
- Form NP 759 for CTRs; and
- A new form for STRs.
To file STRs on the new SONAR platform, you will need:
- Adobe Acrobat reader software for your law practice’s designated SONAR users;
- CorpPass account for your law practice;
- Access to the CorpPass account for your law practice’s designated SONAR users (select ‘SPF E-Services (G2B)’);
- SONAR accounts for your law practice’s designated SONAR users (they will need their CorpPass account details to apply for SONAR accounts).
Members are required to lodge all STRs electronically.
Should you have any inquiries regarding the E-filing of STR, please contact the SONAR team at SPF_STRO_IT_Team@spf.gov.sg
For the STR Form and filing instructions, you can visit the following websites:
FAQ
FAQ guidance from the Suspicious Transaction Reporting Office of CAD on Lodging a Suspicious Transaction Report
The Suspicious Transaction Reporting Office (‘STRO’) of the Commercial Affairs Department has compiled a set of Frequently Asked Questions to provide guidance to the legal profession in the area of lodging a suspicious transaction report (‘STR’).
After filing a STR, must a law practice or a lawyer seek the consent of STRO or seek its directions, before proceeding with the transaction for the client?
There is no requirement in the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 for STR filers to seek the consent of STRO or to seek STRO’s directions before proceeding with the transaction for the client.
Is there is a moratorium following the filing of a STR during which a law practice or a lawyer cannot proceed with the transaction for the client?
There is no moratorium on transacting for the client after the filing of a STR.
After a law practice or a lawyer has filed a STR on the client, how long must the lawyer wait before he can continue acting for this client?
There is no provision in the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 prescribing a period during which a lawyer cannot act for a client after a STR has been filed on the client. STR filers may wish to conduct their business relationship with the client in accordance with their internal risk management policies and standards of prudence. If STR filers have any queries after a STR has been filed, the STR filer can contact STRO at stro@spf.gov.sg. In cases where queries relate to STRs that STRO has disseminated the information to law enforcement agencies or foreign financial intelligence units, STRO may require more time to respond.
Can a law practice or a lawyer continue the relationship with the client after a STR has been filed on the client?
The decision whether or not to continue the relationship with the client should depend on the internal risk management policies and standards of prudence of the law firm. A STR filer may decide to terminate the client relationship when the commercial or reputational risks are high. The lawyer should determine whether these circumstances, separately or together, provide reasonable grounds to suspect that the cash funds proffered by the client could be connected with criminal conduct. The lawyer should immediately file a STR if there is reason to suspect the funds is linked to criminal activity. The lawyer may then want to consider whether there is a commercial or reputational risk in continuing with the client relationship.
After a law practice or a lawyer files a STR, how does the lawyer tell the client that he cannot continue to represent him, without tipping off the client?
When a law practice or a lawyer decides to terminate the client relationship, they should not inform the client or any third party that a STR has been filed. This may constitute a tipping off, an offence under section 57 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992. The law practice or lawyer should give an appropriate reason to the client for terminating their relationship. The law firm could, for example, cite compliance requirements as a reason:
- Risk Management or Compliance Department instructs to decline representation. We are unable to give details.
- The matter did not accord with internal risk management policies and we are unable to give details.
Can the STR filer discharge his client without incurring liability under the 'no-tipping off' provision?
When a law practice or a lawyer decides to terminate the client relationship, they should not inform the client or any third party that a STR has been filed. This may constitute a tipping off, an offence under section 57 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992. The law practice or lawyer should give an appropriate reason to the client for terminating their relationship. The law firm could, for example, cite compliance requirements as a reason:
- Risk Management or Compliance Department instructs to decline representation. We are unable to give details.
- The matter did not accord with internal risk management policies and we are unable to give details.
What kind of action can the STR filer take after the STR is filed?
After a STR is filed with STRO, no further action is required of the STR filer. STR filers may wish to conduct their business relationship with the client in accordance with their internal risk management policies and standards of prudence. Where required, STRO may request for further information from STR filers.
In the following situation, would the STR filer have any protection from liability?
**STRO noted that there is no answer provided to this question in the FAQs. STRO is of the view that Law Society is best placed to provide the answer. We would like to highlight that section 45(7) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992 provides that the disclosure of information when filing a STR does not breach any restriction imposed by law, contract or rules of professional conduct and the person shall not be liable for any loss arising out of the disclosure or any act or omission in consequence of the disclosure.
After a STR is filed, will STRO notify the filer of the outcome?
An acknowledgement email will be sent to the STR filer after a STR is submitted on SONAR. Subsequently, STR filers may check on the status of the STR on SONAR.
SLG Article: Setting the Tone - Policies to Prevent Money Laundering
Click here to download it.
AML & CFT Industry Partnership Best Practices Papers
1. Best Practices for Countering Trade Based Money Laundering
This paper is produced by the Anti-Money Laundering (‘AML’) and Countering the Financing of Terrorism (‘CFT’) Industry Partnership (ACIP) working groups on Trade-Based Money Laundering (‘TBM’L). It highlights common TBM’red flags’ and recent typologies and sets out industry best practices for the identification and mitigation of TBML risks.
2. Legal Persons – Misuse Typologies and Best Practices
This paper is produced by the ACIP working groups on Legal Persons. It highlights recent typologies involving the misuse of companies and other legal persons. The paper also highlights the ‘red flags’ that led to detection of these typologies, and sets out industry best practices that could detect or prevent such abuses.
AML Survey 2018 Industry Report
In October 2018, the Law Society working with Accuity, a global provider of risk and compliance, payments and know-your-customer solutions, conducted a survey among both Singapore law practices and foreign law practices to understand and identify the challenges facing law firms in meeting their AML obligations.
The key findings of the survey are highlighted in the Industry Report below.
AML Survey 2018 Industry Report: The Challenges of AML for Law Firms in Singapore 2019
The report identifies the areas that law firms find challenging in meeting their AML obligations.
