Need A Free Consultation? Make An Appointment

Post: AML continues to make headlines in Singapore: impending launch of “COSMIC” by MAS

AML continues to make headlines in Singapore: impending launch of “COSMIC” by MAS

On 15 Aug 2023, Singapore reported one of its biggest AML heists in history when a syndicate of foreigners were arrested for illegally amassing $1 billion worth of assets. MAS has strongly rebuked this episode and combating money laundering, terrorism financing and proliferation financing continue to be key priorities for MAS.

Launch of a New Compliance Platform “COSMIC” 

On 9 May 2023, the Financial Services and Markets (Amendment) Bill was passed to
provide the legal framework for FIs to share information on customers, red flags and potential
financial crime concerns through a secure digital platform called COSMIC.

MAS plans to introduce COSMIC in phases: in the first phase, MAS will make COSMIC
available to the six major Singapore banks and subsequently expand COSMIC’s coverage to
more focus areas and FIs and make sharing mandatory in higher-risk circumstances. We expect more banks to be participating FIs and it remains to be seen if non-banks such as capital markets intermediaries will be in scope further down the line as well.

Recently, MAS has again reiterated its expectations of FIs to stay vigilant to money laundering
risks in wealth management and ensure that fund flows into Singapore remain legitimate. In
its Mar 2023 Circular to FIs, the Regulator called for a strengthening of Board and Senior
Management oversight of ML/TF risks and for senior management to have increased oversight of high growth areas and the associated ML/TF risks.

In addition, FIs should take added steps to review existing CDD practices in high growth areas and quality assurance testing should be conducted on key controls. FIs should be cognizant of the increased risks arising from complex structures and take necessary steps to unveil the ultimate beneficial owners.

Following the recent developments and the inherent risks in having a thriving wealth
management industry, we expect MAS to continue to actively reinforce its AML regulations.
There has been increased focus on addressing emerging risks associated with virtual assets,
cryptocurrencies and digital payment systems. FIs must stay updated on the evolving AML
regulatory landscape to ensure that their AML programs are robust, proactive and capable of
preventing illicit activities.

Key Takeaways

MAS has been conducting inspections focusing on FIs active in the wealth management
space, to ensure that robust controls are in place to effectively detect and deal with ML/TF
risks. FIs should establish robust AML/CFT policies and procedures that incorporate the
following key areas to demonstrate compliance with requirements:

• Risk assessment and risk mitigation
• Customer due diligence
• Reliance on third parties
• Correspondent accounts
• Record keeping
• Suspicious transaction reporting
• Internal policies, compliance, audit and training