Regulation Name: Customer Due Diligence Guidelines
Publishing Date: April 2024
Region:  Singapore
Agency: Anti Money Laundering Office

In April 2024, the Anti-Money Laundering Office (AMLO) introduced five new Customer Due Diligence Guidelines (CDD), tailored for various business sectors. These Guidelines aim to clarify the recommended practices under the Ministerial Regulation on Customer Due Diligence, B.E 2563 (2020), enhancing compliance and regulatory standards.

Background

Previously, in 2022 and 2023, AMLO issued CDD guidelines for banks, securities businesses, money changers, cooperatives, and asset management companies. The new Guidelines, however, are focused on businesses categorized as “reporting entities” under sections 3 and 16 of the Anti-Money Laundering Act, B.E. 2542 (AML Act).

Targeted Sectors

The 2024 Guidelines provide comprehensive customer due diligence practices for the following sectors:

1. Digital Asset Businesses: This includes digital asset exchanges, brokers, dealers, advisory services, fund managers, custodial wallet providers, and ICO portals.

2. Payment Service Providers: Entities operating under the payment systems law.

3. Money Transfer Agents: Businesses functioning under the exchange control law.

4. Insurance Companies: Both life and non-life insurance businesses.

5. Designated Professions: This includes professionals advising on investments or fund movements under securities law, traders of precious stones and metals, car dealers, real estate brokers, pre-owned goods traders, and personal loan businesses.

Key Elements of the Guidelines

The Guidelines elaborate on regulatory requirements specified in the Ministerial Regulation on CDD and its sub-regulations. They detail AMLO’s expectations for each business type, covering aspects such as:

– AML policy development
– Risk assessment procedures
– Customer and ultimate beneficial owner (UBO) identification and verification
– Transaction monitoring
– Enhanced customer due diligence
– Reliance on third parties for CDD
– Transaction reporting

Annex and Risk Assessment

A significant component of the Guidelines is the Annex, which provides methodologies and examples of product risk assessment tailored to each business type. These assessments help businesses identify specific risk factors associated with their products and establish appropriate standards for customer identification and verification processes.

Implementation and Compliance

While the Guidelines are not legally binding, they are crucial for compliance as AMLO inspectors use them as a reference during audits. Therefore, business operators are strongly encouraged to integrate the recommended practices into their CDD processes to meet regulatory expectations effectively.

By diligently applying these Guidelines, businesses can ensure robust anti-money laundering measures, thereby safeguarding against financial crimes and maintaining regulatory compliance.

Read the full amendment here.