An insight in overall AML Controls: Tackling ML/FT risks with Risk-Based Approach

The AML regulations in Singapore provide for adopting the Risk-Based Approach, enabling the regulated entities in Singapore to deploy the risk mitigation measures proportionate to the risk rather than following a general or “one-size-fits-all” approach.

Here is an infographic highlighting the critical controls that a regulated entity in Singapore must implement to combat the money laundering and terrorism financing risks, in line with the Risk-Based Approach:

1. Developing the AML compliance program, which aligns with assessed financial crime risk
2. Appointing a competent AML compliance officer to ensure effective implementation of the Internal Policies, Procedures, and Controls (IPPC)
3. Adopt the Know Your Customer (KYC) process to identify the customers
4. Implement strong Customer Due Diligence (CDD) measures to assess the customer risk and deploy adequate due diligence measures to manage the risk (including Enhanced Due Diligence measures)
5. Continuously monitor the transactions to detect any suspicious activity
6. Conducting PEP screening to identify if the customer is a Politically Exposed Person or a close relative or associate thereof
7. Identification of the beneficial owners when dealing with corporate clients or legal arrangements
8. Developing a robust AML Training Program for the team, including senior management
9. Maintaining all the relevant AML records in an organized manner for the prescribed period
10. The Senior management must review and approve the IPPC and oversee the implementation of the AML/CFT program
11. The customers and their beneficial owners must be regularly monitored to check for any available adverse media, as this impacts the overall risk profile of the customer
12. Timely reporting of red flags to Singapore’s Suspicious Transaction Reporting Office (STRO)

A comprehensive AML framework is necessary to fight back against financial crimes. Here is AML Singapore, a leading AML consultancy firm, to assist the regulated entities in developing robust AML controls aligned with the regulatory requirements and the outcome of the Enterprise-Wide Risk Assessment.