Instrument and designated activities
These 27-page Rules were made 31 May 2023, published 1 June and commenced 1 July 2023. They apply to accounting entities and their individual practitioners preparing or carrying out, by way of business, client transactions for property purchase/sale, management of money/securities/assets or accounts, organisation of company contributions, creation/operation/management of legal persons or arrangements, and business-entity purchase/sale. Occasional transactions are included in the business-relationship definition. They require diligence against money laundering and terrorism financing and cooperation with enforcement authorities. This is the 2023 instrument, not a consolidation of any later amendments.
CDD triggers and the risk-sensitive extent
Perform CDD when establishing a relationship, suspecting laundering/terrorism financing or doubting earlier identification information. For existing clients, repeat at appropriate risk-sensitive times, considering prior checks, their date and adequacy. Identify and verify the client and agent through reliable independent sources, identify beneficial owners and reasonably verify them, understand ownership/control and the purpose and intended nature of the relationship. Determine scope according to client, relationship, product or transaction risk and be able to justify its appropriateness to the Registrar. Ongoing monitoring must similarly be risk-sensitive and demonstrable.
Client, agent and governing-person information
Record names including aliases, individual ID/birth-certificate/passport or entity registration number, residential/business/registered-office address and telephone, birth/incorporation/registration date and nationality or jurisdiction. Also identify all company/foreign-company directors, sole proprietors and partners, or other entities’ executive-authority holders as applicable. Verify these people and the agent’s authority before establishing the relationship unless the conditional rule 8 deferral applies, and retain verification documents. Connected parties for screening include directors/executives, partnership partners, LLP/LP partners or managers, and legal-arrangement executives.
Beneficial-owner hierarchy and legal arrangements
For corporate clients, identify individuals ultimately owning all assets or undertakings, alone or together; if ownership does not establish the beneficial owner or none is identified, identify ultimate/effective controllers, then executive-authority holders if neither earlier route identifies anyone. Understand the ownership and control structure. For express trusts, identify settlors, trustees, any protector, beneficiaries or beneficiary classes, and ultimate owners/controllers through chains; other arrangements use equivalent persons. The definition also includes an individual on whose behalf the client engages the accounting service. The Rules do not impose a universal 25% ownership test in these provisions.
Limited beneficial-owner inquiry exemptions
Inquiry may be omitted for SGX-listed entities, entities listed on suitably regulated foreign exchanges, Singapore financial institutions, overseas financial institutions supervised to FATF-consistent standards, and investment vehicles managed by qualifying institutions. The exception fails if information is doubtful or laundering/terrorism-financing suspicion exists, and the basis for qualification must be recorded in writing. It is an inquiry exception, not a blanket exemption from all CDD. A trustee forming a relationship with a specified person must disclose trustee capacity, subject to applicable trustee confidentiality law.
Verification deferral and screening
Verification may follow relationship establishment only where deferral is essential to avoid interrupting normal operations and risks can be effectively managed. Adopt internal policies controlling the conditions and finish verification as soon as reasonably practicable. Screen clients, agents, connected parties and beneficial owners against relevant information, including Registrar and enforcement lists and any further sources directed by the Registrar. Neither urgency nor a planned later check alone satisfies the two cumulative deferral conditions.
Third-party reliance retains responsibility
A third party must be supervised for FATF-consistent AML/CFT and suspicious-transaction requirements, have adequate controls, not be prohibited by the Registrar and be able and willing to supply CDD material without delay. Assess its operating-country risk and document the compliance and country-risk basis. Obtain CDD documents/data immediately after the third party obtains them. Outsourcing ongoing monitoring is prohibited unless the third party is within the group or network. The entity and practitioner remain responsible even when reliance is allowed.
Simplified CDD requires supported low risk
Low risk must be supported by adequate analysis, and simplified measures must still effectively identify and verify clients, agents and beneficial owners in proportion to risk. Do not simplify where FATF countermeasures apply, the jurisdiction has inadequate AML/CFT controls or suspicion exists. A specified Singapore financial institution may qualify subject to these restrictions. Record the risk assessment, its date and the nature of simplified measures. Simplification changes the intensity of checks; it does not mean dispensing with identity and ownership verification.
PEPs, family and associates
PEPs include present or former prominent domestic, foreign and international-organisation officials, their immediate family and close associates, excluding middle/junior officials. Family includes spouses, children including adopted/stepchildren, siblings including adopted/stepsiblings, parents and stepparents. Associates include partners, employer/employee, fellow corporate officers, employees of the same person, reciprocal instruction relationships and joint arrangements to engage services. Enhanced CDD and monitoring are the baseline. A risk-sensitive approach is allowed for domestic, international-organisation and former PEPs and their family/associates, considering continuing influence, but not for high-risk relationships. Internal controls must identify PEP status for clients, agents and beneficial owners.
Other high-risk and non-face-to-face cases
Enhanced measures apply to complex or unusually large transactions, unusual patterns without visible lawful/economic purpose, inadequately controlled jurisdictions, other assessed high-risk clients/transactions and FATF-countermeasure jurisdictions. Depending on circumstances, enhanced CDD examines purpose/background, obtains senior-management approval, establishes wealth and funds sources and records findings. Non-face-to-face clients require specific adequate compensating measures: additional identity material, supplementary verification/certification or Singapore-financial-institution certification, or first payment through a Singapore-financial-institution account in the client’s name. Enhanced ongoing monitoring increases frequency.
Incomplete CDD and five-year relationship records
If any required CDD, including simplified/enhanced measures, cannot be completed, do not establish or continue the relationship and do not transact for the client. Consider disclosure under CDSA45(1) and/or Terrorism (Suppression of Financing) Act 8/10. Retain identity evidence and supporting relationship records, including electronic copies, for at least five years from the relationship’s end. Records must reconstruct individual transactions, including amounts and currencies. This retention clock differs from a five-year period beginning when a single identity document was collected.
Firm controls, new technology and overseas groups
Maintain risk-sensitive policies covering CDD/monitoring, reporting, records, risk management, audit, compliance communication, hiring/training and group policy. Assess new services, delivery methods and technologies before launch/use, especially those favouring anonymity, and mitigate risks. Group programmes must permit CDD/risk-information sharing with confidentiality safeguards. Overseas branches/subsidiaries in weak-control jurisdictions must observe programmes as local law permits; where foreign minima are weaker, apply Singapore standards as permitted, or additional risk measures if local law prevents them. Regularly assess effectiveness and demonstrate it if required.
Independent audit, compliance officer, employees and Registrar information
Maintain an independent audit function that regularly tests controls and compliance, ongoing compliance management and a management-level employee/officer responsible for AML/CFT. Give the officer and assistants timely access to relevant client records. Screen hires for fit-and-proper status and train employees in Singapore and abroad on law, methods/trends, internal controls and their roles. Screening-procedure records last at least five years from implementation and training records five years from the employee’s training end. Supply the Registrar’s requested activity information at the specified times and within specified periods.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗