AML/CFT Compliance Flashcards

What is 'tipping off' in the context of AML/CFT compliance?

Answer: Disclosing to a customer that an STR has been filed or that they are under investigation for money laundering

Tipping off is the serious offence of disclosing to a person who is the subject of an STR, or to others, that a report has been filed or that an investigation is underway. It is a criminal offence under the CDSA as it could prejudice ongoing investigations.

What is the minimum record retention period for AML/CFT customer due diligence records in Singapore?

Answer: 5 years after the business relationship ends or the transaction is completed

Under MAS Notice requirements aligned with FATF recommendations, financial institutions must retain CDD records and transaction records for a minimum of 5 years after the business relationship ends or the transaction is completed.

What is the risk-based approach to AML/CFT?

Answer: Allocating more rigorous due diligence to higher-risk customers, products, and geographies, and proportionately lighter controls to lower-risk situations

The risk-based approach requires financial institutions to identify, assess, and understand their ML/TF risks, and apply controls proportionate to those risks — more scrutiny for higher-risk situations and streamlined processes for lower-risk ones.

What is a 'beneficial owner' in AML/CFT due diligence?

Answer: The natural person who ultimately owns or controls a legal entity or on whose behalf a transaction is being conducted

A beneficial owner is the natural person (individual) who ultimately owns or controls a legal entity (such as a company or trust) or on whose behalf a transaction is being conducted, even if legal ownership is in the name of another person or entity.

Under the Terrorism (Suppression of Financing) Act, what is criminalised?

Answer: Providing funds, assets, or financial services to terrorists or terrorist entities

The TSOFA criminalises the financing of terrorism in Singapore, including providing or collecting funds, assets, or financial services that are intended or known to be used to carry out terrorist acts, whether the act occurs in Singapore or overseas.

What is a Cash Transaction Report (CTR) and when must it be filed in Singapore?

Answer: A report to STRO required when a cash transaction equals or exceeds S$20,000, or when multiple transactions appear structured to avoid this threshold

CTRs must be filed with STRO for any cash transaction (or multiple related transactions that appear to be structured) equalling or exceeding S$20,000. The threshold applies to the total cash value involved, and structuring to avoid the threshold is itself an offence.