Singapore’s banking regulator is expected to focus its anti-money laundering (AML) efforts in 2016 on flaws found inthe trade finance and correspondent banking systems.

The Monetary Authority of Singapore (MAS) is expected to act on its findings published in MAS Notice 626 that link a lack of attention in some areas and poor practices in others to trade-based money laundering.

L/C discrepancies

The regulator found that some banks issued letters ofcredit (L/Cs) with unnamed ports of loading and discharge when shipping routes were not confirmed at the point of L/Capplication.

When this happens, MAS said banks should subsequently gather supportingdocuments to identify portsof loading and discharge.

“Banks should follow up with their customers toobtain commercial invoices and transport documents and performverification checks to ensure that trades are genuine,” MAS added.

Correspondent banks

In respect of correspondent banks, the regulator said Singaporean banks should be morevigilant in tracking adverse news on correspondent financial institutions.

Banks should conduct due diligence on branches and subsidiaries within a correspondent banking group, and it is not sufficient to only conduct due diligence on the parent bank, the regulator concluded.

MAS Notice 626 can be found here

Categories: Trade Based Financial crimes News