5. The principal Rules are amended by inserting, immediately after rule 6, the following rules:6A.—(1) For the purposes of ensuring compliance with the laws for the prevention of money laundering and terrorism financing, and to determine if there are any risks of money laundering or terrorism financing in any business relation or transaction or proposed business relation or transaction, a moneylender must —(a) | evaluate every borrower and every agent, connected party and beneficial owner of a borrower, to determine if they are terrorists or terrorist entities within the meaning of the Terrorism (Suppression of Financing) Act (Cap. 325); and | (b) | screen every borrower and every agent, connected party and beneficial owner of a borrower, against —(i) | lists and information provided by the Registrar and any relevant law enforcement authority; and | (ii) | such other source of information relating to money laundering and terrorism financing as the Registrar may direct. |
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(2) A moneylender must carry out the measures in paragraph (1) —(a) | at the time the moneylender intends to grant, or is considering the grant of, a relevant loan to a borrower; | (b) | on a periodic basis after the moneylender establishes a business relation with a borrower; | (c) | whenever there is a change of or an update to the lists and information provided by the Registrar or any relevant law enforcement authority to the moneylender; and | (d) | whenever there is any change to an agent of a borrower, a connected party of a borrower or a beneficial owner of a borrower. |
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(3) A moneylender must also carry out the measures in paragraph (1) in accordance with rule 6C. |
(4) A moneylender must document the results of the evaluation and screening of, and any determination made by the moneylender concerning the risks of money laundering or terrorism financing in relation to, a borrower or any agent, connected party or beneficial owner of a borrower. |
(5) A moneylender who contravenes paragraph (1)(a) or (b), (2), (3) or (4) shall be guilty of an offence. |
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6B.—(1) A moneylender must also perform the measures mentioned in paragraph (2) in accordance with that paragraph, on each existing borrower, and each agent, connected party or beneficial owner of an existing borrower, based on the moneylender’s own assessment of materiality and risk of money laundering and terrorism financing, and taking into account —(a) | any CDD measures previously performed on that borrower, agent, connected party or beneficial owner, including any measures performed before 1 September 2015 in accordance with these Rules in force before that date; | (b) | the time those measures were last applied; and | (c) | the adequacy of the documents and information obtained from such previous application. |
(2) For the purposes of paragraph (1), the moneylender must —(a) | perform those initial CDD measures that are applicable to the borrower, agent, connected party or beneficial owner, in accordance with rule 6(3); | (b) | perform those ongoing CDD measures that are applicable to the borrower, agent, connected party or beneficial owner, in accordance with rule 6(3A); and | (c) | perform those measures mentioned in rule 6A(1) that are applicable to the borrower, agent, connected party or beneficial owner, in accordance with rule 6A(2), (3) and (4). |
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(3) A moneylender who contravenes paragraph (1) or (2)(a), (b) or (c) shall be guilty of an offence. |
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General obligations for all CDD measures |
6C. In performing any CDD measure, a moneylender must —(a) | pay special attention to all complex transactions, unusually large transactions, or unusual patterns of transactions that have no apparent or visible economic or lawful purpose; and | (b) | to the extent possible, inquire into the background and purpose of those transactions, and document the findings with a view to making this information available to the relevant law enforcement authorities should the need arise. |
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6D.—(1) A moneylender may, instead of performing initial CDD measures in accordance with rule 6(3), or ongoing CDD measures in accordance with rule 6(3A), on a particular borrower or an agent, a connected party or a beneficial owner of the borrower, perform simplified CDD measures on the borrower, agent, connected party or beneficial owner, if —(a) | the moneylender is of the view that the risks of money laundering and terrorism financing are low; | (b) | either —(i) | the moneylender has obtained the prior written approval of the Registrar to do so; or | (ii) | the borrower, agent, connected party or beneficial owner comes within a class or description of borrowers, or agents, connected parties or beneficial owners of borrowers, designated by the Registrar for the purposes of this paragraph; |
| (c) | the moneylender documents —(i) | the details of the risk assessment undertaken; and | (ii) | the nature of the simplified CDD measures applied; |
| (d) | the simplified CDD measures are commensurate with the level of the risks of money laundering and terrorism financing identified by the moneylender; and | (e) | where sub-paragraph (b)(i) applies, the moneylender complies with all conditions and restrictions imposed by the Registrar when giving the written approval. |
(2) The Registrar must not grant written approval under paragraph (1)(b)(i) if the borrower, or any agent, connected party or beneficial owner of the borrower, is from or in a country outside Singapore —(a) | in relation to which the FATF has called for countermeasures; or | (b) | known to have inadequate measures for the prevention of money laundering or terrorism financing. |
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(3) The Registrar may refuse to grant written approval under paragraph (1)(b)(i) if the Registrar is satisfied that —(a) | the risks of money laundering or terrorism financing are high; or | (b) | the simplified CDD measures proposed by the moneylender will not effectively achieve the objective of any CDD measure. |
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(4) In this rule, simplified CDD measures are such measures as the moneylender considers adequate to effectively identify and verify the identities of the borrower and the agent, connected parties and beneficial owner of the borrower. |
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Enhanced CDD measures for politically-exposed persons |
6E.—(1) A moneylender must, in addition to the obligations under these Rules, perform the measures referred to in paragraph (2) on a borrower, if the moneylender knows or has reasonable grounds to believe that —(a) | the borrower or the borrower’s agent (if any) is a politically-exposed person; or | (b) | where the borrower is an entity or a legal arrangement, the borrower has a connected party or beneficial owner who is a politically-exposed person. |
(2) The measures referred to in paragraph (1) are —(a) | documenting, during the course of the business relation or when undertaking a transaction with or for the borrower, each movement of funds in the account used for disbursing or repaying a loan, and assessing the likelihood of the account being used in connection with any money laundering or terrorism financing activity; and | (b) | establishing by appropriate and reasonable means the source of wealth and source of funds of the borrower or beneficial owner. |
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(3) A moneylender who — (a) | has identified any borrower or any agent, connected party or beneficial owner of a borrower to be a politically-exposed person; or | (b) | subsequently comes to know that any borrower or any agent, connected party or beneficial owner of a borrower is or was a politically-exposed person, |
must obtain a decision from the moneylender’s senior management on whether to establish or maintain the business relation with the borrower. |
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(4) The moneylender must keep a written record of the moneylender’s findings and the basis of a decision under paragraph (3), and must produce these to a relevant law enforcement authority upon demand. |
(5) A moneylender may adopt a risk-based approach in the application of measures under this rule in relation to —(a) | a domestic politically-exposed person; | (b) | a politically-exposed person of an international organisation; or | (c) | a politically-exposed person who has stepped down from a prominent public function, taking into consideration the level of influence the person continues to exercise after stepping down from that function. |
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(6) Paragraph (5) does not apply if the moneylender knows or ought reasonably to know that the business relation or transaction in question presents a high risk of money laundering or terrorism financing. |
(7) A moneylender who contravenes paragraph (1), (3) or (4) shall be guilty of an offence. |
(8) In this rule, each reference to a politically-exposed person includes a reference to a family member or close associate of the person. |
(9) In this rule, “family member”, in relation to a politically-exposed person, means a parent, a step-parent, a child, a stepchild, an adopted child, a spouse, a sibling, a stepsibling or an adopted sibling of the person. |
(10) In this rule, a person, (A), is a close associate of a politically-exposed person, (B), if —(a) | A is a partner of B; | (b) | A is an employee or employer of B; | (c) | A is an officer of any corporation of which B is an officer; | (d) | A is an employee of an individual of whom B is an employee; | (e) | A is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B; | (f) | B is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of A; | (g) | A is a person with whom B has an agreement or arrangement, whether oral or in writing and whether express or implied, to act together to apply for or obtain a loan from a moneylender; or | (h) | A is closely connected with B socially or professionally in any manner not specified in sub-paragraphs (a) to (g). |
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Enhanced CDD measures in other cases |
6F.—(1) A moneylender must also perform the measures referred to in rule 6E(2) in respect of —(a) | all complex or unusually large relevant loans or unusual patterns of relevant loans that have no apparent or visible economic or lawful purpose; | (b) | relevant loans granted to any person —(i) | from or in countries outside Singapore in relation to which the FATF has called for countermeasures, as notified by the Registrar; or | (ii) | from or in countries outside Singapore known to have inadequate measures for the prevention of money laundering or terrorism financing, as determined by the moneylender or as notified to moneylenders generally by the Registrar, a relevant law enforcement authority or a relevant foreign regulatory authority; and |
| (c) | any other categories of borrowers, agents, connected parties or beneficial owners of borrowers, or relevant loans which the moneylender considers may present, or are notified by the Registrar, a relevant law enforcement authority or a relevant foreign law enforcement authority as presenting, a high risk of money laundering or terrorism financing. |
(2) A moneylender must, in performing the measures under paragraph (1), take into account the requirements of the Act, any subsidiary legislation made under the Act, and any regulations made under section 2 of the United Nations Act (Cap. 339). |
(3) A moneylender who contravenes paragraph (1) shall be guilty of an offence. |
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Performance of CDD measures by third parties |
6G.—(1) Except as provided in paragraph (2), a moneylender must not rely on a third party to perform any CDD measure.(2) A moneylender may rely on a specified third party to perform initial CDD measures, if and only if — (a) | the moneylender has obtained the prior written approval of the Registrar to do so; and | (b) | the moneylender complies with all conditions and restrictions imposed by the Registrar when giving the approval. |
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(3) The Registrar may refuse to grant approval under paragraph (2)(a) unless the moneylender can satisfy the Registrar that — (a) | the specified third party is subject to, and supervised for compliance with requirements relating to, the prevention of money laundering and terrorism financing consistent with standards set by the FATF, and has adequate measures in place to comply with those requirements; | (b) | the specified third party is not one which moneylenders have been precluded by the Registrar from relying on to perform CDD measures; | (c) | the information to be obtained by the specified third party from performing CDD measures can be relayed to the moneylender without delay; | (d) | the specified third party is able and willing to provide without delay, upon the request of the moneylender, any document obtained by the specified third party from performing any CDD measure; and | (e) | the moneylender has taken appropriate steps to identify, assess and understand the risks of money laundering and terrorism financing particular to any country outside Singapore that the specified third party operates in (if applicable). |
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(4) A moneylender who relies on a specified third party to perform any CDD measures must obtain from the specified third party the information obtained by the specified third party from those measures as soon as practicable after the specified third party has performed those measures. |
(5) To avoid doubt, despite relying on a specified third party to perform any CDD measure, the moneylender remains responsible for the performance of that measure under these Rules. |
(6) A moneylender who contravenes paragraph (1) or (4) shall be guilty of an offence. |
(7) In this rule, “specified third party” means —(a) | a bank in Singapore licensed under section 7 of the Banking Act (Cap. 19); | (b) | a merchant bank approved under section 28 of the Monetary Authority of Singapore Act (Cap. 186); | (c) | a finance company licensed under section 6 of the Finance Companies Act (Cap. 108); | (d) | a financial adviser licensed under section 13 of the Financial Advisers Act (Cap. 110), except one which is licensed only in respect of the financial advisory service specified in paragraph 2 of the Second Schedule to that Act (namely, advising others by issuing or promulgating research analyses or research reports, whether in electronic, print or other form, concerning any investment product); | (e) | a holder of a capital markets services licence granted under section 86 of the Securities and Futures Act (Cap. 289); | (f) | a fund management company registered under paragraph 5(7) of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations (Cap. 289, Rg 10); | (g) | a person who is exempt from holding a financial adviser’s licence under section 23(1)(f) of the Financial Advisers Act read with regulation 27(1)(d) of the Financial Advisers Regulations (Cap. 110, Rg 2), except one who is exempt only in respect of the financial advisory service specified in paragraph 2 of the Second Schedule to that Act (namely, advising others by issuing or promulgating research analyses or research reports, whether in electronic, print or other form, concerning any investment product); or | (h) | such other person as the Registrar may specify.”. |
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