New Bill Requires Non-Financial Institutions to Strengthen Controls Against Proliferation Financing
In an effort to strengthen the fight against the financing of weapons of mass destruction, Singapore has expanded its legal framework through the Prevention of Proliferation Financing and Other Matters Bill, passed on February 6, 2024.
New Compliance Requirements for Non-Financial Institutions
The Bill mandates that jewellery dealers, pawnbrokers, moneylenders, and legal practitioners enhance their internal controls to comply with international standards designed to prevent the financing of nuclear, chemical, and biological weapons. These businesses, categorized as non-financial institutions, will now need to perform risk assessments and implement policies to counter proliferation financing, in addition to money laundering and terrorism financing.
Compliance with FATF Standards
The amendments align Singapore’s legal framework with the Financial Action Task Force (FATF) standards, particularly those introduced in October 2020 to tackle financial crimes. Singapore aims to ensure compliance with global financial crime regulations, given its status as a leading financial and trading hub.
Enhancing Anti-Money Laundering Measures
The Bill also strengthens anti-money laundering measures for businesses, including prohibiting individuals convicted of financial crimes from holding certain licenses or management roles in moneylending and pawnbroking businesses. It also revises the definition of “precious product” to include luxury items exceeding S$20,000, regardless of the proportion of precious metals or stones in them.
The Ministry of Law will oversee inspections and enforcement to ensure these new requirements are effectively implemented.
