The Legal Profession (Amendment) Bill was passed on 4 November 2014 and the new Part VA of the LPA on Prevention of Money Laundering and Financing of Terrorism came into effect together with the Legal Profession (Prevention of Money Laundering and Financing of Terrorism) Rules on 23 May 2015. With this new legislation coming into force, rules 11(D) to 11(I) of the previous Legal Profession (Professional Conduct) Rules > are repealed forthwith. The regulatory framework will apply to both Singapore lawyers and law practices, as well as foreign lawyers and foreign law practices.
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The Monetary Authority of Singapore (‘MAS’) Webpage on targeted financial sanctions aims to inform financial and non-financial institutions, and individuals of their obligations under the various domestic legislation enacted to ensure that Singapore complies with its obligations under the United Nations Security Council Resolutions.
As a member of the United Nations (‘UN’), Singapore gives effect to the sanctions under the UN Security Council Resolutions. The sanctions are made legally binding through the Regulations issued pursuant to the UN Act (‘UN Regulations’).
All persons in Singapore have to comply with the UN Regulations. Among other provisions, the UN Regulations prohibit persons in Singapore from dealing with UN-designated individuals and entities. Please refer to MAS’ webpage on Targeted Financial Sanctions for more information on your obligations under the UN Regulations. Any breach of the regulations could subject an individual to a fine not exceeding $500,000 or to imprisonment for a term not exceeding 10 years or to both; or in any other case, to a fine not exceeding $1 million.
You may subscribe to the AML/CFT and Targeted Financial Sanctions section of the MAS website. Doing so will alert you to changes to the lists of UN designated individuals and entities, and help you stay abreast of other relevant announcements, such as high risk jurisdictions identified by the Financial Action Task Force (‘FATF’).
This e-learning course was specifically developed for legal professionals. The course consists of 5 modules which cover the relevant legislation, frameworks, and provide guidance on AML and CTF.
For more information and to register for the course, please click HERE.
In considering whether the risks of money laundering and the financing of terrorism are raised (under Rule 12(4) and Rule 13(1)(a) of the Legal Profession (Prevention of Money Laundering & Financing of Terrorism) Rules, including determining whether the client is from or in any country or jurisdiction known to have inadequate measures to prevent money laundering and the financing of terrorism, you should refer to the following links:
Relevant material and links on Anti-Money Laundering Crypto Risk Management:
21 April 2018 – The Singapore government takes a firm and robust stance against money laundering activities. In this regard, the Council of the Law Society would like to remind all members of their statutory obligation under section 39(1) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (‘CDSA’) to report a suspicious transaction to the authorities.
Section 39(1) of the CDSA reads:
“Where a person knows or has reasonable grounds to suspect that any property –
any act which may constitute drug dealing or criminal conduct, as the case may be, and the information or matter on which the knowledge or suspicion is based came to his attention in the course of his trade, profession, business or employment, he shall disclose the knowledge or suspicion or the information or other matter on which that knowledge or suspicion is based to a Suspicious Transaction Reporting Officer as soon as is reasonably practicable after it comes to his attention.”
In summary, if you know or have reasonable grounds to suspect that any property may be connected with a criminal activity, you are obliged to file a Suspicious Transaction Report (‘STR’). Suspicious transaction reports should be lodged with the Commercial Affairs Department (‘CAD’). Please refer to the CAD’s website for more information.
Should you require any assistance or have any clarifications or queries relating to the above, please feel free to e-mail compliance@lawsoc.org.sg
Pursuant to section 70D of the Legal Profession Act, where a legal practitioner or law practice knows or has reasonable grounds to suspect that any property was or is intended to be used in connection with drug dealing or criminal conduct, as set out in section 39(1) of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (‘CDSA’), the legal practitioner or law practice must disclose the matter to a Suspicious Transaction Reporting Officer under the CDSA by way of a suspicious transaction report; or an authorised officer under the CDSA.
There is also a duty under section 8(1) of the Terrorism (Suppression of Financing) Act for every person in Singapore and every citizen of Singapore outside Singapore who has (inter alia) information about any transaction or proposed transaction in respect of any property belonging to any terrorist or terrorist entity, to file a suspicious transaction report.
For more information on suspicious transaction reporting, please refer to Part VA of the Legal Profession Act and the Legal Profession (Prevention of Money Laundering and Financing of Terrorism) Rules 2015.
In practice, a suspicious transaction report can be made directly to the Suspicious Transaction Reporting Office, which is the central agency in Singapore for the receipt, analysis and dissemination of suspicious transaction reports, under the Commercial Affairs Department (‘CAD’) of the Singapore Police Force. A suspicious transaction report should be filed electronically using the e-filing system provided by STRO to file STRs.
The Suspicious Transaction Reporting Office (‘STRO’) of Commercial Affairs Department (‘CAD’) has launched a new e-services platform – the STRO Online Notices and Reporting platform (‘SONAR’). SONAR allows businesses and their employees to file Suspicious Transaction Reports (‘STRs’), Cross Border Cash Movement Reports (CMRs – NP 728) and Cash Transaction Reports (CTRs – NP 759) to STRO on a consolidated platform. It replaces the existing Suspicious Transaction Report Online Lodging System (STROLLS) and Electronic 728 (E728). Along with the launch, three electronic forms have been introduced on SONAR:
To file STRs on the new SONAR platform, you will need:
Members are required to lodge all STRs electronically.
Should you have any inquiries regarding the E-filing of STR, please contact the SONAR team at SPF_STRO_IT_Team@spf.gov.sg
For the STR Form and filing instructions, you can visit the following websites:
FAQ guidance from the Suspicious Transaction Reporting Office of CAD on Lodging a Suspicious Transaction Report
The Suspicious Transaction Reporting Office (‘STRO’) of the Commercial Affairs Department has compiled a set of Frequently Asked Questions to provide guidance to the legal profession in the area of lodging a suspicious transaction report (‘STR’).
There is no requirement in the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act for STR filers to seek the consent of STRO or to seek STRO's directions before proceeding with the transaction for the client.
There is no moratorium on transacting for the client after the filing of a STR.
There is no provision in the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act prescribing a period during which a lawyer cannot act for a client after a STR has been filed on the client. After a STR has been filed, the STR filer may wish to contact the STRO analyst assigned to the case or stro@spf.gov.sg, for advice on certain transactions - for example, whether they can proceed to deal with the purchase of real estate. This need could arise in a case when the property or transaction is suspected to be linked to proceeds of crime. STRO will provide a response based on the information available. STRO will need more time to respond, in cases where STRO has disseminated the information to law enforcement agencies or foreign financial intelligence units.
The decision whether or not to continue the relationship with the client should depend on the standards of prudence of the law firm. A STR filer may decide to terminate the client relationship when the commercial or reputational risks are high. The lawyer should determine whether these circumstances, separately or together, provide reasonable grounds to suspect that the cash funds proffered by the client could be connected with criminal conduct. The lawyer should immediately file a STR if there is reason to suspect the funds is linked to criminal activity. The lawyer may then want to consider whether there is a commercial or reputational risk in continuing with the client relationship.
When a law practice or a lawyer decides to terminate the client relationship, they should not inform the client or any third party that a STR has been filed. This may constitute a tipping off, an offence under section 48 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act. The law practice or lawyer should give an appropriate reason to the client for terminating their relationship. The law firm could, for example, cite compliance requirements as a reason:
When a law practice or a lawyer decides to terminate the client relationship, they should not inform the client or any third party that a STR has been filed. This may constitute a tipping off, an offence under section 48 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act. The law practice or lawyer should give an appropriate reason to the client for terminating their relationship. The law firm could, for example, cite compliance requirements as a reason:
After a STR is filed with STRO, no further action is required of the STR filer unless instructed by STRO. STR filers may wish to conduct their business relationship with the client in accordance with their internal risk management policies and standards of prudence.
Situation: The STR filer holds off acting for the client. Liabilities were incurred during the 'waiting period'. For example, the real estate transaction option period lapses and the client loses a profit on the sale. The client does not receive his funds needed to complete his business dealings. The client threatens to sue the STR filer for costs or losses incurred by the 'delay' of the STR filer.
STRO will acknowledge receipt of a STR filed by email or post, and provide the name of the STRO officer in charge of analysing the STR. STRO will inform the STR filer of the outcome after the STR analysis is completed.
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This paper is produced by the Anti-Money Laundering (‘AML’) and Countering the Financing of Terrorism (‘CFT’) Industry Partnership (ACIP) working groups on Trade-Based Money Laundering (‘TBM’L). It highlights common TBM’red flags’ and recent typologies and sets out industry best practices for the identification and mitigation of TBML risks.
This paper is produced by the ACIP working groups on Legal Persons. It highlights recent typologies involving the misuse of companies and other legal persons. The paper also highlights the ‘red flags’ that led to detection of these typologies, and sets out industry best practices that could detect or prevent such abuses.
In October 2018, the Law Society working with Accuity, a global provider of risk and compliance, payments and know-your-customer solutions, conducted a survey among both Singapore law practices and foreign law practices to understand and identify the challenges facing law firms in meeting their AML obligations.
The key findings of the survey are highlighted in the Industry Report below.
The report identifies the areas that law firms find challenging in meeting their AML obligations.