The Monetary Authority of Singapore (“MAS”) has had a notably active enforcement season, with June and July marked by decisive regulatory actions targeting anti-money laundering (“AML”) and countering the financing of terrorism (“CFT”) failures across both payment and financial institutions.
June 2025 – Penalties on five Major Payment Institutions
On 27 June 2025, MAS imposed composition penalties totaling S$960,000 on five major payment institutions, which are licensed to provide cross-border money transfer services, for breaches of AML and CFT requirements. MAS’ enforcement action against the major payment institutions is the first publicly reported instance of penalties levied against licensed payment service providers in Singapore for AML/CFT breaches.
The penalties were issued following supervisory reviews that uncovered two key lapses in AML and CFT controls.
- Insufficient Customer Due Diligence
- Several institutions were found to have incomplete customer identification procedures, including the failure to obtain critical information such as residential address and documentary evidence confirming the authority of individuals acting on behalf of customers.
- Some institutions also neglected to identify beneficial owners or screen customers and related parties against key AML and counter-terrorism financing CFT sources, hindering their ability to assess and manage associated risks.
- Non-compliance with wire transfer requirements
- Some institutions failed to provide information relating to wire transfer originators and wire transfer beneficiaries of cross-border wire transfers. This was found to undermine the transparency and traceability of the movement of funds.
July 2025 – Penalties on nine Financial Institutions
On 4 July 2025, MAS announced the composition penalties amounting to S$27.45 million in total imposed on nine major financial institutions, including Citibank, UOB and Credit Suisse, for breaches of AML and CFT requirements in relation to the $3 billion dollar money-laundering case in Singapore in 2023. These penalties are the second largest cumulative penalties imposed by the MAS for breaches of AML/CFT regulations, surpassed only by the S$29.1 million in financial penalties levied on eight banks in connection with the 1MDB scandal.
The breaches were identified during MAS’ supervisory examinations of the financial institutions from early 2023 to early 2025.
- Inadequate customer risk assessment
- The financial institutions failed to properly assess and document the risk profiles of their customers, particularly those with complex structures or high-risk indicators.
- The financial institutions failed to properly assess and document the risk profiles of their customers, particularly those with complex structures or high-risk indicators.
- Failure to verify source of wealth
- All nine institutions did not take reasonable steps to verify the source of wealth of customers who posed a higher risk of money laundering despite significant discrepancies or red flags which indicated increased risk of money laundering.
- All nine institutions did not take reasonable steps to verify the source of wealth of customers who posed a higher risk of money laundering despite significant discrepancies or red flags which indicated increased risk of money laundering.
- Inadequate review of flagged transactions
- Transactions that were flagged by monitoring systems were not adequately reviewed or escalated, even though the relevant transactions were unusually large, inconsistent with customers’ profiles, or exhibited unusual patterns.
- Transactions that were flagged by monitoring systems were not adequately reviewed or escalated, even though the relevant transactions were unusually large, inconsistent with customers’ profiles, or exhibited unusual patterns.
- Inadequate risk mitigation measures
- Failure to take adequate and timely risk mitigation measures after the filing of the suspicious transaction reports, such as enhanced monitoring and reviewing of their risk classification.
Practical implications and recommendations
These recent regulatory actions for AML/CFT breaches underscore a clear continuation of MAS’ post-1MDB AML/CFT enforcement stance. Regulated entities can expect rigorous inspections and tougher penalties if they are found to be in breach of applicable regulations.
In particular, this first publicly reported series of penalties imposed by MAS against the five licensed major payment institutions reflects MAS’ strong regulatory stance against AML/CFT lapses committed by all players in Singapore’s financial industry. This enforcement trend underscores the need for payment service providers to uphold the same rigorous AML/CFT standards as traditional financial institutions.
Strengthen AML/CFT Governance and Controls
It is advisable for regulated entities to strengthen their governance and controls to ensure compliance with MAS’ AML/CFT requirements. Senior management should also ensure that the policies and controls in place are kept pace with the entity’s growth in business. It may be prudent for regulated entities to regularly benchmark their internal AML/CFT policies against MAS’ published guidelines and notices to identify gaps.
Implement ongoing training and independent compliance reviews
As regulatory expectations evolve, it is crucial for regulated entities to stay abreast of AML/CFT laws and enforcement trends. This includes implementing regular staff training, maintaining thorough compliance documentation, and conducting independent reviews.
Establish a culture of compliance
MAS expects senior management to take a proactive role in overseeing and implementing adequate AML/CFT controls. Senior management should foster a strong compliance culture by ensuring deliberate, accountable and consistent application of AML/CFT policies across all business functions in the organisation.