On August 31, 2023, the Monetary Authority of Singapore (MAS) issued additional guidance on managing sanctions risk. The circular applies to banks, insurance companies, insurance brokers, trust businesses, capital markets, financial advisors, and payments companies.

To read in detail, go to https://lnkd.in/d3A4gaUt

The circular recommends that financial institutions (FIs) maintain strong oversight and enhance their sanctions-related detection capabilities. The key highlights of the circular include:

• Board and Senior Management (BSM) must assess sanctions risks, report frozen assets, and balance risks.
• BSM should outline FIs’ responsibilities for detecting, monitoring, and managing sanctions-related risks, involving staff functions.
• Establishing risk metrics for regular monitoring and ongoing risk management.
  Implementing an escalation process for addressing sanctions-related risk events in the first and second-line functions.
• FIs should use a risk-based approach for implementing sanctions lookback mechanisms with clear baseline parameters, which include:
  – Defining trigger events for the lookback mechanism.
  – Implementing a twelve-month lookback mechanism for corporate customer accounts and transactions.
  – Ensuring completion of the lookback mechanism within two months of initiation.
  – Monitoring deviations from baselines and informing BSM of potential risks.
• FIs should review their AML/CFT (Anti-Money Laundering/Counter Financing of Terrorism) frameworks and controls, addressing gaps, and taking appropriate steps to enhance controls.