The Monetary Authority of Singapore (MAS) has imposed a total of $960,000 in composition penalties on five major payment institutions on June 27. These are: Remsea, Arcade Plaza Traders, J-Dee Remittance Services, Mobile Community Tech and OxPay SG, a wholly-owned subsidiary of SGX-listed OxPay Financial Limited.
These institutions, which are licensed to provide cross-border money transfer services, were fined for breaching the central bank’s anti-money laundering and countering the financing of terrorism (AML/CFT) requirements, said MAS in its June 27 statement.
The breaches were said to be identified when MAS examined the institutions’ compliance with the requirements of MAS Notice PSN01 on the prevention of money laundering and countering the financing of terrorism - specified payment services. The institutions were found to have “inadequate” AML/CFT controls, which resulted in multiple breaches of MAS’s AML/CFT requirements.
Remsea was slapped with a penalty of $280,000 for breaches which took place between August 2020 to August 2023. Remsea was fined for failing to obtain the residential addresses of its customers, failing to inquire if there was any existing beneficial owner in relation to its customers; failing to verify the due authority of persons appointed to act on behalf of its customers by obtaining appropriate documentary evidence; and for failing to include wire transfer originator information in the message or payment instructions for cross-border wire transfers, as the ordering institution.
Arcade Plaza Traders received a penalty of $260,000 for breaches which took place between March 2020 to August 2023. Arcade Plaza Traders had failed to screen its customers, connected parties and beneficial owners of customers against relevant money laundering/terrorism financing information sources to determine whether there were such risks. The company also failed to include wire transfer originator information in the message or payment instructions for cross-border wire transfers, as the ordering institution.
J-Dee Remittance Services was fined $170,000 for breaches which took place between July 2022 to August 2023. The breaches included failing to screen multiple customers, connected parties and beneficial owners of customers against relevant money laundering/terrorism financing information sources for the purposes of determining if there were any money laundering/terrorism financing risks when establishing business relations with the customers.
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Mobile Community Tech was issued a penalty of $140,000 for breaches which took place between September 2021 to July 2023. The company had failed to verify the identity of customers using reliable, independent source data, documents or information; failed to verify the due authority of natural person appointed to act on behalf of customers by obtaining appropriate documentary evidence; and failed to include wire transfer beneficiary information in the message or payment instructions for cross-border wire transfers, as the ordering institution.
Finally, OxPay SG was imposed a penalty of $110,000 for breaches which took place between May 2021 to November 2022. OxPay had failed to inquire if there existed any beneficial owners in relation to its customers; and failed to screen its customer and beneficial owners of its customer against relevant money laundering/terrorism financing information sources for the purposes of determining if there were any money laundering/terrorism financing risks before undertaking cross-border money transfer transactions for the customer.
Further to its June 27 statement, MAS said it will be pushing an information paper to set out the common issues noted, its supervisory expectations, and areas for improvement uncovered from its recent examinations of these institutions.
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In a statement released in the evening of June 27, OxPay Financial said OxPay SG has acknowledged MAS’s findings and accepted the penalty.
“OxPay SG takes its compliance obligations seriously and deeply regret the lapses. While there was no evidence of intentional wrongdoing or financial loss, OxPay SG recognises the importance of robust AML/CFT controls to ensure the integrity of its financial system,” reads OxPay Financial’s statement.
It adds that since the central bank’s examination, OxPay SG has taken “concrete steps” to strengthen its AML/CFT capabilities. These include enhancements to customer onboarding processes, screening protocols and transaction monitoring. The payments institution says it has also introduced a more structured compliance oversight and has invested in staff training to instill a stronger risk and compliance culture across the organisation.
In addition, OxPay SG is now led by a newly-appointed management team with “extensive industry experience and a strong track record in regulatory compliance and governance”. “The new leadership is committed to upholding high standards of operational discipline and regulatory integrity. Under their stewardship, OxPay SG is implementing sustainable remediation measures and further upgrading its systems, processes, and controls to mitigate financial crime risks effectively.”
