On 5 August 2024, the Monetary Authority of Singapore (“MAS“) published a Consultation Paper on Proposed Measures in Relation to the Provision of Cross-Border Money Transfer Services to the People’s Republic of China (“PRC“).
As background, on 18 December 2023, MAS imposed a suspension on the use of channels that are not specifically permitted (“non-specified channels“) by licensed payment service providers providing cross-border money transfer services (“remittance companies“) when transmitting money to persons in the PRC. This suspension was due to reports of the beneficiaries’ bank accounts being subsequently frozen or having monies forfeited due to suspicions of the monies being linked to illicit activity. In suspending the use of non-specific channels, MAS sought to minimise risks to consumers remitting funds to the PRC.
The suspension was implemented via MAS Notice PSN11 – Notice on Temporary Restrictions in Relation to the Provision of Cross-Border Money Transfer Services to the People’s Republic of China (“Notice“). The Notice set out a list of specified entities which may be engaged by remittance companies in Singapore, such as a bank or an operator of a card payment system.
The Notice was implemented from 1 January 2024 to 31 March 2024, and subsequently extended to 30 September 2024. MAS now proposes to:
- extend the suspension until further notice; and
- expand the scope of the Notice to all customers of the remittance companies, including corporates and legal persons.
The proposed changes are set out in the draft amended Notice included in the Consultation Paper.
Extension of Suspension
Since the implementation of the Notice, the reports of frozen accounts or forfeited funds have decreased significantly. To continue minimising risks to consumers until there is greater clarity on the situation, MAS proposes to continue the suspension until further notice.
The suspension is not expected to create disruptions for remitters, as remittances to the PRC may still be made via multiple specified channels.
Expansion of Scope
At present, the Notice only applies to the provision of cross-border money transfer services to individuals. However, non-individual remitters have also reported frozen accounts or forfeited monies.
As such, MAS proposes to expand the suspension to cover all customers sending monies to PRC, including corporates and legal persons.
The consultation period closed on 6 September 2024.
Click on the following link for more information:
- Consultation Paper on Proposed Measures in Relation to the Provision of Cross-Border Money Transfer Services to the People’s Republic of China (available on the MAS website at mas.gov.sg)
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