1. As we entered our 10 years of operation, we are mindful that our growth is dependent on good, corporate processes, procedures and compliance with legislations and laws that protect and pre-empt the possible loss of monies due to malpractices both within and without.
2. In this respect, first and foremost is to have in place a set of regulations and procedures that a charity such as ours would follow in order to combat financial fraud and crimes prevalent in the financial environment that we operate in.
3. The Anti-Money Laundering program is an ongoing process that a charity such as us, does in relation to ensuring compliance on all aspects of our operations, from food donations to cash donations, which are the primary sources of our funds, internet operations, especially from foreign entities, user-processing policies, accounts monitoring and detection, or reporting of money laundering activities.
4. The aim and objective of an AML compliance program is to expose and respond accordingly to inherent and residual money laundering, terrorist financing and fraud related risks. With this mind, a strong understanding of what an AML compliance program needs to achieve and how to create a program that works for us specifically. To develop such a coherent program, we need to follow a set of indisputable requirements.
5. An Anti-Money Laundering Compliance Program ensures that our charity is able to detect suspicious activities associated with money laundering which includes tax evasion, fraud and terrorist financing. The program focuses not only on the effectiveness of internal systems and controls developed to detect money laundering but also on the risks posed by activities of de facto donors, both individual as well as corporate, with whom we work with. To ensure that the program does all this, we need a strong foundation of regulatory understanding, oversee by a trained staff, to create an environment of compliance at every level of our organization.
6. What then are the components of a reliable AML Compliance Program?
Briefly they are a) Internal policies, procedures and controls tailored to suit a charity.
b) An eminently qualified Compliance Manager;
c) Relevant and up to date employee Training Programs;
d) Independent Audit reviews for compliance testing and ;
e) Customer Due Diligence (CDD).
a) Internal Policies, Procedures and Control.
– focus on internal controls and systems. For instance, as we are handling food items with no market value; corporate donations which are on cash basis; government grants which are timed to roll in when the projects are near completion: all these are clearly differentiated in terms of requirements on systems and controls.
– therefore, a regular review of these controls are necessary to ensure their effectiveness.
– more importantly, team members who are tasked with specific projects should be aware of their roles and responsibilities with the system.
– thus, within the ambit of the overarching system, team members would need to learn and apply principles of due diligence on our business interests, or how to comply with policies and procedures which ensure compliance on an ongoing business.
– for a start, a simple table illustrating the risks associated with each kind of project work should be clearly delineated: minimal risks associated with donations from big corporations such as DBS Bank, Temasek Foundation, Philips Foundation etc as they have effectively conducted their own due diligence on The Food Bank Singapore before they even start on this journey with us. Ditto with Government grants.
– what is important is the clear obligations relating to documentation and recording and registration of intent, customer identification, maintaining records, money received, and reporting of any suspicious activity and so forth.
b) Compliance Officer.
– there should be a designated Compliance Officer who is responsible for overseeing all AML policies within the charity;
– he should have the necessary experience and authority to ensure the performance of duties are effectively done;
– these include communicating with the authorities and auditors, briefing senior management on all key issues on AML policies and key recommendations arising thereof;
– as such, his experience and expertise should include knowledge and understanding of all regulatory procedures, the details and methods commonly employed in such financial crimes and their impact on the charity’s image and well-being;
– therefore, it is important that the Officer is imbued with the necessary authority and training to get the job done.
c) Relevant Training Program for Employees.
– at the very least, each team member should have a basic understanding of AML procedures;
– however specific employees with greater responsibility should be required to implement the compliance program in their area of operational expertise;
– at the same time, a portfolio of well-designed programs can be offered to level up skill competencies to fit the required standards of deliverance;
– to be effective, any such program so designed should bear in mind the adage that “one size does not fit all “
– therefore, we should be prepared for any changes arising from such programs and keep records of all the training provided and the individuals who received them, such records forming the substantive basis for the compliance to the overall AML procedures.
d) Independent Audits.
– independent audits is the best means to test the effectiveness of compliance to AML procedures;
– an independent third-party external auditor who has the scope and skill to conduct a risk-based audit is the rule that is applicable in Singapore context;
– independent audits should be carried out once a year in conjunction with a companywide audit as required by The Charities Act;
– the annual review as carried out by the external auditor shall be able to confirm that the program is working, all internal controls are in place, and that all risks are properly evaluated.
e) Customer Due Diligence.
– is central to Singapore’s effective AML and Counter Terrorism Finance regime;
– it protects the integrity of all businesses, financial institutions, and the economy. Without this due diligence, institutions can become subject to misuse for purposes of money laundering, terrorism financing and corruption.
– what does the process of CDD entail.
– what supporting documents are required for the due diligence process?
. passport and/or NRIC of individuals
. supporting documents such as utility bills, bank statements etc of individual
. details of the firm’s business and ownership structure
. recent and current financial statements.
These documents, as well as information from other regulated persons, help to verify the identity, ownership and control structure of the customer as required by legislation.
Business transparency is important for the success and sustainability of a charity such as ourselves and this has resulted in the upgrading of this agenda to the top of many charities. A robust monitoring system reduces the misuse of corporate vehicles for money laundering or terrorism financing and increases the trust in Singapore businesses across the board. Charities operating here can also contribute to the integrity and stability of Singapore’s financial system. Contributing to an environment of trust and transparency is no longer a matter of PR, but a significant driver of growth.
Current STR process (Updated 2022)
1. Donor relations officer will liaise with Finance offer on all incoming funds
2. Transactions will be tracked based on donor information via ERP / CRM system
3. Finance officer reviews all funds via the system
4. Should any transactions not correspond with information from the Donor relations officer or cannot be tracked, both officers and the Executive Director will conduct an investigation of funds transfer via bank records and corresponding emails
5. Should there be missing data / untraceable, they will be deemed suspicious and we will submit a report to SONAR https://eservices.police.gov.sg/content/sonar/homepage.external.html