Our approach is preventive, pre-emptive and prescriptive (where specific rules are needed). This morning, allow me to outline three key features, namely: a)  a strong legal and regulatory framework that is in line with international standards;  b)  an effective supervisory regime; as well as  c)  a collaborative partnership with the industry. A strong legal and regulatory framework 10 A strong legal and regulatory framework is the basis of any effective regime. Over the years, MAS has updated our AML/CFT Notices for financial institutions several times, to take into account the latest global developments, as well as to incorporate emerging best practices. Our efforts to stay ahead of the curve are recognised internationally. In the 2008 FATF evaluation exercise, Singapore is assessed to have a strict and rigorous AML/CFT regime. We have agreed to undergo another evaluation in 2015. 11 We should not be complacent, for the reasons that I mentioned earlier. MAS will continue to strengthen the AML/CFT regime for financial institutions, to maintain relevance and effectiveness. Later this month, we will be issuing a public consultation on proposed amendments to a range of MAS’ AML/CFT Notices for financial institutions. This round of amendments draws reference from the revised FATF recommendations as well as international best practices, and should not be a surprise for those of you who have been following these developments. While there are a few new requirements in response to FATF recommendations, many of the proposed changes formalise existing practices and supervisory expectations.

In addition to deterring errant behaviour, this move will reinforce our preventive supervisory approach, and draw financial institutions’ attention to more severe instances of deficiencies and breaches. Financial institutions can then pre-emptively strengthen their own controls to prevent similar failures. b. Second, the NRA highlighted ML/TF risks inherent in cash-intensive industries and large value cash transactions. In May, the Ministry of Home Affairs, the Ministry of Finance and MAS consulted publicly on a cash transaction reporting regime for precious stones and metals dealers. In a similar vein, given the risks associated with  4  BIS central bankers’ speeches  large value cash transactions and high face-value notes, MAS will be discontinuing the issuance of the $ note, starting from 1 October 2014. The development of more advanced and secured electronic payment systems has reduced the need for large value cash-based transactions. Therefore, we do not expect the discontinuation of the note’s issuance to create any major inconvenience. Existing $ notes in circulation will remain legal tender, including all notes under the Currency Inter-changeability Agreement with Brunei. However, we expect the stock of such notes to dwindle over time, as worn notes are returned to us and not replaced. Conclusion 24 Let me sum up. 25 Singapore is fully committed to the global efforts against financial crime. The evolving risk environment requires proactive and collective actions in all jurisdictions. MAS has, and will continue to take steps to further enhance our AML/CFT regime, along with other government agencies for the non-financial sectors.