In 1995, under the leadership of Ismail Serageldin and a group of 10 donor agencies, set up the Consultative Group to Assist the Poor (“CGAP”) under the umbrella of the World Bank.  CGAP is an independent organisation with an aim to address how the poor could have access to and enjoy the microfinance services.  According to the Empowerment Case Study prepared by Prof. Deepti Bhatnagar and Ankita Dewan at the Indian Institute of Management and Magui Moreno Torres and Parameeta at the World Bank, the Report estimated 500 million people worldwide require microfinance, the gap between the supply and demand of financial services remains high.


In Chapter 10.7.3, Hypothesis Example 9 – Estate Agent, First Edition, Money Laundering – A Handbook for CDD Compliance exhibits an example of Arumugam s/o Muthu; an Indian citizen went to Singapore for work and wanted to rent an apartment to stay.


Under the Singapore Estate Agent Act and the CEA Practice Circular on the Prevention of Money Laundering and Countering the Financing of Terrorism 04-15, and CEA Practice Circular 03-17, Customer Due Diligence is required to assess and identify the tenant.  Arumugam s/o Muthu could not satisfy the residential address issue, and that does not mean he fails the CDD compliance test.  Arumugam s/o Muthu falls under the low-income group back in India.  Therefore, Arumugam s/o Muthu qualifies for Simplified CDD or exemption: FATF Guidance, Anti-money laundering and terrorist financing measures and Financial Inclusion, June 2011, at p.25.


To complete and satisfy the CDD compliance measures, ROC Realtor Pte Ltd must request from Arumugam s/o Muthu a certification from an introducer or any other evidence as to the identity and address of Arumugam s/o Muthu the latter must be acceptable to ROC Realtor Pte Ltd.  In the event ROC Realtor Pte Ltd is dissatisfied with the evidence, ROC Realtor Pte Ltd must stop the transaction.


For this case, it is unlikely ROC Realtor Pte Ltd going to report a suspicious transaction. There are two rules under FATF Recommendation 20, Reporting of Suspicious Transaction.  The first, reasonable suspicion must be reasonable based on facts.  The second, suspicious reporting is mandatory for criminal offences under the Vienna Convention and the Palermo Convention (see Chapter 2.12, FATF 40 Recommendations, Frist Edition, Money Laundering – A Handbook for CDD Compliance).  None of these two rules occurs in the case of Arumugam s/o Muthu.


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Categories: UNODC, UNCAC, FATF, AML/CFT Compliance, Money Laundering, CGAP, World Bank