Measures to Prevent Sanctioned Entities from Circumventing Sanctions Imposed Against Russia

Mr Saktiandi Supaat asked the Prime Minister in light of the financial sanctions that have been imposed against Russia (a) whether Singapore's regulation of cryptocurrencies and decentralised finance (DeFi) will prevent sanctioned individuals and companies from using non-traditional forms of finance to circumvent the sanctions; and (b) if not, whether MAS is looking at introducing or revising our regulation of cryptocurrencies and DeFi shortly.

Mr Tharman Shanmugaratnam (for the Prime Minister): The financial measures 1 imposed by the Singapore Government in relation to Russia apply to all financial institutions (FIs) in Singapore, including digital payment token (DPT) service providers, otherwise known as "cryptocurrency" service providers. The Monetary Authority of Singapore (MAS) requires all FIs to ensure compliance with the measures, regardless of whether transactions are facilitated using traditional financial channels or through cryptocurrency exchanges or "decentralised finance" protocols. To guard against circumvention, these financial measures specifically prohibit DPT transactions that may be used to facilitate any prohibited activity or transaction. In short, FIs will not enable sanctioned parties to use non-traditional forms of finance to bypass the measures.

Both licensed and exempted DPT service providers must have robust controls to avoid facilitating prohibited transactions. These include procedures to know their customers and the beneficial owners of customers, and to screen these persons and their counterparties. MAS has issued a circular to DPT service providers to underscore the importance of proper implementation of these controls and the need to be vigilant against potential circumvention of the financial measures.

All FIs are required to demonstrate their compliance with the financial measures to MAS and are subject to MAS’ scrutiny and inspection. MAS will take appropriate regulatory actions against FIs found to have breached these financial measures.

Note(s) to Question No(s) 1:

1 MAS Notice SNR-N01, "Financial Measures in Relation to Russia" which should be read together with MAS Notice SNR-N02, “Financial Measures in Relation to Russia – Non-prohibited Payments and Transactions”