The temporary suspension on the use of non-bank and non-card channels will take effect from Jan 1 to March 31, 2024. — The Straits Times
SINGAPORE: Remittance companies here have been directed to suspend the use of non-bank and non-card channels when providing individuals with cross-border money transfer services to China for the next three months, Singapore’s central bank says.
This comes after the police said it had received more than 670 reports of remittances through such channels being frozen as of Dec 15, involving a total amount of around S$13mil.
From Jan 1 to March 31, 2024, remittance companies may engage only a bank, a card network operator such as UnionPay International, or a licensed financial institution that has engaged a bank or a card network operator, to assist with such transfers, the Monetary Authority of Singapore (MAS) said.
This advice was also given at a Dec 18 outreach session organised by the Singapore Police Force and MAS for individuals, mostly Chinese nationals working in Singapore, whose funds had been frozen by Chinese law enforcement agencies after they had sent money to their beneficiaries’ bank accounts in China through third-party agents.
Remittance companies usually give customers a choice of how they want their funds transferred.
Customers can opt to transfer the funds through banks or card networks like UnionPay. Alternatively, they can go through third-party agents which usually offer lower transaction costs.
Representatives from the Chinese Embassy in Singapore and three remittance companies – Hanshan Money Express, Samlit Moneychanger and Zhongguo Remittance – were present at the outreach session held at the Police Cantonment Complex and attended by 39 affected individuals.
About 430 out of the 670 reports received by the police were against Samlit Moneychanger. To keep transaction costs low, the remittance companies had processed the affected remittances through overseas licensed agents instead of a direct bank transfer from Singapore to China.The police and MAS said the affected cases make up a small minority of total remittances through remittance companies, adding: “While such non-bank channels were not prohibited, recent actions taken by (Chinese) law enforcement agencies with respect to such channels have made them more risky.”
In a notice on Oct 24, the Chinese Embassy advised its citizens to use official banking channels to remit funds to China even though non-banking channels might offer more favourable exchange rates.
It is not clear why the affected funds had been frozen, said MAS.
“Nonetheless, to minimise risks to consumers remitting funds to China, MAS has decided to temporarily suspend the use of non-bank and non-card channels by remittance companies for money transfers to China,” it said.
“While customers may now have to pay more to remit funds to China, this suspension is necessary for the immediate protection of consumers, and to stem the number of reported new cases of beneficiaries’ accounts in China being frozen.”
The authorities’ actions are part of a broader effort by the Singapore government to work with its Chinese counterparts and the relevant remittance companies here to help people understand how they can get their money and accounts in China unfrozen.
MAS has told the remittance companies involved to render the necessary assistance to affected customers and strengthen their complaints handling process. — The Straits Times/ANN
