The Monetary Authority of Singapore (MAS) has instructed remittance companies to only work with banks, card network operators such as UnionPay International, or licensed financial institutions to transfer funds to China for the next three months, beginning from 1 January 2024 to 31 March 2024.
This temporary suspension will give remittance companies 14 days to adjust their practices and complete ongoing remittances.
MAS advises the public against rushing to use overseas third-party agents during this period and suggests utilizing alternative channels, such as banks or card networks, to avoid any inadvertent freezing of funds or accounts.
This action comes in response to reports of funds sent to China through these remittance companies being frozen in the beneficiaries’ Chinese bank accounts, affecting mostly Chinese nationals working in Singapore.
MAS conceded that while this may result in increased costs for customers, the move aims to protect consumers and reduce the instances of beneficiaries’ accounts in China being frozen.
Remittance companies typically engage overseas third-party agents, instead of banks, for transferring funds from Singapore to China. In most cases, these transactions are successfully deposited into the recipients’ Chinese bank accounts.
However, a small proportion of recent remittances faced freezes by Chinese law enforcement agencies, with unclear reasons behind these actions.
The regulator said in a statement,
“MAS has been actively engaging the remittance companies involved. We have told them to render the necessary assistance to the affected customers and to strengthen their complaints handling process. We have also instructed them to review their existing arrangements with partners for the PRC (People’s Republic of China) remittance corridor, in view of these complaints and the impact to their customers.”
MAS said that it will closely monitor the situation and practices of remittance companies and may decide to extend or terminate the suspension after 31 March 2024 or take further actions as necessary.
An outreach session organised by the Singapore Police Force (SPF) and MAS addressed individuals whose funds remitted into Chinese beneficiaries’ bank accounts via Singaporean remittance companies had been frozen by PRC law enforcement agencies.
As of 15 December 2023, SPF had received over 670 reports of frozen remittances, totaling approximately S$13 million. Approximately 430 reports were against Samlit Moneychanger. These cases represent a small minority of total remittance transactions through remittance companies.
The Ministry of Foreign Affairs (MFA) has engaged with the PRC Embassy in Singapore to register concerns and understand how affected remitters can unfreeze their funds and accounts.
The Singapore Embassy in Beijing and SPF counterparts in China have also raised this matter with the PRC Ministry of Foreign Affairs.
While Singapore has no jurisdiction over the frozen beneficiary bank accounts, the government remains in close contact with the PRC government to facilitate the decision on account unfreezing.
Featured image credit: Composite of two images from Unsplash (Source one and two)
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- Source: https://fintechnews.sg/82381/china/singapore-tightens-china-remittance-rules-in-light-of-s13-million-frozen-funds/
