Singapore acts to address cases of frozen remittances in China worth S$13 million
The Monetary Authority of Singapore has instructed remittance companies to suspend the use of third-party non-bank and non-card channels to transfer funds to China.
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- Singapore police received more than 670 reports of remittances being frozen in China, with the affected funds amounting to around S$13 million
- Although the Singapore government has no jurisdiction over the bank accounts frozen by Chinese law enforcement agencies, MAS says it is taking steps to minimise risks to consumers
- The Chinese Embassy advised its nationals in Singapore to use official banking channels to remit funds to China, even though third-party agents may offer more favourable exchange rates
SINGAPORE: The Monetary Authority of Singapore (MAS) has instructed remittance companies to suspend money transfers through non-bank and non-card channels for three months, following reports of workers' remittances being frozen by Chinese authorities.
MAS said on Monday (Dec 18) that remittance companies providing cross-border services to China must only engage a bank or a card network like Union Pay to assist in the money transfer.
They may also go through a licensed financial institution that has engaged a bank or an operator of a card network.
The restriction will be in place from Jan 1 to Mar 31 next year and will be reviewed after three months.
This comes on the back of complaints by Chinese nationals here who said their remittances were frozen in China.
The Singapore Police Force (SPF) received more than 670 reports of such cases as of Dec 15, with the affected funds amounting to around S$13 million (US$9.8 million).
About 430 of the reports were against Samlit Moneychanger, SPF and MAS said in a joint media release.
To keep transaction costs low for customers, remittance companies sometimes engage overseas third-party agents, rather than banks, to complete the transfer from Singapore to China. In the majority of cases, the money sent through these channels is successfully deposited in the beneficiaries’ bank accounts in China.
"However, in recent months, for a very small proportion of such remittances, the monies received in beneficiaries’ bank accounts have been frozen by the PRC law enforcement agencies," said MAS, referring to the People's Republic of China.
It is not clear why these funds had been frozen.
Although the Singapore government has no jurisdiction over the beneficiary bank accounts frozen by Chinese law enforcement agencies, MAS said it is taking steps to minimise risks to consumers.
"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," said MAS.
FROZEN FUNDS
The issue was first reported by Chinese daily Lianhe Zaobao which said about 1,000 Chinese nationals were affected by frozen funds, and that more than 100 people had lodged reports at the Police Cantonment Complex on Nov 19.
MAS and the police held an outreach session on Monday evening for people whose funds were affected, mostly Chinese nationals working in Singapore.
It was also attended by representatives from the Chinese Embassy in Singapore, as well as three remittance companies - Hanshan Money Express, Samlit Moneychanger and Zhongguo Remittance.
"These actions are part of a broader effort by the Singapore government to work with the PRC government and the relevant remittance companies in Singapore to help the remitters understand how they can get their monies and accounts in China unfrozen," said MAS and SPF.
They noted that the Chinese Embassy had published a notice on Oct 24 advising Chinese nationals in Singapore to use official banking channels to remit funds to China, even though non-banking channels may offer more favourable exchange rates.
Singapore's Foreign Ministry has also engaged the Chinese Embassy in Singapore on multiple occasions in the past month to register the Singapore government's concerns on the impact on remitters in Singapore and to understand what the affected remitters need to do to get Chinese authorities to unfreeze their money and accounts, according to the joint release.
The Singapore Embassy in Beijing has also raised the matter with the Chinese foreign affairs ministry, with SPF doing the same with its counterparts in China.
SUPPORT FOR AFFECTED CUSTOMERS
MAS said it has been "actively engaging" the remittance companies involved and instructed them to provide the necessary assistance to affected customers.
"This includes issuing a confirmation letter to affected remitters upon request, to prove that their monies had been remitted through them into China, with information on the source of funds, such as through employment, to facilitate the unfreezing of the accounts," said the Singapore authorities.
They added that the Singapore government is in close contact with the Chinese government on the information required to facilitate the unfreezing of accounts.
"The Singapore government understands the frustrations faced by the affected remitters and is doing all it can to help," said MAS and SPF.
"We urge the affected remitters to provide all the information necessary to facilitate the unfreezing of their accounts by the PRC law enforcement agencies, and to seek redress within the legal framework of Singapore."
They added that the police will not hesitate to take enforcement action against anyone who breaks the law in Singapore, including organising or participating in a public assembly without a police permit.
MAS said it will closely monitor the situation and practices of remittance companies. "MAS may terminate or extend the suspension after Mar 31, 2024, or take further measures as appropriate," it added.
