As of Dec. 15, 2023, the Singapore Police Force (SPF) has received more than 670 reports of remittances to China being frozen, with a total affected amount of around S$13 million.
Following the reports, the Monetary Authority of Singapore (MAS) has issued a directive to remittance companies to suspend the usage of non-card and non-bank channels for remittances to China, starting from Jan. 1, 2024.
The suspension will last for three months, until Mar. 31, 2024 (inclusive), whereupon it will be reviewed, both the Singapore Police Force (SPF) and MAS said in their respective press releases.
The suspension means that remittances companies may only engage a bank, a card network operator such as Union Pay International, or a licensed financial institution which has engaged a bank or card network operator, to assist in the transmission of money across borders.
Overseas licensed agents were used for the affected remittances to keep costs down
It is not clear why these funds had been frozen, MAS stated in its joint press release with SPF.
According to the press release, about 430 of the reports, out of the 670, were made against Samlit Moneychanger Pte Ltd.
Representatives of Samlit and two other remittance companies (Hanshan Money Express Pte Ltd and Zhongguo Remittance Pte Ltd) attended an outreach session at Police Cantonment Complex, organised by SPF and MAS.
39 affected individuals were also present, along with representatives of the Chinese Embassy.
Such remittances are made mostly by mainland Chinese nationals working here.
To keep transaction costs low, the remittance companies had processed the affected outward remittances through overseas licensed agents and not through a direct bank transfer from Singapore to China, SPF/MAS noted.
Recent actions by China
While these non-bank channels are not prohibited, "recent actions taken by PRC law enforcement agencies with respect to such channels have made them more risky", stated the press release.
In the vast majority of cases, the money sent through these channels are successfully deposited in the beneficiaries’ bank accounts in China.
However, in recent months, for a very small proportion of such remittances, the money received in beneficiaries’ bank accounts have been frozen by mainland Chinese law enforcement agencies.
The actions follow the notice published by the Chinese Embassy on Oct. 24, 2023 advising Chinese nationals in Singapore to use official banking channels to remit funds to China, even though non-banking channels might offer more favourable exchange rates.
SPF cautions public against rushing to remit money to China before Jan. 1, 2024
Hence, the decision to temporarily suspend the use of non-bank and non-card channels by remittance companies is to minimise the risks to consumers remitting funds to China.
"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," SPF/MAS added.
SPF/MAS also cautioned the public against rushing to remit money to China through overseas third-party agents before Jan. 1, 2024 and said they should use other channels such as through banks or card networks.
Such channels are offered by the remittance companies and remain available for customers.
Singapore government working with Chinese authorities on the issue
SPF/MAS also said that the Ministry of Foreign Affairs (MFA) has engaged China's embassy in Singapore on multiple occasions in Nov. 2023 to register the Singapore government’s concerns on how remitters here have been affected, and to understand what the affected remitters need to do to get China's law enforcement agencies to unfreeze the money and accounts.
Singapore's embassy in Beijing has also raised this matter with China's Ministry of Foreign Affairs, as has the SPF with its counterparts in China.
In addition, MAS has been actively engaging the remittance companies involved, and has told them to provide the "necessary assistance" to affected customers and to strengthen their complaints handling process.
This includes issuing a confirmation letter to affected remitters upon request, to prove that their money had been remitted through them into China and contains information on the source of funds, such as whether it was from the remitter's employment.
This is to facilitate the unfreezing of the accounts.
Adding that the government recognises the frustrations faced by the affected remitters, SPF/MAS wrote:
"The Singapore government has no jurisdiction over the beneficiary bank accounts frozen by the PRC (People's Republic of China) law enforcement agencies. Nevertheless, we are in close contact with the PRC government on the information required to facilitate the PRC law enforcement agencies’ decision on unfreezing of the accounts."
It added that the government understands the frustration faced by the affected remitters, and urged them to seek redress within Singapore's legal framework.
"SPF will not hesitate to take enforcement action against anyone who breaks the law in Singapore, including the organisation of or participation in a public assembly without a police permit," the statement added.
Top photo via Shin Min Daily News