MAS: freeze remittances to China for the next three months

It is effective from 1 January 2024 to 31 March.

The Monetary Authority of Singapore (MAS) has issued a notice directing licensed payment service providers offering cross-border money transfer services (remittance companies) to suspend, for the next three months, the use of non-bank and non-card channels when transmitting money to individuals in the People’s Republic of China (PRC).

Specifically, during this period, remittance companies in Singapore providing cross-border money transfer services to China are restricted to engaging only a bank, an operator of a card network (such as Union Pay International), or a licensed financial institution that has engaged a bank or a card network operator for the transmission of money. 

This directive is effective from 1 January 2024 to 31 March and follows reports of remittances made by individuals (mostly PRC nationals working in Singapore) through Singaporean remittance companies being frozen in their beneficiaries’ bank accounts in China.

To keep transaction costs low, remittance companies typically use overseas third-party agents rather than banks to complete remittances from Singapore to China. 

Whilst the majority of these transactions are successful, a small proportion of remittances have faced issues, with funds being frozen in beneficiaries’ bank accounts by PRC law enforcement agencies. 

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The reasons for these freezes are unclear. To minimise risks to consumers, MAS has decided to temporarily suspend the use of non-bank and non-card channels for money transfers to China.

MAS has actively engaged with the remittance companies involved, instructing them to assist affected customers, enhance their complaints handling process, and review their arrangements with partners for the PRC remittance corridor. 

The suspension will take effect 14 days from the date of the notice (1 January 2024), allowing remittance companies time to adjust their practices and complete existing remittances.

MAS cautions the public against hastily remitting funds to China through overseas third-party agents during this 14-day period. 

Individuals are advised to use alternative channels, such as banks or card networks, offered by remittance companies to avoid inadvertent freezing of funds or accounts. 

MAS will closely monitor the situation and practices of remittance companies, with the possibility of terminating or extending the suspension after March 31, 2024, or implementing further measures as necessary.