Statute Details
- Title: Financial Services and Markets (Sanctions and Freezing of Assets of Persons — Somalia) Regulations 2023
- Act Code: FSMA2022-S236-2023
- Type: Subsidiary legislation (SL)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Authorising Act: Financial Services and Markets Act 2022
- Legal Basis: Powers under section 192, read with sections 15(1)(b) and 219(d) of the Financial Services and Markets Act 2022
- Citation and Commencement: Comes into operation on 28 April 2023
- Regulation Number: SL 236/2023
- Status: Current version as at 27 March 2026
- Key Provisions: Regulation 5 (asset freezing), Regulation 6 (prohibition on supply of assistance/services), Regulation 7 (duty to provide information), Regulation 8 (revocation), Regulation 9 (saving and transitional provisions)
What Is This Legislation About?
The Financial Services and Markets (Sanctions and Freezing of Assets of Persons — Somalia) Regulations 2023 (“Somalia Sanctions Regulations”) are Singapore’s implementing regulations for United Nations Security Council sanctions relating to Somalia. In particular, the regulations are designed to give effect to UN Security Council Resolution 1844 (2008), which established measures including the freezing of assets and restrictions on providing certain financial services to designated persons.
In practical terms, the regulations create binding obligations for financial institutions in Singapore. If a financial institution holds or controls funds, financial assets, or economic resources that are owned or controlled (directly or indirectly) by a “designated person” on the UN list, the institution must freeze those assets and ensure they are not made available for the benefit of that designated person. The regulations also prohibit financial institutions from providing certain forms of assistance or financial services connected to military activities and weapons-related supply chains.
The regulations operate as a compliance framework: they define who counts as a “designated person,” what must be frozen, what is prohibited, and what information must be reported to MAS. They also include transitional provisions to ensure continuity where assets were already frozen under the earlier 2010 regulations.
What Are the Key Provisions?
1. Definitions and the “designated person” concept (Regulation 4)
The regulations’ compliance triggers depend heavily on the definition of “designated person.” A “designated person” is any individual or entity set out in the UN list, subject to specified conditions. The UN list is maintained and updated by the UN Security Council or its relevant committee pursuant to Resolution 1844 (2008). The regulations incorporate the UN list by reference and treat it as dynamic—updated from time to time on the official UN website.
Regulation 4(2) clarifies how designation status changes take effect. If an individual or entity is added to the UN list on or after 28 April 2023, they are treated as a designated person with effect from the date immediately following the date of addition. If removed, they cease to be designated persons from the date of removal. If particulars are modified, the modifications take effect from the date immediately following the date of modification. This matters for screening and operational controls: institutions must manage “cut-off” dates and ensure their internal compliance systems align with these legal effect dates.
2. Mandatory asset freezing and non-availability (Regulation 5)
Regulation 5 is the core obligation. Subject to limited exceptions, any financial institution that has possession, custody or control in Singapore of funds, financial assets, or economic resources owned or controlled, directly or indirectly, by a designated person must do two things immediately:
- Freeze all such funds, financial assets, or economic resources; and
- Ensure non-availability—the assets must not be made available, whether directly or indirectly, to or for the benefit of the designated person.
Regulation 5(2) expands the scope by treating certain holdings as owned or controlled by the designated person. Specifically, funds/assets are treated as designated-person property if they are held by (a) an entity owned or controlled (directly or indirectly) by a designated person, or (b) an individual or entity acting on behalf of or under the direction of a designated person. This “control” and “acting on behalf” approach is designed to prevent circumvention through intermediaries.
3. Exceptions and MAS determinations (Regulation 5(3))
Regulation 5(3) provides that the freezing requirement does not apply to certain assets where MAS has determined that the funds are necessary for specified purposes. These exceptions are narrow and operationally significant:
- Basic expenses, including payments for foodstuff, rent, discharge of a mortgage, medicine, medical treatment, taxes, insurance premiums, and public utility charges.
- Exclusively for (i) reasonable professional fees and reimbursement of expenses connected with legal services, or (ii) fees/service charges for routine holding or maintenance of frozen assets.
- Extraordinary expenses (subject to MAS determination).
- Judicial, administrative or arbitral liens or judgments entered before 20 November 2008, provided the lien/judgment is not for the benefit of a designated person. In such cases, the frozen assets may be used to satisfy the lien or judgment.
For practitioners, the key point is that these carve-outs are not automatic. They depend on a determination by MAS. Therefore, compliance teams should treat any request to access frozen assets as requiring formal engagement with MAS and documentary support to show the purpose falls within the permitted categories.
4. Prohibition on supply of assistance and weapons-related services (Regulation 6)
Regulation 6 imposes a separate prohibition from asset freezing. A financial institution must not directly or indirectly supply:
- Financial or other assistance; or
- Investment, brokering or other financial services,
related to military activities or to the supply, sale, transfer, manufacture, maintenance, or use of weapons and military equipment to any designated person.
This provision targets the provision of services and assistance that facilitate weapons-related activity. It is not limited to transactions involving frozen assets; rather, it is tied to the purpose and subject matter of the assistance/services. Practically, this requires enhanced due diligence and transaction monitoring, including understanding the end-use and end-user context for relevant financial flows.
5. Duty to provide information (Regulation 7)
Regulation 7 creates an immediate reporting obligation. Every financial institution must immediately inform MAS and provide further information upon request if it:
- Has possession, custody or control in Singapore of funds/financial assets/economic resources owned or controlled by a designated person;
- Has information about any transaction or proposed transaction involving such designated-person-owned/controlled assets; or
- Has information about any act or thing prohibited by Regulation 6.
The “immediately inform” standard is strict. For compliance, this means institutions should have escalation pathways that can meet immediacy requirements, including internal triage, legal review, and rapid communication with MAS when a match is identified or when a potentially prohibited service is contemplated.
6. Revocation and transitional continuity (Regulations 8 and 9)
Regulation 8 revokes the earlier Monetary Authority of Singapore (Sanctions and Freezing of Assets of Persons — Somalia) Regulations 2010 (G.N. No. S 706/2010). Regulation 9 then ensures continuity:
- Frozen assets under the revoked regulations are treated as frozen under the new regulations.
- Any MAS determinations under the revoked regulations that were in force immediately before 28 April 2023 are treated as determinations under the new regulations.
- Information provided under the revoked regulations is treated as having been provided under Regulation 7, and any further information requirements are treated as requirements under the new Regulation 7.
This avoids compliance gaps during the transition and preserves the legal effect of prior MAS decisions and institutional reporting.
How Is This Legislation Structured?
The Somalia Sanctions Regulations are concise and structured around nine regulations:
- Regulation 1: Citation and commencement (28 April 2023).
- Regulation 2: Object—assisting in giving effect to UN Security Council Resolution 1844 (2008).
- Regulation 3: Application—applies to all financial institutions in Singapore.
- Regulation 4: Definitions, including the UN list, committee, and designated person, and the legal effect of list updates.
- Regulation 5: Asset freezing and non-availability obligations, plus MAS-determined exceptions.
- Regulation 6: Prohibition on supplying assistance and weapons/military-related financial services to designated persons.
- Regulation 7: Duty to provide information to MAS.
- Regulation 8: Revocation of the 2010 regulations.
- Regulation 9: Saving and transitional provisions to preserve existing freezes, determinations, and reporting.
Who Does This Legislation Apply To?
Regulation 3 states that the regulations apply to all financial institutions in Singapore. While the extract does not reproduce the definition of “financial institution,” the authorising framework (Financial Services and Markets Act 2022) indicates that the scope is intended to be broad across regulated financial services sectors.
Operationally, the obligations apply to institutions that have possession, custody or control in Singapore of relevant assets or information. This “in Singapore” nexus is important: it ties the legal duties to assets and activities within Singapore’s jurisdictional reach, even where the designated person is located abroad.
Why Is This Legislation Important?
These regulations are important because they translate UN sanctions into enforceable Singapore obligations. For financial institutions, the asset freezing and non-availability requirements are among the most consequential sanctions duties: failure to freeze or to prevent access to designated-person assets can create serious regulatory and legal exposure.
From a practitioner’s perspective, the most significant compliance challenges typically arise in three areas. First, screening and designation updates: because the legal effect of additions/removals/modifications is tied to specific dates, institutions must ensure their sanctions screening systems and governance processes can implement changes promptly and accurately. Second, determination-based exceptions: access to frozen assets for basic or extraordinary expenses, legal fees, routine maintenance, or pre-2008 liens requires MAS determinations—meaning institutions must build processes for evidence gathering and formal requests. Third, prohibited services: Regulation 6 requires institutions to assess whether financial assistance or services are related to military activities or weapons/military equipment supply chains, which often demands transaction-level due diligence and end-use/end-user understanding.
Finally, the immediate duty to inform MAS under Regulation 7 makes reporting a central compliance function. Institutions should treat sanctions matches and potential prohibited activities as events requiring rapid escalation, documentation, and communication to MAS.
Related Legislation
- Financial Services and Markets Act 2022
- Markets Act 2022
- Monetary Authority of Singapore (Sanctions and Freezing of Assets of Persons — Somalia) Regulations 2010 (revoked by Regulation 8)
Source Documents
This article provides an overview of the Financial Services and Markets (Sanctions and Freezing of Assets of Persons — Somalia) Regulations 2023 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.