Statute Details
- Title: Financial Services and Markets (Sanctions and Freezing of Assets of Persons — Somalia) Regulations 2023
- Act Code: FSMA2022-S236-2023
- Legislative Type: Subsidiary legislation (SL)
- Enacting Authority: Monetary Authority of Singapore (MAS)
- Authorising Act: Financial Services and Markets Act 2022
- Commencement: 28 April 2023
- Regulation Number: SL 236/2023
- Status: Current version as at 27 Mar 2026
- Primary Purpose: Implement UN Security Council sanctions measures (UNSCR 1844 (2008)) relating to Somalia by freezing assets and restricting financial services to designated persons
- Key Provisions (from extract): Regulations 1–9 (notably: Reg 5 freezing; Reg 6 prohibition on assistance/services; Reg 7 information duty; Reg 8 revocation; Reg 9 saving/transitional)
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 legal mechanism for giving effect to targeted financial sanctions imposed by the United Nations Security Council. In particular, the Regulations are designed to assist in implementing United Nations Security Council Resolution 1844 (2008), which established measures relating to Somalia, including restrictions aimed at individuals and entities identified by the UN as being involved in activities undermining peace, security, or stability.
In practical terms, the Regulations require financial institutions in Singapore to freeze funds and other economic resources belonging to “designated persons” (as set out on the UN List maintained by the UN Security Council or its relevant committee). They also prohibit financial institutions from providing certain forms of assistance or financial services to those designated persons where the services relate to military activities or to weapons and military equipment.
The Regulations are structured to operate in real time with the UN listing process. They define “designated person” by reference to the UN List and specify how designation status changes when individuals or entities are added, removed, or modified on the UN List. This ensures that Singapore’s domestic obligations track the UN’s evolving sanctions designations.
What Are the Key Provisions?
1. Definitions and the “designated person” concept (Regulation 4)
The Regulations’ operative obligations hinge on whether a person is a “designated person”. Regulation 4 defines “designated person” by reference to individuals or entities set out in the UN List, subject to specified conditions. The UN List is updated from time to time by the UN Security Council or its committee and is made available on the official UN website.
Crucially, Regulation 4(2) provides the temporal effect of UN listing changes. If an individual or entity is added to the UN List on or after 28 April 2023, the person is treated as a designated person with effect from the day immediately following the date of addition. If removed, the person ceases to be designated with effect from the date of removal. If particulars are modified, the modification is treated as effective from the day immediately following the date of modification. This “immediate next-day” approach is important for compliance systems that screen counterparties and update sanctions lists.
2. Mandatory freezing of assets (Regulation 5)
Regulation 5 is the core freezing provision. Subject to limited exceptions, any financial institution that has in its possession, custody or control in Singapore any funds, financial assets or economic resources owned or controlled, directly or indirectly, by a designated person must do two things:
- Freeze immediately all such funds, financial assets or economic resources; and
- Ensure they are not made available directly or indirectly to or for the benefit of the designated person.
Regulation 5(2) expands the scope of what counts as “owned or controlled” by a designated person. It treats as belonging to the designated person funds and assets held by (a) any entity owned or controlled (directly or indirectly) by the designated person, and (b) any individual or entity who acts on behalf of or under the direction of the designated person. This is a common sanctions drafting technique that prevents circumvention through intermediaries and controlled entities.
3. Exceptions and authorisations by the Authority (Regulation 5(3))
Freezing obligations are not absolute. Regulation 5(3) provides that the requirement in Regulation 5(1) does not apply to funds, financial assets or economic resources that MAS (the “Authority”) determines are necessary for specific purposes. These include:
- Basic expenses (including foodstuff, rent, mortgage discharge, medicine, medical treatment, taxes, insurance premiums, and public utility charges);
- Exclusively for reasonable professional fees and reimbursement of expenses related to legal services; and for routine holding or maintenance of frozen funds/assets/resources;
- Extraordinary expenses (subject to MAS determination); and
- Judicial/administrative/arbitral liens or judgments entered before 20 November 2008, provided the lien or judgment is not for the benefit of a designated person.
For practitioners, the key point is that these carve-outs are not self-executing. They depend on a determination by the Authority. Accordingly, compliance teams should treat any proposed use of frozen assets as requiring engagement with MAS, supported by evidence that the purpose falls within Regulation 5(3) and that the conditions (including the “not for the benefit of a designated person” requirement for liens/judgments) are satisfied.
4. Prohibition on supplying assistance and certain financial services (Regulation 6)
Regulation 6 imposes a separate and additional restriction beyond freezing. A financial institution must not directly or indirectly supply:
- financial or other assistance; or
- investment, brokering or other financial services,
that are related to military activities or to the supply, sale, transfer, manufacture, maintenance or use of weapons and military equipment to any designated person.
This prohibition is targeted to the subject matter of the assistance/services (military activities and weapons/military equipment), rather than being limited to the provision of funds that are already frozen. It therefore requires institutions to assess not only whether a counterparty is designated, but also whether the nature and purpose of the transaction falls within the prohibited categories. In practice, this often requires enhanced due diligence on transaction purpose, end-use, and end-user, and careful review of documentation and contractual terms.
5. Duty to provide information (Regulation 7)
Regulation 7 creates an immediate reporting obligation. Every financial institution that:
- 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 funds/assets/resources; or
- has information about any act or thing prohibited by Regulation 6,
must immediately inform the Authority and provide further information the Authority may require.
“Immediately” is a compliance-critical term. It implies prompt internal escalation and rapid external notification once a relevant trigger is identified. For legal teams, this provision is also important because it supports enforcement and enables MAS to supervise and coordinate sanctions implementation across the financial sector.
6. Revocation and transitional treatment (Regulations 8 and 9)
Regulation 8 revokes the earlier MAS regulations: the Monetary Authority of Singapore (Sanctions and Freezing of Assets of Persons — Somalia) Regulations 2010 (G.N. No. S 706/2010). Regulation 9 then provides saving and transitional provisions.
Under Regulation 9(1), any funds/assets/resources frozen under the revoked Regulations are treated as frozen under the new Regulation 5(1). Regulation 9(2) preserves determinations made by the Authority under the earlier Regulation 5(3) that were in force immediately before 28 April 2023, treating them as determinations under the new Regulations. Regulation 9(3) similarly preserves information provided and continuing requirements for further information. This avoids compliance disruption and ensures continuity of sanctions administration.
How Is This Legislation Structured?
The Somalia Sanctions Regulations are concise and operate as a targeted sanctions instrument. The structure is as follows:
- Regulation 1 (Citation and commencement): identifies the instrument and its commencement date (28 April 2023).
- Regulation 2 (Object): states the purpose: to assist in giving effect to UNSCR 1844 (2008).
- Regulation 3 (Application): applies the Regulations to all financial institutions in Singapore.
- Regulation 4 (Definitions): defines key terms, especially “designated person”, and explains how UN List updates affect designation status.
- Regulation 5 (Assets to be frozen): sets the freezing obligation and the MAS-determined exceptions.
- Regulation 6 (Prohibition on supply of assistance/services): restricts assistance and financial services related to military activities and weapons/military equipment.
- Regulation 7 (Duty to provide information): mandates immediate reporting to MAS.
- Regulation 8 (Revocation): revokes the 2010 Somalia sanctions regulations.
- Regulation 9 (Saving and transitional provisions): preserves existing freezes, determinations, and reporting continuity.
Who Does This Legislation Apply To?
Regulation 3 provides that the Regulations apply to all financial institutions in Singapore. While the extract does not list the categories of “financial institution”, the authorising framework (Financial Services and Markets Act 2022) and MAS’s sanctions practice typically mean regulated entities such as banks, insurers, capital markets intermediaries, and other entities carrying out financial services activities under Singapore’s regulatory regime.
Operationally, the obligations attach where the institution has possession, custody or control in Singapore of relevant assets, or where it has information about relevant transactions or prohibited acts/services. This “possession/custody/control in Singapore” nexus is significant for cross-border groups: institutions must ensure their compliance coverage extends to Singapore-based accounts, custody arrangements, and systems that control or administer funds and assets.
Why Is This Legislation Important?
The Somalia Sanctions Regulations are important because they translate UN targeted sanctions into enforceable obligations for Singapore’s financial sector. For practitioners, the Regulations create three practical compliance pillars: (1) asset freezing, (2) transactional restrictions on certain military/weapon-related assistance and services, and (3) mandatory reporting to MAS.
From an enforcement and risk perspective, the Regulations are designed to prevent both direct and indirect access to designated persons’ resources. The inclusion of assets held by controlled entities and persons acting on behalf of designated persons (Regulation 5(2)) addresses common sanctions evasion pathways. The prohibition on assistance/services related to military activities and weapons (Regulation 6) further restricts the financial sector’s ability to facilitate prohibited military-related conduct, even where funds are not already frozen.
Finally, the transitional provisions (Regulations 8 and 9) ensure continuity. Institutions that already froze assets under the 2010 framework can rely on the statutory “carry-over” of freezes and determinations, reducing the risk of inadvertent non-compliance during the regulatory transition.
Related Legislation
- Financial Services and Markets Act 2022 (authorising act; MAS powers to make sanctions regulations)
- Markets Act 2022 (listed in metadata as related legislation)
- UN Security Council Resolution 1844 (2008) (international measure implemented by these Regulations)
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.