(Yicai) Dec. 20 -- Singapore’s central bank has suspended remittances to China through non-bank or non-card third-party channels for three months after SGD13 million (USD9.8 million) of funds were frozen in beneficiaries’ accounts by Chinese law enforcement agencies.

The temporary halt will begin on Jan. 1, the Monetary Authority of Singapore said in a statement late on Dec. 18. The MAS may even extend the period, according to a source in the city state.

The move comes after police in Singapore received more than 670 reports of bank accounts being frozen after SGD13 million was remitted to China. It is unclear why the accounts were blocked.

China has been clamping down on money laundering in recent years. People sending funds to China, such as donations, family allowances, inheritance, and investment income, must provide detailed information if the amount exceeds USD50,000, according to Shao Jun, head of the Singapore office of Beijing Jingsh Law Firm.

Some use private channels instead of banks due to quicker transfers and better rates, but they risk being flagged up as illegal foreign exchange swaps, Shao pointed out.

A Chinese person working in Singapore said they had used third-party companies to remit money in the past, mainly for a more favorable exchange rate, but in future they would stick to safe channels such as China UnionPay.

Editor: Emmi Laine