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Singapore vulnerable to money laundering, terrorist financing

SINGAPORE — The Republic is potentially vulnerable to money laundering and terrorist financing, and several sectors will require stronger oversight even though the regulatory regime is robust across the board, a national report said today (Jan 10).

A woman travels up an escalator to attend the Singapore Exchange (SGX) third quarter results briefing in Singapore on April 19, 2011. Photo: Reuters

A woman travels up an escalator to attend the Singapore Exchange (SGX) third quarter results briefing in Singapore on April 19, 2011. Photo: Reuters

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SINGAPORE — The Republic is potentially vulnerable to money laundering and terrorist financing, and several sectors will require stronger oversight even though the regulatory regime is robust across the board, a national report said today (Jan 10).

The inaugural national risk assessment report on money laundering and terrorist financing risks is the result of a two-year exercise that covered 14 financial sectors such as full banks and money changers, and eight non-financial sectors such as casinos and moneylenders.

Internationally-oriented and cash intensive sectors are particularly exposed to the risks, the report found.

“Full banks face higher inherent risks, owing to their large customer volumes and the international nature and the international nature of their transactions,” it said.

“Controls in banks are the most developed, but there’s scope for improvement in the areas of trade finance and correspondent banking.”

In the non-financial sectors, corporate service providers like law and accounting firms are also a sector with a higher level of money laundering and terrorist financing risks. In response, the Accounting and Corporate Regulatory Authority has proposed new legislation that will come into effect this year.

But improvements can be made to strengthen the fast growing pawnbrokers sector, the report added, and the Insolvency and Public Trustee’s Office aims to also introduce a new regime for the sector this year.

Meanwhile, the report highlights several emerging issue areas for further study. These include virtual currencies, which lack a set of global regulatory standards currently, and the Singapore Freeport, a storage vault for valuables launched here in 2010.

“We will mitigate the risks identified in the report by working with the private sector and regulatory agencies to build a strong culture of suspicious transaction reporting,” Mr Tan Boon Gin, director of the Commercial Affairs Department said.

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