Skip to main content

Advertisement

Advertisement

S’pore needs to do more over cross-border money-laundering cases: Global task force

SINGAPORE — As a leading financial hub, Singapore should do more to pursue cross-border offenders in complex transnational cases in its fight against money laundering and terrorism financing, a report by the global Financial Action Task Force (FATF) showed on Tuesday (Sept 27).

SINGAPORE — As a leading financial hub, Singapore should do more to pursue cross-border offenders in complex transnational cases in its fight against money laundering and terrorism financing, a report by the global Financial Action Task Force (FATF) showed on Tuesday (Sept 27).

Given its low domestic crime rate, Singapore’s exposure to money laundering risks largely arises from offences committed overseas, the FATF said. The Republic is also situated in a region where several terrorist groups operate actively and have carried out attacks in the last 10 years, it noted.

“In particular, Singapore’s status as both a major global financial centre and an international trade/transportation hub makes it vulnerable to becoming a transit point for illicit funds from abroad,” FATF said in its report, adding that 77 per cent of funds managed here are foreign-sourced.

FATF is an inter-governmental body that develops and promotes policies for anti-money laundering and countering of the financing of terrorism (AML/CFT). Its latest assessment of Singapore’s AML/CFT regime tracked the country’s progress since the last evaluation in 2008, with a particular focus on actions taken in the three years running up to FATF’s on-site visit in November and December last year.

The Paris-based body said Singapore has a reasonable understanding of its money laundering risks and have taken steps to mitigate them. However, it said “moderate gaps” remained.

“Limitations in Singapore’s understanding of its nexus with foreign money laundering risks may have some ramifications for Singapore’s ability to proactively identify and address serious foreign predicate money laundering and transnational money laundering networks,” it said.

“This has led to most of Singapore’s transnational money laundering cases so far relating to offenders involved in smaller-scale and less complex forms of money laundering offending, whereas Singapore should also more aggressively target the more complex cases expected of a sophisticated financial centre.”

FATF also cited the lack of criminal prosecutions and convictions for terrorism financing, although it acknowledged the use of “preventive and other powers” by the Internal Security Department to address such threats. The agency also said law enforcement agencies here should make greater use of seizure and confiscation powers to seize funds and assets linked to crime and strengthen its AML regime for precious stones and metals dealers.

In a separate joint statement, the Ministry of Home Affairs (MHA), Ministry of Finance (MOF) and Monetary Authority of Singapore (MAS) said the Republic has a robust regime to tackle terrorism financing and “was not accorded sufficient credit by FATF assessors”.

“Singapore maintains that it has a robust regime to combat terrorism financing using the Internal Security Act (ISA) which had effectively dealt with 17 terrorism financing cases in the past without recourse to prosecution,” the statement said.

The three agencies added that further steps will be taken to strengthen Singapore’s AML/CFT regime. They said law enforcement agencies here will strengthen their capabilities to identify and investigate more complex transnational cases.

“The Financial Intelligence Unit under the Commercial Affairs Department will develop more sophisticated data analytics capabilities as part of this effort,” they said.

Singapore has, in the past few months, stepped up effort in the AML/CFT area, including setting up a dedicated AML Department under MAS. The Republic’s ongoing probe into breaches linked to Malaysian state fund 1Malaysia Development Berhad (1MDB) also resulted in the shutdown of Swiss bank BSI in Singapore, prosecution of individuals connected to the case, and the seizure of some S$240 million worth of assets.

More recently, Singapore convicted six Bangladeshis of terrorism financing under the Terrorism (Suppression of Financing) Act. However, as these convictions took place after the FATF assessment, these cases were not taken into account in the report.

With the growing complexities of money laundering and terrorism financing activities, financial institutions here will have to remain vigilant in detecting irregularities and devising countermeasures, said Ms Loretta Yuen, head of legal and regulatory compliance at OCBC Bank.

“As a Singapore bank, OCBC will continue to work closely with the MAS and the rest of the industry in its concerted efforts to further strengthen Singapore’s AML/CFT regime. We believe this is critical to sustaining the long-term growth and success of the financial sector and will add to Singapore’s standing as an international financial centre,” she said.

Read more of the latest in

Advertisement

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.