Singapore widens campaign against financial crime

Written by Kapronasia || July 09 2024

The banking system in Singapore has been under greater scrutiny ever since a few banks operating in the city were ensnared in Malaysia’s massive 1MDB scandal. There is an inherent contradiction that all financial hubs face when they try to attract the ultra-wealthy and their assets, but also want to ensure the highest degree of compliance. Inevitably, some clients have something to hide. When there is possible unusual activity, banks have to make the call whether it is necessary to flag the transactions and report them. Thus it is not surprising that Singapore said in a new report that its banking sector poses the highest money laundering risks following a scandal involving more than S$3 billion (US$2.2 billion) in illicit assets.

The 126-page report released in late June notes that the city-state’s  authorities have observed a wide range of laundering techniques being used in the country, involving bank accounts, payment accounts, shell companies and other complex structures and arrangements. Singaporean authorities seized more than S$1.5 billion from bank accounts in the recent money laundering scandal. The funds were in accounts related to 10 convicted individuals who were born in China and 17 other suspects still at large.

To combat financial crime, Singapore has taken a number of steps. On the one hand, it has required more information from family offices and hedge funds while increasing the shuttering of dormant firms. On the other, on July 2, its parliament introduced the Anti-Money Laundering and Other Matters Bill, which will allow authorities to prosecute suspected offenders without the need to directly link illicit gains to the original crime. At present, it is sometimes difficult to obtain evidence from victims and authorities overseas, especially when criminal proceeds come from other jurisdictions.

Additionally, the legislation will permit law enforcement officers to investigate money laundering linked to serious environmental crimes like illegal mining outside of Singapore, by designating them as serious offences under the city-state’s laws. Singapore can currently only investigate a crime outside the country if it is also a serious offense under its own law.

Separately, casinos will also face greater scrutiny going forward. Before the end of the year, there likely will be new rules coming into force that will require Marina Bay Sands and Resorts World Sentosa to conduct enhanced due diligence checks when more than $2,950 is deposited into a customer’s account. This is to be below the current threshold of $3,700. Singapore has said that this adjustment reflects its intention to further align its own requirements to those of the Financial Action Task Force (FATF).