Singapore Updates Money Laundering Risk Assessment First 2014
Singapore has released an updated Money Laundering National Risk Assessment (ML NRA) as part of its ongoing efforts to combat financial crime. The assessment takes into consideration the changing risk landscape, with the increasing use of digital banking systems and Singapore’s growing position as a global financial hub.
The updated ML NRA incorporates input from supervisory and law enforcement agencies, as well as Singapore’s Financial Intelligence Unit, the Suspicious Transaction Reporting Office (STRO), and feedback from private sector entities and foreign authorities. It builds on the previous ML NRA from 2014, taking into account new money laundering risks such as the misuse of legal persons and virtual assets.
One of the key factors contributing to the elevated risks is the rapid digitisation of services in recent years, which has enabled quicker cross-border transactions.
David Chew, head of delegation to the Financial Action Task Force and director of the Singapore Police Force’s Commercial Affairs Department, emphasised the importance of the ML NRA: “The money laundering national risk assessment is a cornerstone document of Singapore’s anti-money laundering regime. It sets out the key overall risk context for Singapore’s anti-money laundering strategy, which focuses on prevention, detection, and enforcement.”
The updated assessment highlights the emergence of new money laundering threats, such as cyber-enabled fraud and foreign organised crime. These pose significantly higher risks than were observed in the 2014 ML NRA. Although the assessment is not a response to any specific case, it reflects the current situation and trends in financial crime.
Fraud, particularly cyber-enabled fraud, orchestrated by criminal syndicates based overseas, is identified as the biggest threat in today’s landscape. Other key risks include organised crime, corruption, tax crimes, and trade-based money laundering.
One high-profile case that made headlines in Singapore and abroad was the seizure of over $3 billion worth of cash, properties, luxury goods, and other assets belonging to 10 Chinese nationals – known as the “Fujian Gang” – involved in a money laundering scheme. This case, which has been ongoing since August 2023, highlights the risk of illicit funds flowing into or through Singapore via bank accounts and the misuse of legal persons, such as shell companies.
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The updated ML NRA also includes new sectors previously not covered in the 2014 version, such as digital payment token service providers. It also expands its scope to include money laundering through high-value assets, such as real estate, precious stones, and metals.
According to the assessment, Singapore’s banking sector poses the highest money laundering risks, in line with international typologies. This is due to Singapore’s reputation as a reputable financial hub with an efficient system for facilitating large volumes of financial transactions. The three local banks – DBS Group Holdings, Overseas-Chinese Banking Corporation (OCBC), and United Overseas Bank (UOB) – as well as international banks operating in Singapore, have been implicated in the “Fujian Gang” case, with more than $1.5 billion seized.
Among the other parties identified as posing higher money laundering risks are corporate service providers (CSPs). In January, the Accounting and Corporate Regulatory Authority (ACRA) cancelled the registration of a director of a filing agent for anti-money laundering breaches. The breaches included failure to perform additional customer due diligence measures and not inquiring about beneficial ownership.
The assessment’s findings will play a crucial role in Singapore’s efforts to maintain an effective anti-money laundering regime and stay ahead of identified risks. This includes raising the awareness of financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs) on new and emerging money laundering risks. It also aims to facilitate more timely detection, disruption, and enforcement of illicit activities by law enforcement agencies.