Singapore Updates Money Laundering Risk Assessment First 2014
Singapore has recently released an updated version of its Money Laundering National Risk Assessment (ML NRA) as the country’s risk landscape continues to evolve. This comes as a response to the widespread use of digital banking systems and Singapore’s growing position as an international financial hub.
The assessment contains a compilation of money laundering risks observed by supervisory and law enforcement agencies, as well as input from Singapore’s Financial Intelligence Unit, the Suspicious Transaction Reporting Office (STRO). Feedback from private sector entities and counterpart foreign authorities was also taken into consideration.
Compared to the previous ML NRA published in 2014, this updated version includes new risk assessments such as the abuse of legal persons and virtual assets. These were conducted to better identify such crimes and address them in a timely manner. The changing economic landscape and increasing digitization of services in recent years have also contributed to an escalation of these risks, particularly in terms of quick cross-border transactions.
David Chew, head of delegation to the Financial Action Task Force and director of the Commercial Affairs Department at the Singapore Police Force, describes the ML NRA as a cornerstone document of the country’s anti-money laundering regime. He emphasizes the importance of the assessment in setting the overall risk context for Singapore’s anti-money laundering strategy, which focuses on prevention, detection, and enforcement.
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Chew also highlights the key foreign money laundering threats that Singapore continues to be exposed to, including corruption, tax crimes, and trade-based money laundering. The updated ML NRA also identifies two new high-risk threats – cyber-enabled fraud and foreign organized crime – which pose significantly higher risks compared to the last assessment.
While the launch of the assessment is not linked to a specific case, it notes that the most prevalent threats today involve fraud, particularly cyber-enabled fraud orchestrated by overseas criminal syndicates. Other major money laundering risks highlighted include organized crime, corruption, tax crimes, and trade-based money laundering.
In August 2023, Singapore authorities seized over $3 billion worth of cash, properties, luxury items, and cars from 10 Chinese nationals involved in a high-profile money laundering case known as the “Fujian Gang”. This case was widely reported both within the nation and internationally.
Apart from traditional money laundering methods such as using bank accounts and shell companies, the updated ML NRA also covers new sectors previously not included in the 2014 version. This includes digital payment token service providers and the use of high-value assets like real estate, precious stones, and metals for money laundering.
According to the assessment, Singapore’s banking sector poses the highest money laundering risk, in line with international typologies. This is due to its strong international reputation and efficient system for facilitating large volumes of financial transactions. Notably, all three local banks (DBS Group Holdings, Overseas-Chinese Banking Corporation, and United Overseas Bank) and international banks operating in Singapore have accounts linked to the Fujian Gang case, with over $1.5 billion seized.
The updated ML NRA also flags the role of corporate service providers (CSPs) as posing higher risks for money laundering. In January, one Wang Junjie, a director of filing agent LW Business Consultancy, had his registration with the Accounting and Corporate Regulatory Authority (ACRA) cancelled for breaches of anti-money laundering regulations in connection with the Fujian Gang case. These breaches include failure to perform necessary due diligence measures for clients and not conducting risk assessments.
Local media reported last September that “J.J.”, listed as a director, secretary, and shareholder of 185 companies in Singapore, was directly involved in nine of the money laundering offences committed by individuals linked to the Fujian Gang. “J.J.” is confirmed to be Wang, who has been struck off as a “qualified individual” by ACRA.
The findings of the assessment will be used to ensure that Singapore maintains a strong anti-money laundering regime and stays on top of the identified risks. This includes raising awareness among financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs) of new and emerging money laundering risks, allowing for more timely detection and enforcement by law enforcement agencies.