Singapore has strong framework to combat money laundering, terrorism financing, says global task force

An assessment of Singapore's financial system by a global task force has found that the Republic has a strong framework to combat money laundering and terrorism financing.
An assessment of Singapore's financial system by a global task force has found that the Republic has a strong framework to combat money laundering and terrorism financing. ST PHOTO: KUA CHEE SIONG

SINGAPORE - An assessment of Singapore's financial system by a global task force has found that the Republic has a strong framework to combat money laundering and terrorism financing.

Nonetheless, the Financial Action Task Force (FATF) found areas for improvement, noting for example that Singapore should strengthen financial institutions' understanding of emerging risks and pursue more cases of complex transnational money laundering offences.

In a joint statement issued on Tuesday(Sept 27), the Ministry of Home Affairs, the Ministry of Finance and the Monetary Authority of Singapore noted that Singapore has made significant enhancements to its anti-money laundering and countering of financing of terrorism (AML/CFT) regime since the last FATF assessment in 2008.

The latest report card, the first since the FATF introduced tighter standards in 2012, determined that Singapore's AML/CFT regime achieved effective outcomes in several important areas.

For one, it found that Singapore has a strong framework for preventive measures, supervision, enforcement, the confiscation of the proceeds of crime and targeted financial sanctions against terrorism financing.

Singapore's financial sector is robustly supervised and it has well-functioning systems in place to enable prompt and effective law enforcement against money laundering and predicate offences.

The assessment also found that Singapore has highly sophisticated national coordination structures which can identify and evaluate money laundering and terrorism financing risks and oversee actions to mitigate these risks.

The FATF also praised Singapore for having a good framework for international cooperation in combating these crimes, saying authorities here make high quality requests and provide high quality assistance through a wide range of channels, including mutual legal assistance, intelligence sharing and extradition.

The FATF assessment turned up some areas where Singapore could do better too, and Singapore will take follow-up actions in these areas, the joint statement said.

For example, the MAS will step up industry engagement to strengthen financial institutions' understanding of emerging risks and share best practices in controls and risk management.

Singapore's law enforcement agencies, who have been pursuing complex transnational money laundering cases such as the 1MDB probe, will strengthen their capabilities to identify and investigate more of such cases.

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

The three government bodies that issued the joint statement noted, however, that Singapore's regime to combat terrorism financing (TF) was not given sufficient credit by the FATF assessors, as the FATF only takes into account criminal prosecutions and convictions.

"Singapore maintains that it has a robust regime to combat TF using the Internal Security Act, which had effectively dealt with 17 TF cases in the past without recourse to prosecution," the statement said.

More recently, six individuals were charged and convicted of TF under the Terrorism (Suppression of Financing) Act. However, these convictions took place after the FATF assessment and were also not taken into account.