Singapore Updates Money Laundering Risk Assessment First 2014
Singapore has recently released an updated Money Laundering National Risk Assessment (ML NRA) in response to the changing risk landscape. With the widespread use of digital banking systems and Singapore’s growing position as an international financial hub, it is important to continuously assess the risks associated with money laundering.
The ML NRA is a compilation of risks observed by supervisory and law enforcement agencies, as well as input from Singapore’s Financial Intelligence Unit, the Suspicious Transaction Reporting Office (STRO), and private sector entities. This assessment is essential in identifying and addressing money laundering risks in a timely manner.
Compared to the previous ML NRA published in 2014, the updated version conducted further assessments on the abuse of legal persons and virtual assets to surface any potential crimes across relevant parties. The rapid growth of digital services and the changing economic landscape have contributed to an increased risk of money laundering, especially in cross-border transactions.
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David Chew, head of delegation to the Financial Action Task Force and director of the Commercial Affairs Department at the Singapore Police Force, highlighted the importance of the ML NRA in Singapore’s anti-money laundering strategy. This strategy focuses on prevention, detection, and enforcement to combat key foreign threats such as corruption, tax crimes, and trade-based money laundering.
The updated ML NRA noted that the biggest threats today are in the form of fraud, specifically foreign and domestic cyber-enabled fraud orchestrated by overseas-based criminal syndicates. Other key threats include organised crime, corruption, tax crimes, and trade-based money laundering.
In August 2023, Singapore authorities seized more than $3 billion worth of assets belonging to 10 Chinese nationals in a high-profile money-laundering case. This case highlights the importance of staying vigilant in combating money laundering and the need to update the ML NRA regularly.
One major update in the assessment is the inclusion of digital payment token service providers as a high-risk sector. The updated ML NRA also includes the misuse of high-value assets such as real estate, precious stones, and metals in its classifications.
According to the assessment, Singapore’s banking sector poses the highest money laundering risk due to the country’s international standing and efficient system in facilitating large volumes of financial transactions. All three local banks, as well as international banks operating in Singapore, have accounts linked to the Fujian Gang case.
The role of corporate service providers (CSPs) in money laundering was also highlighted in the assessment. In January, one Wang Junjie, a director of filing agent LW Business Consultancy, had his registration cancelled for anti-money laundering breaches related to the Fujian Gang case. Reports have also surfaced of Wang being listed as director, secretary, and shareholder of 185 companies, with nine of these companies linked to individuals found guilty of money laundering offences.
The authorities have flagged CSPs as posing higher money laundering risks, and this serves as a reminder to these entities to remain vigilant in their due diligence and risk assessment processes.
The updated ML NRA aims to keep Singapore’s anti-money laundering regime in check and in line with the identified risks. This includes creating awareness among financial institutions and Designated Non-Financial Businesses and Professions (DNFBP) of new and emerging money laundering risks, allowing for timely detection, disruption, and enforcement of illicit activities.