Financial watchdog urges Singapore to get tougher on money-laundering
Singapore must take more aggressive action against complex cross-border money-laundering including prosecuting individuals and seizing illicit proceeds, a global financial crimes watchdog said.
The Paris-based Financial Action task Force (FAqF) said in a review the city-state has made significant improvements in its anti-money laundering and counter-terrorist financing framework since the last assessment in 2008.
It said, however, that Singapore needs to do more, especially in prosecuting bigger cases where the crime is committed in another country and the proceeds are laundered in Singapore, one of Asia´s top financial centres.
“Singapore provided information that it was pursuing some complex cases involving transnational fraud and corruption,” it said.
“However, Singapore has prosecuted few foreign predicate money-laundering cases outside of wire transfer frauds involving money mules/shell companies and has confiscated low amounts of proceeds of crime.”
The term “foreign predicate” refers to cases originating in other countries, with proceeds going through Singapore. Singapore closely guards its reputation for financial integrity and has admitted that money-laundering hurts its image.
This year it launched an investigation into billions of dollars of illicit fund flows related to Malaysian state investment fund 1MDB amid allegations some of the money passed through Singapore´s banking system.
Switzerland and the United States are also carrying out their own probes of accounts and transfers linked to 1MDB.
Singapore should “more aggressively target the more complex cases expected of a sophisticated financial centre” while it pursues less complex offences involving money mules and unlicensed money lenders, said the FAqF report, which did not specifically refer to 1MDB.
For its report the FAqF used data gathered in 2015 and did not include actions taken this year. “Singapore should take steps to improve the capability of its law enforcement agencies to proactively identify and investigate money-laundering, particularly complex and foreign predicate” cases, it said.
Authorities should also “more proactively pursue the confiscation of proceeds of crime and make greater use of the seizure and confiscation powers” under local laws, it said.
Reacting to the FAqF findings, a joint statement from the Ministry of Home Affairs, Ministry of Finance and the Monetary Authority of Singapore said law enforcement agencies would strengthen their capabilities to identify and investigate transnational money-laundering cases.
The Financial Intelligence Unit “will develop more sophisticated data analytics capabilities as part of this effort”, the statement said. Singapore´s central bank in May this year kicked out Switzerland´s BSI Bank, which has been linked to 1MDB.
In July authorities said they had seized nearly $180 million in assets through investigations into the 1MDB scandal. An ex-BSI banker and another man have been charged in a Singapore court with various offences and several others are being questioned in relation to the 1MDB case.