Singapore updates money laundering risk assessment, the first since 2014

By Ashley Lo and Douglas Toh

/ The Edge Singapore |

June 21, 2024 11:48 AM SGT

Singapore has published an updated Money Laundering National Risk Assessment (ML NRA), as the risk landscape continues to evolve amid the widespread use of digital banking systems and Singapore’s growing position as an international financial hub.

The assessment compiles money laundering risks observed by supervisory and law enforcement agencies, and importantly, input from Singapore’s Financial Intelligence Unit, the Suspicious Transaction Reporting Office (STRO), as well as feedback from private sector entities and counterpart foreign authorities.

Since the last ML NRA in 2014, risk assessments such as the abuse of legal persons and virtual assets have been conducted, in an effort to surface such crimes in a timely manner across relevant parties. Importantly, the unfolding economic landscape and digitisation of services in recent years have contributed to an elevation of these risks, resulting in increased rapid transactions across borders.

“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,” says David Chew, head of delegation to the financial action task force and director, commercial affairs department, Singapore Police Force, on the assessment’s launch.

“This strategy focuses on three limbs: prevention, detection, and finally enforcement. Singapore continues to be exposed to key foreign money laundering threats, namely, corruption, tax, as well as trade-based money laundering,” he adds.

“In addition, cyber-enabled fraud, commonly known as scams, as well as foreign organised crimes, are two new key money laundering threats of concern, posing significantly higher risks than that were observed in the last ML NRA,” says Chew.

Although the assessment’s launch does not stem from any one specific case, the updated ML NRA notes that the biggest threats today arrive in the form of fraud, particularly foreign and domestic cyber-enabled fraud, orchestrated by overseas-based criminal syndicates. Other key ML threats highlighted relate to more global crimes such as organised crime, corruption, tax crimes, and trade-based money laundering.

Since August 2023, more than $3 billion worth of cash, properties, luxury bags and cars among others belonging to 10 Chinese nationals - dubbed the “Fujian Gang” - with differing passports were seized by Singapore authorities in a money-laundering case that captured headlines within the nation and abroad.

While the updated ML NRA highlights the most common classifications of money laundering like illicit funds flowing into or through Singapore via bank accounts and the misuse of legal persons such as shell companies, it includes new sectors previously uncovered in the 2014 iteration, like digital payment token service providers. The updated assessment will also include the eliciting of money in high-value assets such as real estate, precious stones and metals in its classifications.

According to the ML NRA, “consistent with international typologies”, Singapore’s banking sector poses the highest money laundering risks, due to Singapore’s healthy international standing and efficient system in facilitating large volumes of financial transactions.

All three local banks, DBS Group Holdings, Overseas-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB), as well as international banks operating here ranging from Credit Suisse and Citigroup to RHB, Standard Chartered and Maybank, have accounts linked to the Fujian Gang case, with more than $1.5 billion seized.

In this latest ML NRA, the authorities have also flagged the role of so-called corporate service providers (CSPs) among those posing higher money laundering risks. In January, the Accounting and Corporate Regulatory Authority (ACRA) cancelled the registration of one Wang Junjie, who is a director of filing agent LW Business Consultancy, for anti-money laundering breaches involving the Fujian Gang.

According to ACRA on Jan 19, the breaches committed by Wang include failure to perform additional customer due diligence measures when a customer is not physically present during onboarding; not inquiring if there exists any beneficial owner in relation to some of its customers; and failing to perform risk assessments in relation to some of its customers.

Local media reported last September that one "J.J" is listed as director, secretary, and shareholder of some 185 companies here, with nine of these companies linked to several individuals later found guilty of various money laundering offences. "J.J" is confirmed to be Wang, who has in his personal capacity also been struck off as a "qualified individual" by ACRA.

The assessment’s findings will aim to ensure that Singapore keeps a firm hand on its anti-money laundering regime, keeping pace with the identified risks. These include making financial institutions and Designated Non-Financial Businesses and Professions (DNFBP) aware of key, new and emerging money laundering risks, and allowing more timely detection, disruption and enforcement of illicit activities by law enforcement.

This article first appeared on The Edge Singapore.

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AML money laundering

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