Title: Singapore’s Financial Crimes: A Hub of Opulence and Risk

Singapore, the economic powerhouse situated at the southern tip of the Malay Peninsula, is known for its strong financial services sector and extensive external trade. With a ranking of fifth least corrupt country in the world by Transparency International, Singapore is considered a hub of success and innovation. However, beneath its gleaming skyline and bustling ports, the city-state faces various financial risks.

Financial Risks in Singapore

According to the Financial Action Task Force’s (FATF) last mutual evaluation report published in 2019, Singapore is largely compliant with 17 of the 20 FATF recommendations for combating financial crimes, partially compliant with three, and fully compliant with the remaining 11. Despite no evidence of international sanctions, Singapore’s position as a global financial and transit hub puts it at risk for various forms of financial crime.

Money Laundering

One such risk is Money Laundering, where Singapore’s low large currency reporting requirements and the burgeoning growth of its private banking and asset management sectors pose potential risks. Singapore’s ranking in the Basel AML Index has improved, with Singapore scoring a medium risk in the 2022 report.

Bribery and Corruption

Another concern is Bribery and Corruption, despite being low in Singapore, remain a concern due to its international business dealings, making it an attractive target for transnational organized crime and other predicate offenses in its neighbors’ territory. In the Corruption Perceptions Index 2022, Singapore ranked fifth with rigorous audit controls in place.

Drug and Weapons Trafficking

Singapore’s central location in Asia and prominent position as a trade hub make it a vulnerable target for Drug and Weapons Trafficking, with it being a major distributor of chemicals used in the illicit production of narcotics and a gateway for the transshipment of small arms into neighboring countries.

Environmental Crime

Environmental Crime is a growing concern in Singapore, which acts as a major transit hub for illegally traded wildlife and their derivatives, with high demand from both domestic and international markets.

Modern Slavery and Human Trafficking

The large number of foreign work permit holders, making up around a quarter of Singapore’s labor force, are at risk of Modern Slavery and Human Trafficking. They can be vulnerable to debt bondage and sex trafficking.

Cybercrime and Fraud

Cybercrime is on the rise, with a 25% increase in the number of scam and cybercrime cases in 2022, totaling over $660 million in losses. Social media and messaging platforms are the most common vectors for these crimes. Fraud cases, including e-commerce fraud and app-based shopping platform fraud, have also seen a significant increase. The majority of perpetrators being young people.

Financial Crimes: Terrorist Financing and Tax Crime

Whilst there is little evidence of terrorist financing in Singapore, given its proximity to active terrorist groups and regional hub status, it remains vulnerable to money remittances, banks, non-profit organizations, and precious stones and metals dealers as potential risk areas. Singapore’s secretive nature provides an attractive environment for Tax Crime and Financial Secrecy, with the country ranked second in percentage of respondents who have experienced fraud in the IBM Global Financial Fraud Impact Report 2022. Its tax treaties, tax exemptions, and loopholes have been exploited for tax abuse and tax evasion.

Singapore: Combating Financial Crimes

Despite these risks, Singapore continues to maintain stringent regulatory regimes and law enforcement efforts to combat financial crimes and uphold its reputation as a leading financial hub in Asia.

Economic Powerhouse

The tiny sovereign city-state is renowned for its economic prowess, boasting a strong financial services sector and extensive external trade.

Hub of Success and Innovation

Ranked as the fifth least corrupt country in the world, Singapore is seen as a hub of success and innovation.

FATF: Mutual Evaluation Report

Singapore is largely compliant with 17 of the 20 FATF recommendations for combating financial crimes, partially compliant with three, and fully compliant with the remaining 11.

Money Laundering: Basel AML Index

Singapore’s ranking in the Basel AML Index has improved, with Singapore scoring a medium risk in the 2022 report.

Social media and messaging platforms are the most common vectors for cybercrime.

Regulatory Regimes and Law Enforcement

Singapore continues to maintain stringent regulatory regimes and law enforcement efforts to combat financial crimes and uphold its reputation as a leading financial hub in Asia.