Financial Crime World

Singapore Cracks Down on Financial Crime: A Collaborative Approach between CAD and MAS

Financial crime continues to pose a significant threat to the global economic landscape, and Singapore, as a major financial hub, is not exempt. The city-state has encountered high-profile cases in recent years, such as the investigation into links between financiers in Singapore and the troubled Malaysian state fund, 1MDB.

Threat of Financial Crime in Singapore

  • Significant threat to global economic landscape
  • High-profile cases in recent years
  • Resulted in fines and closure of banks

Data on Enforcement Actions

According to the latest data released by the Monetary Authority of Singapore (MAS), between 1 July 2017 and 31 December 2018:

  • One criminal conviction
  • S$16.8m in financial penalties and compositions
  • S$698,000 in civil penalties
  • 19 prohibition orders
  • 37 reprimands
  • 223 warnings
  • 444 supervisory reminders

Challenges in Containing Financial Crime

  • Increasing volume and complexity of financial transactions
  • Increase in cross-border activities

Key Regulatory Bodies and Authorities

Commercial Affairs Department (CAD)

  • Primary white-collar crime enforcement agency
  • Various specialist departments and groups focusing on commercial and financial fraud

Monetary Authority of Singapore (MAS)

  • Conducts investigations and audits
  • Regulates and supervises financial institutions
  • Central bank of Singapore

Attorney General’s Chambers

  • Sole prosecution powers
  • Responsible for prosecution of all offenses in Singapore
  • Economic Crimes and Governance Division responsible for prosecuting financial crimes and corruption cases

Collaboration between CAD and MAS

  • Established a joint investigations arrangement in 2015
  • Enables investigations to be optimized and streamlined
  • Combines investigative resources and expertise

Insider Dealing and Market Abuse

  • Offenses under Securities and Futures Act (SFA)
  • Punishment includes a fine of up to S$250,000 and imprisonment for a term of up to seven years

Fraud and Offenses

  • Offenses under Penal Code and Companies Act
  • Companies and their officers can be charged as offenders

Bribery and Corruption

  • Prevention of Corruption Act (Cap. 241) and Chapter IX of Penal Code set out the main regulatory provisions
  • Corruption, Drug Trafficking, and Other Serious Crimes (Confiscation of Benefits) Act facilitates the seizure of the fruits of corruption
  • Record fine involving a Singapore-listed entity - Keppel Offshore & Marine (US$422m)

Money Laundering and Terrorist Financing

  • Member of the Financial Action Task Force (FATF)
  • Robust legal and regulatory framework
  • CDSA is the key legislation for money laundering and terrorism financing
  • Organised Crime Act 2015 criminalizes the commission of serious offenses by organized criminal groups involving money laundering

Timeline for Enforcing Financial Laws

  • Criminal prosecutions took around 33 months
  • Cases with civil penalties took around 30 months
  • Regulatory actions took six months
  • Referrals to external agencies took three months
  • Average time taken for all concluded cases was approximately eight months

Conclusion

  • The increasing volume and complexity of financial transactions and greater ease of money transfers across borders make enforcing financial laws and combating financial crime a significant challenge for Singaporean authorities.
  • The close collaboration between CAD and MAS will likely contribute to effective enforcement and deterrence of financial crime in the city-state.