Financial Crime World

Singapore Takes Tough Stance Against Money Laundering and Terrorism Financing

In an effort to prevent money laundering (ML) and terrorism financing (TF), Singapore has adopted a whole-of-government approach that involves multiple agencies working together to combat these financial crimes.

The Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Steering Committee

The country’s AML/CFT policy objectives are twofold: to detect, deter, and prevent ML and TF, and to protect the integrity of its financial system from illegal activities and illicit fund flows. To achieve these objectives, Singapore has put in place a sound and comprehensive legal, institutional, policy, and supervisory framework.

Key Components of Singapore’s AML/CFT Efforts

  • Low crime rate
  • Intolerance for corruption
  • Efficient judiciary
  • Close international cooperation with other jurisdictions
  • Established culture of compliance
  • Preventive approach that combines:
    • Tough licensing and comprehensive reporting requirements
    • Strict AML/CFT regulations
    • Risk-based supervision of relevant financial and non-financial sectors

Enhancing Private Sector Stakeholders’ Understanding of ML/TF Risks

Singapore enhances private sector stakeholders’ understanding of ML/TF risks and promotes a culture of compliance. Decisive law enforcement action is taken against ML/TF activity, including that relating to foreign crimes, and assistance is provided to other jurisdictions through formal and informal channels.

Environmental Crime Money Laundering National Risk Assessment (NRA)

Singapore’s Environmental Crime Money Laundering NRA has identified the country’s key exposure to environmental crime money laundering as stemming from its position as an international financial center and a trading and transit hub. The NRA recommends that relevant law enforcement agencies, financial intelligence units, policy, and supervisory agencies stay vigilant of the risks identified and raise private sector awareness.

Terrorism Financing National Risk Assessment 2020

Singapore’s Terrorism Financing National Risk Assessment 2020 found that Singapore is exposed to TF threats posed by terrorist groups both regionally and internationally. Certain sectors, such as money remittance and banks, are more vulnerable to TF threats due to their services being easily accessible.

Five-Point Strategy to Combat Terrorism Financing

  1. Coordinated and comprehensive risk identification
  2. Strong legal and sanctions frameworks
  3. Robust regulatory regime and risk-targeted supervisory framework
  4. Decisive law enforcement actions
  5. International partnerships and cooperation

National Strategy for Countering the Financing of Terrorism

Singapore’s National Strategy for Countering the Financing of Terrorism serves as a roadmap to guide the development of future action plans to effectively prevent, detect, investigate, and enforce against TF. The strategy is guided by five key pillars:

  1. Coordinated and comprehensive risk identification
  2. Strong legal and sanctions frameworks
  3. Robust regulatory regime and risk-targeted supervisory framework
  4. Decisive law enforcement actions
  5. International partnerships and cooperation

Conclusion

By adopting a whole-of-government approach and implementing these strategies, Singapore aims to maintain its reputation as a financial hub while preventing the misuse of its financial system for ML and TF purposes.