Financial Crime World

Headline: Singapore: Prosperity and Progress, Tainted by Financial Crimes and Corruption

Singapore’s Economic Powerhouse Status

  • Singapore is a highly developed city-state and financial hub in Southeast Asia.
  • Ranked among top five most expensive cities globally by Bloomberg.
  • Home to numerous multinational corporations, particularly in IT, electronics, pharmaceuticals, and financial services sectors.

Risks and Vulnerabilities

Despite its economic success, Singapore faces risks, including:

  1. Financial Crimes
  2. Bribery and Corruption
  3. Money Laundering
  4. Drug and Weapons Trafficking, Environmental Crime
  5. Modern Slavery and Human Trafficking
  6. Tax Crimes, Financial Secrecy
  7. Terrorist Financing

FATF Assessment

According to the Financial Action Task Force (FATF), Singapore is:

  • Compliant with 20 Recommendations.
  • Largely compliant with 17 Recommendations.
  • Partially compliant with 3 Recommendations.

Bribery and Corruption

  • Ranked 5th globally with low perceptions of corruption in 2022 Transparency International Corruption Perceptions Index.
  • Strong governance and rigorous audit controls.
  • Foreign workers are at risk of trafficking, debt bondage, and sex trafficking.

Money Laundering

  • Principal commercial nexus for trade and financial flows between Asian markets and the Middle East.
  • Vulnerable to money laundering through trade-based money laundering and shell companies.

Drug and Weapons Trafficking, Environmental Crime

  • Significant source and transit hub for precursor chemicals used in illicit drug production.
  • Major distributor of acetic anhydride, a key substance in heroin production.
  • Large market for illegal wildlife products.

Modern Slavery and Human Trafficking

  • Foreign workers, primarily from less developed countries, are vulnerable to trafficking.
  • Instances of debt bondage, forced labor, and sex trafficking reported.

Tax Crimes, Financial Secrecy

  • Responsible for 3.9% of global tax havenery and estimated to lose USD 4.2 billion annually through tax abuse.
  • Offers various tax exemptions and loopholes, creating risks to financial system.

Terrorist Financing

  • Neighboring countries have experienced attacks from active terrorist groups like ISIS, Al-Qaeda, and Jemaah Islamiyah.
  • Monetary Authority of Singapore has identified several risk areas for terrorist financing.