Financial Crime World

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Singapore’s AML/CFT Framework: Crucial Regulations for Financial Integrity

SINGAPORE - As a major financial hub in Southeast Asia, Singapore has taken a robust approach to combat money laundering (ML) and counter-financing of terrorism (CFT). The country’s Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) framework is designed to detect, deter, and prevent ML and TF activities, while protecting the integrity of its financial system.

Key Components of Singapore’s AML/CFT Framework

Singapore’s AML/CFT policy objectives are clear: to detect, deter, and prevent ML, associated predicate offences, and terrorism financing; and to protect the integrity of its financial system from illegal activities and illicit fund flows. To achieve this, the country has implemented a range of measures, including:

  • Robust AML/CFT legislation
  • Close partnership with the business community
  • Strict enforcement action and ongoing supervision
  • Active international cooperation

The Financial Investigation Division

The Financial Investigation Division of the Commercial Affairs Department (CAD) is responsible for enforcing Singapore’s AML/CFT regime. The division detects ML/TF activities, investigates and prosecutes ML/TF offences, and seizes and confiscates illegal proceeds.

Six Strategies to Combat Money Laundering

Cad has outlined six strategies to combat money laundering:

  • Pursue Money Laundering in All Appropriate Cases: CAD will ensure that money laundering is pursued in all appropriate cases, including those arising from foreign predicate offences.
  • Promote Effective International Cooperation: CAD will proactively engage foreign counterparts and conduct parallel/joint investigations with foreign authorities to combat ML/TF.
  • Asset Confiscation as a Desired Outcome: CAD aims to seize criminal proceeds at the earliest opportunity to prevent dissipation.
  • Address ML Risks Identified in National Risk Assessment (NRA): CAD will proactively engage regulators and relevant agencies to mitigate risks identified in the NRA.
  • Strengthen Collaboration with Suspicious Transaction Reporting Office (STRO): CAD will work closely with STRO to develop “red flag indicators” for reporting entities and support outreach efforts.
  • Attention to Emerging Trends/Reduce “Unknown Unknowns”: CAD will continue to monitor emerging trends, engage foreign counterparts, and explore ways to detect ML cases in situations where there are few ML cases.

Conclusion

Singapore’s AML/CFT framework is a crucial component of the country’s financial regulatory landscape. By implementing robust measures to combat ML/TF, Singapore aims to maintain its reputation as a well-regulated major financial centre and protect the integrity of its financial system.