Financial Crime World

Combating Financing of Terrorism Guidelines in Singapore: Expert Analysis

Singapore’s status as an international transport hub and financial centre presents inherent risks to cross-border money-laundering and terrorism financing opportunities. Despite a strict legislative framework in place, businesses that are internationally-oriented and cash-intensive remain vulnerable to such threats.

Vulnerable Industries

  • Retail and private banks
  • Remittance agents
  • Money-changers
  • Internet-based stored value facility holders
  • Corporate service providers
  • Casinos
  • Pawn brokers

According to expert analysis by Bryan Tan and Nathanael Lim from Pinsent Masons MPillay, the legislative framework in Singapore is designed to combat financing of terrorism (CFT) and money-laundering. This includes:

Relevant Legislation

  • Criminal Justice Act 2007
  • Terrorism (Suppression of Financing) Act 2002
  • Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act

Offences under the CDSA and TSFA include:

  • Failing to report suspicious transactions
  • Concealing or disguising the nature, source, location or ownership of funds or property
  • Providing or collecting money or other property with the intention of using it for terrorism financing
  • Providing or collecting financial services, such as banking, securities or insurance services, for the purpose of facilitating terrorist activities

Risk-Based Approach

A key aspect in combating CFT and money-laundering is the adoption of a risk-based approach to perform know-your-customer or customer due diligence (CDD) measures. This involves:

  • Identifying and assessing the level of risk associated with each customer
  • Implementing appropriate measures to mitigate that risk
  • High-risk customers may require more comprehensive CDD procedures than low-risk ones

Importance of Ongoing Training and Awareness

The expert analysis highlights the importance of:

  • Ongoing training and awareness among employees to identify and report suspicious transactions
  • Regular review and update of CDD procedures to stay ahead of evolving threats

By adopting a robust risk-based approach, businesses can ensure compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) regulations. This requires ongoing efforts to stay vigilant against emerging threats and adapt to changing regulatory requirements.