Financial Crime World

Singapore’s Crackdown on Money Laundering and Financial Crime: A Collaborative Effort Between Regulators

Financial crime continues to pose a significant threat to the global economic landscape, and Singapore, as a major financial hub, is not immune. In recent years, the city-state has seen several high-profile cases, most notably the 1MDB scandal, which led to the investigation of links between financiers in Singapore and the troubled Malaysian state fund. The fallout from this case resulted in the shutting down of BSI Bank and the Singapore branch of Falcon Private Bank, and imposed fines totaling S$30 million.

Financial Crimes in Singapore: Statistics

Between 1st July 2017, and 31st December 2018:

  • One criminal conviction
  • S$16.8 million in financial penalties and compositions
  • S$698,000 in civil penalties were meted out for financial crimes.

Additionally, 19 prohibition orders, 37 reprimands, 223 warnings, and 444 supervisory reminders were issued.

Challenges in Curbing Financial Crime

The increasing volume and complexity of financial transactions, along with the surge in cross-border transactions, have presented significant challenges to the authorities in Singapore, who aim to curb the spread of financial crime.

Government Agencies and Regulatory Bodies in Singapore

The Commercial Affairs Department (CAD)

The Commercial Affairs Department (CAD) is the principal white-collar crime enforcement agency in Singapore, under the Singapore Police Force. CAD specializes in commercial fraud and financial fraud cases.

The Monetary Authority of Singapore (MAS)

MAS conducts investigations and audits, ensuring that financial institutions comply with provisions and regulations under statutes like the Securities and Futures Act (SFA). MAS is also Singapore’s central bank and regulates and supervises financial institutions in the country.

Joint Investigations

Since March 2015, MAS and CAD have collaborated on joint investigations. Previously, each agency conducted its own investigations, but this arrangement streamlines and optimizes the process, allowing any market misconduct to be swiftly detected, investigated, and efficiently dealt with.

Significant Instances of Market Manipulation

One of the most significant instances of market manipulation in Singapore’s history occurred in October 2013, involving the penny stock crash of Asiasons Capital Ltd, Blumont Group Ltd, and LionGold Corp Ltd. This led to the formation of the joint investigations arrangement, which covers offenses such as insider trading and market manipulation.

Insider Dealing and Market Abuse

The Securities and Futures Act (SFA) is the primary legislation addressing insider dealing and market abuse in Singapore. Relevant offenses under the SFA include false trading, market-rigging transactions, market manipulation, making false statements, fraudulently inducing persons to deal with capital market products, insider trading, and the employment of manipulative and deceptive devices. Punishments include fines of up to S$250,000 and imprisonment for up to seven years.

Fraud and Offenses

Corporate fraud in Singapore includes theft, dishonest misappropriation, criminal breach of trust, cheating, dishonest or fraudulent disposition of property or payment of a debt, dishonest or fraudulent execution of a deed of transfer, and forgery and falsification of accounts. Individuals and companies can be held accountable for committing or attempting to commit these offenses.

Regulatory provisions against corruption in Singapore are primarily outlined in the Prevention of Corruption Act (Cap. 241). Offenses related to public servants are set out in Chapter IX of the Penal Code, while the Corruption Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap. 65A) addresses the seizure of the proceeds of corruption.

The Corrupt Practices Investigation Bureau (CPIB)

The dedicated Corrupt Practices Investigation Bureau (CPIB) is the agency responsible for investigating corruption in Singapore. It reports directly to the prime minister, ensuring its independence from other government agencies to prevent any potential interference.

Money Laundering and Terrorist Financing

As a member of the Financial Action Task Force (FATF), Singapore has implemented strong legal and regulatory frameworks to prevent money laundering, terrorist financing, and the financing of proliferation. The Corrupt Practices Investigation Bureau (CPIB) and the Singapore Police Force (CAD) enforce these policies.

To further protect consumers and safeguard public trust in financial institutions, the Monetary Authority of Singapore (MAS) has announced several measures, including:

  1. Ensuring timely and adequate disclosure of corporate information by listed companies
  2. Improving the business conduct of financial advisers and their representatives
  3. Ensuring that financial institutions comply with AML/CFT requirements
  4. Reinforcing brokerage houses’ internal controls to detect and deter market abuse
  5. Conducting surveillance and investigations into suspected insider trading

MAS has also implemented “Project Apollo,” an intelligence tool designed to assist enforcement officers in sorting cases based on importance, detecting market manipulation with data analytics, and increasing the precision of AML/CFT monitoring.

Penalties for Breaches of AML/CFT Requirements

In 2018, MAS imposed penalties of S$5.2m on Standard Chartered Bank (Singapore Branch) and S$1.2m on Standard Chartered Trust (Singapore) Limited for breaches of their anti-money laundering (AML) and countering financing of terrorism (CFT) requirements.

Average Case Resolution Time

On average, it takes about 33 months to review and investigate criminal prosecution cases, followed by 30 months for civil penalty cases, six months for regulatory actions, and three months for cases that involve external agency referrals. The average time taken for all concluded cases was about eight months.