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One year on from Singapore’s largest ever money laundering bust, regulators are banking on a "whole-of-government" approach to prevent further illicit funds from entering the jurisdiction’s financial system.
Last week, the Monetary Authority of Singapore (MAS) published its 2024 National Anti-Money Laundering Strategy, laying out its plans to ensure that Singapore retains its reputation as an “open” and “trusted” international financial centre.
It takes into account key money laundering risks observed by agencies over the years, including Singapore’s updated Money Laundering National Risk Assessment.
The assessment is conducted once every ten years, and its latest iteration found that the money laundering threats and typologies faced by Singapore have changed significantly since 2014.
“International typologies and cases observed in Singapore have shown that money laundering is increasingly complex, facilitated by greater inter-connectivity and technological advancements,” said the MAS in its strategy document.
“Criminals, especially international crime syndicates, may abuse different structures, and launder illicit funds and assets through multiple sectors to ‘layer’ or disguise their origin, before integrating these proceeds into all parts of the legitimate economy.
“Combating money laundering thus requires the close coordination and collaborative effort of all stakeholders in the ecosystem.”
As highlighted in the assessment, Singapore faces significant money laundering risks from illicit activities that take place overseas, including cyber fraud, organised crime, corruption and trade-based money laundering.
According to the MAS, fraud is currently the most frequently cited offence in foreign authorities’ requests to Singapore regulators and law enforcement for assistance.
The impact of Singapore’s recording-breaking money laundering case
Given the increasing complexity of money laundering threats, the MAS said it is “critical” that Singapore continues to adopt a “whole-of-government” approach to fight financial crime. “Stakeholders cannot work in silos,” it said.
Much of Singapore’s latest national AML strategy is driven by the Inter-Ministerial Committee (IMC), which was set up in November last year to review the country’s AML framework, following a record-breaking case.
In August last year, the Singapore Police Force (SPF) arrested ten Chinese nationals linked to unlicensed money lending, scams and illegal online gambling operations hosted overseas.
The authorities then seized assets worth more than S$3bn ($2.3bn), including real estate, bank accounts, gold bullion, crypto-assets and luxury items such as cars, watches, handbags and alcohol.
All ten suspects later received jail terms ranging from 13 to 16 months for money laundering, and 17 other suspects remain at large.
Two former bankers, Wang Qiming and Liu Kai, were later charged with helping the convicted money launderers. Wang was a relationship manager at Citibank and Liu worked at Julius Baer.
The IMC brought together officials from the MAS, Ministry of Finance (MOF), Ministry of Law (MOL), Ministry of Manpower (MOM) and Ministry of Home Affairs (MHA) to review Singapore’s AML framework in light of the S$3bn bust.
Based on the IMC’s findings, which were published last month, Singapore’s Inter-Agency Suspicious Transaction Report Analytics Taskforce (ISTRA) has been replaced by a new body known as the AML Case Coordination and Collaboration Network (AC3N).
The AC3N has a wider membership and a higher level of oversight, and therefore allows for more effective coordination of investigative, supervisory and enforcement actions across agencies.
“Through AC3N, law enforcement agencies and sector supervisors will review and coordinate actions with a whole-of-system lens and bolster Singapore’s collective AML defences,” said the MAS.
“AC3N will help triage and prioritise enforcement outcomes for specific complex cases.”
Also following the IMC review, Singapore will further strengthen its “sensemaking” and information-sharing mechanisms within and between government agencies.
For example, it will develop a “whole-of-government” data sharing interface, the National AML Verification Interface for Government Agencies Threat Evaluation (Navigate).
Navigate will be led by the AML/CFT Steering Committee, ensuring oversight from the heads of the MAS, MOF and MHA, and will be supported by the AML/CFT Inter-Agency Committee (IAC).
According to the MAS, Navigate will allow multiple agencies to “seamlessly screen” against one another’s databases and “expeditiously” assess entities of concern due to money laundering risks.
An AML Sensemaking workgroup will also be established, led by the MHA and SPF, and comprising agencies involved in AML policy implementation, such as the MAS and the Accounting and Corporate Regulatory Authority (ACRA).
The AML Sensemaking workgroup will oversee the government’s operational policies and data sharing processes, ensuring that they are up to date with emerging and sophisticated money laundering typologies.
“This AML Sensemaking workgroup will complement the case coordination work overseen by AC3N and the data-sharing on Navigate,” said the MAS.
Finally, authorities will continue to review the effectiveness of Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases (Cosmic), a first-of its-kind platform that allows private-sector entities to share customer information with one another related to money laundering “red flags”.
As covered by Vixio, Cosmic was launched by the MAS in April, but is currently accessible by only six major banks. After two years in operation, the MAS will decide on whether to expand access to other financial institutions (FIs).
Other jurisdictions reforming AML strategy, supervision
In Asia-Pacific, other jurisdictions are enacting, or hoping to enact, similar reforms.
In New Zealand, the government intends to synthesise the country’s current trio of AML supervisory authorities into a single AML “super” regulator.
And in Australia, a major update to the country’s AML laws will see non-financial professionals such as lawyers, real-estate agents and precious metals dealers brought into the AML regime for the first time.
As in Singapore, these reforms are driven partly by Financial Action Task Force (FATF) expectations on the range of activities that ought to be subject to AML rules, and how to ensure effective supervision.
The reforms also aim to “streamline” the AML compliance burden faced by firms that are already subject to AML rules.
