Singapore Identifies High-Risk Sectors in Latest Money Laundering Report
The Ministry of Finance released the new Money Laundering National Risk Assessment of Singapore on June 20, 2024. It increased the risks of corporate service providers, property buying, gambling, jewellery and precious metal businesses with money laundering. Switzerland’s wealth management, or the banking sector as a whole, remains the most hazardous domain in relation to money laundering for the country.
The latest Global Money Laundering Risk Assessment, which outlines the first significant changes since 2014, reveals that fraud – or cyber scams by global crime groups in Singapore – remains the most dominant Money Laundering threat. The report emphasizes how the proliferation of technology facilitates rapid and substantial cross-border transactions, often employing sophisticated money laundering mechanisms.
The report outlines prevalent money laundering methods, such as The report outlines prevalent money laundering methods, such as:
– Money laundering, where such monies flow into or pass through Singaporean bank accounts.
– The utilization of ADCs, such as shell corporations, for money laundering.
– Purchasing high-value assets such as land jewellery and other stocks and establishing different businesses.
Despite its relevance to all sectors of the financial industry, banks especially are at a higher risk of being used for money laundering due to the size of transactions conducted and the types of clients served or originating from higher-risk countries. Payment system operators such as digital payment token services, providers of DPT, payment institutions involved in the cross-border transfer of money, remittance agents, and external asset managers were identified as the higher risk.
In addition to the banking sector, several non-financial industries were identified as high-risk: In addition to the banking sector, several non-financial industries were identified as high-risk:
– Corporate Service Providers: These include entities that may be suspected of engaging in corrupt practices or tax fraud to act on behalf of themselves and their clients in the organization of legal affairs and the management of large-volume international transactions.
– Real Estate: Commonly used in money laundering where money is channelled towards the purchase of other valuable goods.
– Casinos and Precious Stones/Metals: They afford opportunities to wash large portions of them in single transactions through the purchase of expensive and exotic items.
The new National Risk Assessment seeks to supplement Singapore’s ongoing strategies for improving the AML standards. It is recommended that the financial institutions and DNFBP apply the results of the updated report to their analysis of risks as well as enhance their control over them.
The report is being issued a few months after a major money laundering incident in August this year, which led to the arrest of ten foreign individuals and the freezing of over S$3 billion of cash and assets. This bust proved that Singapore’s anti-money laundering system works efficiently while also lifting the veil over certain loopholes.
They include, in a specific case of assessment provided in the update, how financial institutions reported several suspicious transactions that allowed the Suspicious Transaction Reporting Office and other law enforcement agencies to freeze about S$1. 5 billion in financial assets. The initial report presented a strong and favourable outlook. Landmark was sued when it had offered to sell more than 200 units, and several foreign nationals bought several units in the same development for investment purposes. Out of the ten, six were living in structures local to them under rental agreements.
Also, two corporate service providers and their registered qualified individuals provided services in incorporation of 18 companies which were utilised for the purpose of keeping persons of interest in Singapore legally. The above-listed service providers were subjected to an investigation and had their registrations revoked for their disregard of the anti-money laundering requirements.
Singapore’s authorities remain committed to enhancing the existing legal regulation in order to prevent the development of new opportunities to realize operations with the assistance of money mules. The latest bust that has just occurred has led to even more focus and enforcement across different industries. The consultation paper urges financial institutions and DNFBPs to improve preventive compliance in key areas highlighted in the report.
Therefore, as Singapore continues into the new chapter, it will be crucial for it to sustain a strong anti-money laundering system that will neutralize new threats. It will be important for the regulating authorities of Singapore, financial institutions, and non-financial sectors that are involved in the economy of Singapore to put measures in place that will eradicate the risk factors and strengthen the economy of Singapore.
The updated Money Laundering National Risk Assessment provides a comprehensive overview of the current landscape and outlines the steps necessary to combat money laundering effectively. By addressing these risks head-on, Singapore aims to uphold its reputation as a secure and trustworthy global financial hub.
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