Singapore Unveils Updated Risk Assessment on Money Laundering

Singapore Unveils Updated Risk Assessment on Money Laundering


Singapore recently published its updated Money Laundering (ML) National Risk Assessment (NRA). This comprehensive assessment, a collaborative effort involving supervisory and law enforcement agencies, the Suspicious Transaction Reporting Office (STRO), private sector entities, and international counterparts, synthesizes the current ML risks facing the nation.

Since the last assessment in 2014, Singapore has been diligently monitoring money laundering risks, conducting thematic assessments on the misuse of legal persons, virtual assets, and environmental crime. These efforts ensure timely identification and mitigation of risks by relevant stakeholders.

Exposure Due to Economic Openness

Singapore’s status as a global financial center and trading hub exposes it to significant money laundering risks. The country's economic openness and sophisticated financial system are attractive to criminals seeking to launder or move illicit funds. Moreover, Singapore is susceptible to being a site for converting illicit funds into assets like real estate and precious stones. The evolving economic and geopolitical landscapes have amplified these risks, while technological advancements have facilitated rapid and complex cross-border transactions, often involving sophisticated money laundering structures.

The updated assessment underscores several key points:

  • Primary ML Threats: Singapore faces major money laundering threats from fraud, particularly cyber-enabled fraud orchestrated by overseas criminal syndicates. Other significant threats include foreign predicate crimes such as organized crime, corruption, tax crimes, and trade-based money laundering.
  • Common ML Typologies: The most frequent money laundering methods involve illicit funds flowing through Singaporean bank accounts, misuse of shell companies, and placement of illicit funds in high-value assets like real estate and precious stones.
  • High-Risk Sectors: The banking sector, including wealth management, poses the highest money laundering risks due to its role in handling large volumes of transactions and servicing high-risk customers. Designated Non-Financial Businesses and Professions (DNFBPs), particularly corporate service providers, real estate, licensed trust companies, casinos, and precious stones and metals sectors, also present significant risks.
  • Digital Payment Token (DPT) Services: Despite forming a small portion of global activities, the digital payment token services sector in Singapore has seen a rise in money laundering cases. The authorities are closely monitoring this sector due to its vulnerability to exploitation.

Commitment to AML Efforts

Singapore is steadfast in its commitment to addressing the identified risks. The findings from the updated ML NRA will steer ongoing efforts to ensure that the AML regime remains robust and responsive to new and emerging threats. This includes targeted initiatives to raise awareness among Financial Institutions (FIs) and DNFBPs, and enhancing detection, disruption, and enforcement actions against illicit activities.

The updated ML NRA serves as a vital guide for all stakeholders, encouraging FIs and DNFBPs to assess their risks and strengthen their controls accordingly. By aligning their practices with the insights from the assessment, these sectors can better safeguard against money laundering activities.

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