Asset recovery a priority in Singapore’s anti-money laundering regime: PM Wong

SINGAPORE - Anti-money laundering efforts in Singapore saw the authorities seize $6 billion linked to criminal and money laundering activities between January 2019 and June 2024.

About $416 million has been returned to victims, while $1 billion has been forfeited to the state. A large bulk of the remaining sum is linked to ongoing investigations or court proceedings.

The details were published in Singapore’s first-ever National Asset Recovery Strategy, which Prime Minister Lawrence Wong announced on June 26 at the opening of the Financial Action Task Force (FATF) Plenary Meeting.

PM Wong said Singapore has made asset recovery a priority in its national anti-money laundering regime.

The approach sets out how Singapore will deprive criminals of their illicit funds and assets, remove the financial incentives for criminals to launder their illicit proceeds in Singapore, and return these assets to victims.

Through the collective efforts of the money laundering watchdog FATF and its partners, PM Wong said Singapore has made progress against money laundering and terrorism financing at the global level.

“But the success of the global effort against financial crime is also dependent on effective implementation within national borders.

“Singapore is fully committed to doing our part. As an international financial and business hub, we recognise that we face greater money laundering and terrorism financing risks.

“But we are determined to do what is needed to respond to these risks and safeguard Singapore’s reputation as a trusted financial centre,” he said at the event held at the Marina Bay Sands Expo and Convention Centre.

PM Wong said virtual assets and digital payment channels have made it easier for criminals to move and hide their illicit proceeds, and to operate across borders while exploiting the information silos that exist between national law enforcement agencies.

“No country can address these threats by itself. That is why the FATF’s work in leading a coordinated global effort has become more important,” he added.

Over two days, the FATF, the global money laundering and terrorism financing watchdog, will lead sessions attended by delegates from the World Bank, International Monetary Fund, United Nations and other international organisations.

PM Wong highlighted FATF’s progress in recent years in tackling three challenges – the interception of illicit funds; improving transparency of legal entities, such as companies and trusts; and in identifying ways to break down information silos.

Citing Interpol figures, he said around US$2 trillion to US$3 trillion (S$2.7 trillion to S$4.06 trillion) worth of illicit proceeds are channelled through the global financial system annually.

“A very small fraction of these criminal assets is intercepted and recovered, which means that criminals can largely get away with, and profit handsomely from, their crimes,” he added.

PM Wong noted that the latest figures from Interpol showed that the recovery rate from illicit funds is a low 3 per cent, up from 1 per cent a decade ago.

“We need to do better. But at least we are moving in the right direction, and we can aim for even higher recovery rates in the years to come,” he added.

PM Wong said Singapore has continually reviewed and strengthened its legal frameworks to align them with FATF’s standards.

“Over the past few years, we have tightened our regulations to increase transparency on beneficial ownership, introduced new regulations, and strengthened existing laws to address risks related to virtual assets, as well as precious stones and metals dealers.

“We have also strengthened our laws to give our law enforcement agencies more tools and powers to pursue, prosecute and sanction offenders for money laundering offences,” he added.

PM Lawrence Wong speaking at the Financial Action Task Force Plenary at the Marina Bay Sands Expo and Convention Centre Grand Ballroom on June 26, 2024.  ST PHOTO: KEVIN LIM

Legal frameworks, such as the Criminal Procedure Code (CPC) and the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), give law enforcement agencies regulatory power, said the Finance and Home Affairs ministries and the Monetary Authority of Singapore in a joint statement on June 26.

The CPC empowers the authorities to order any individual or entity to produce information, documents or items for criminal investigations.

It also allows law enforcement agencies to seize or issue prohibition of disposal orders to suspected criminal assets.

The CDSA sets a legal obligation, making it an offence if individuals or entities fail to file suspicious transaction reports.

Under the CDSA, the judiciary can issue restrain and charging orders for assets that may be subject to confiscation after court proceedings.

The court can also issue confiscation orders for assets not directly linked to the offences.

The agencies added that to further enforce the rule of law, Singapore will publish a national anti-money laundering strategy and introduce an anti-money laundering Bill by the end of 2024.

PM Wong said that even the most stringent anti-money laundering regimes can be circumvented by determined criminals, who will continuously search for gaps to exploit.

“It is also important that our measures are not overzealous and do not unnecessarily stifle legitimate activities and investments,” he added.

Singapore adopts a risk-based approach, PM Wong said, adding that the country focuses on understanding latest trends and developments in the financial world that can be exploited by criminals, and developing tools and legal frameworks that will allow suspicious individuals and activities to be detected early.

This approach led to one of the largest anti-money laundering operations in the world, he added.

“After we picked up signs of illegal activities, we undertook extensive investigations and we seized more than $3 billion in assets from 27 suspects.

“Ten suspects have since been convicted within a year of their arrest. Around $940 million of their assets have been forfeited to the state, which is more than 90 per cent of what we seized from them,” he said, adding that investigations are ongoing against the 17 other suspects who are currently overseas.

Asset recovery

In response to queries from The Straits Times, a spokesman for the Ministry of Home Affairs said money laundering, fraud and corruption were among the top offences linked to the seizures.

In terms of asset types, the top seizures were in the form of bank accounts, properties, cryptocurrencies and vehicles.

The release of the National Asset Recovery Strategy comes a week after Singapore published its Money Laundering National Risk Assessment, which identified sectors in the economy which are at risk of money laundering.

The recovery strategy comprises four pillars – detecting suspicious or criminal activities; depriving criminals of the ill-gotten gains; delivering maximum recovery of the assets; and deterring criminals from using Singapore to hide, move or use their illicit assets.

In the joint statement, the agencies said that to achieve the asset recovery goal, Singapore will use a whole-of-society approach.

The Singapore Police Force, aided by specialised departments like the Commercial Affairs Department and the Financial Investigation Branch, will be the primary agency investigating money-laundering and other serious crimes.

Meanwhile, the Suspicious Transaction Reporting Office (STRO), which receives and analyses suspicious reports, will help to disseminate information to agencies and regulators.

The agencies noted that the STRO played a key role in helping to uncover the nation’s largest money-laundering network.

Sectoral regulators such as the MAS, the Accounting and Corporate Regulatory Authority, Council for Estate Agencies and Urban Redevelopment Authority will work to ensure institutions and professionals under their charge are up to date in their anti-money laundering controls, said the agencies.

PM Lawrence Wong shaking hands with Mr Agustin García-Lopez Loaeza (left), Ambassador of Mexico to Singapore, on June 26. With them is Financial Action Task Force president T. Raja Kumar (right).  ST PHOTO: KEVIN LIM

They added that Singapore has already deployed the approach in tackling scams with the Anti-Scam Command, which was established in 2022.

Helmed by the SPF, the Anti-Scam Command partners more than 80 institutions including local and foreign banks, non-financial institutions like Grab, and remittance service providers.

Between March and April, the office – in collaboration with partnering banks – sent out more than 16,700 SMS alerts to more than 12,500 scam victims.

This led to the disruption of over 3,000 ongoing scams, preventing potential losses of more than $100 million.

The agencies said the National Asset Recovery Strategy comes as money laundering activities in Singapore become more sophisticated and transnational in nature.

“Specific to Singapore, a sizeable proportion of the money laundering cases here are transnational in nature, involving foreign predicate offences and foreign crime syndicates which employ sophisticated and complex methods, including layering tactics and digital technologies, to conceal the cross-border movement of their illicit funds,“ they added.

The agencies said international cooperation will be needed in the fight against money laundering.

To that end, Singapore works with international police organisation Interpol, international financial intelligence agency Egmont Group and FATF.

“Every partner plays a critical role in the global effort to identify, trace, seize, and return the proceeds of crime to their rightful owners, and hold the criminals accountable.

“We also need efforts upstream and a whole-of-society approach if we want to achieve better outcomes in loss prevention and minimise the harms to society,” said the agencies.

Singapore has been a member of FATF since 1992, and will reach the end of its two-year presidential term at FATF at the end of June.

FATF will assess Singapore’s anti-money laundering regime again in August 2025 through a mutual evaluation report.

The Republic, which was last evaluated in 2016, will be analysed on its policies and technical and operational anti-money laundering framework, against international standards and risks.