Non-financial sectors in S’pore including real estate at higher risk of money laundering: Report

SINGAPORE - A review of Singapore’s anti-money laundering regime has identified a number of non-financial sectors that are at a higher risk of money laundering, including real estate and casinos.

The Money Laundering National Risk Assessment (MLNRA), which was released on June 20, also identified corporate service providers, licensed trust companies, and the precious stone and metal sector as being at higher risk of exploitation by fraud and organised crime.

Within the financial and banking sectors, the report noted that banking, including wealth management, poses the highest money laundering risks to Singapore but added that there has been an increase in money laundering cases involving digital payment token services providers.

Digital payment tokens include cryptocurrencies.

The report by the Ministry of Home Affairs, Ministry of Finance and the Monetary Authority of Singapore said Singapore’s position as an international financial centre and as a trading and transit hub with a high externally oriented economy exposes it to criminals looking to launder or move illicit funds and assets.

“Singapore also faces risks as a location for criminals to convert their illicit funds to other assets, such as real estate or precious stones and precious metals.

“Shifts in the economic and geopolitical landscape have increased these risks, while the increased use of technology has enabled rapid and large transactions across borders, often involving the use of sophisticated money laundering structures and arrangements,” the authorities said.

They added that key money laundering threats stem from fraud, particularly foreign and domestic cyber-enabled fraud, orchestrated by criminal syndicates typically located overseas.

“Other money laundering threats relate to foreign predicate crimes such as organised crime, corruption, tax crimes and trade-based money laundering,” said the authorities.

The report, which was last published in 2014, comes in the wake of Singapore’s largest money laundering case, which saw 10 foreigners convicted and more than $3 billion in assets and cash seized or issued with prohibition of disposal orders.

The updated risk assessment also comes as Singapore’s two-year presidential term at the Financial Action Task Force (FATF) comes to an end at the end of June 2024.

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, technical and operational anti-money laundering framework against international standards and risks.

The authorities said Singapore remains committed to reviewing and putting in place appropriate measures to address the identified risks.

They added that the findings in the updated assessment, together with other risks assessments conducted by the authorities, serve as a guide for all stakeholders, including financial institutions and businesses and professions in the non-financial sectors.

The findings will also serve to sensitise financial institutions and non-financial businesses and professions to new and emerging money laundering risks, and for more timely detection, disruption and enforcement of illicit activities.

Mr David Chew, director of the Commercial Affairs Department, which led the investigation into the 10 convicted money launderers, said Singapore has always been open to business, “specifically, clean business”.

“This is our assurance as a responsible global citizen.

“We will take a zero-tolerance stance towards money laundering. We will also do our best to prevent criminals from abusing our financial ecosystem, and upon detection, we will track them down, and take them to task,” he added.