January 10, 2014 - Singapore issued today its inaugural national risk assessment (NRA) report on money laundering and terrorist financing risks in the country.
The assessment found that many sectors have in place a robust regime to combat money laundering and terrorist financing. The regime is grounded in tough regulations, rigorous supervision, and effective enforcement. Nonetheless, there are a number of areas where controls need to be strengthened, and efforts are underway to address them.
The report is the culmination of a government-wide exercise over the last two years and covers 14 financial sub-sectors1 and eight non-financial sectors2 in Singapore. The assessment takes into account Singapore's economic and geographical environment; its legal, judicial and institutional framework; as well as crime trends. Emerging risks have also been identified for further study.
Key Findings
Singapore's openness as an international transport hub and financial centre exposes it to inherent cross-border money laundering and terrorist financing risks. The more vulnerable sectors include those that are internationally-oriented and cash-intensive. These sectors are where preventive measures against money laundering and terrorist financing are most needed. For many of them, such as banks and casinos, the relevant controls are in place. These controls include customer due diligence, record keeping, ongoing transaction monitoring and rigorous supervision. In addition, Singapore has established an extensive international cooperation network for supervision and law enforcement to better combat transnational crime.
However, there are a number of sectors where controls are relatively less robust. These include remittance agents, money-changers, internet-based stored value facility holders, corporate service providers and pawnbrokers. Relevant government agencies will be strengthening the legislative and supervisory framework through the year to address the risks in these sectors more effectively.
As technology evolves and criminals become more sophisticated, several areas have also been identified for further study. These include virtual currencies, precious stones and metals dealers, and the Singapore Freeport. Authorities will seek to better understand how money laundering and terrorist financing can be carried out through these channels, as well as review international best practices, to determine whether any safeguards and mitigating measures are needed.
Enhancing the Anti-Money Laundering and Countering the Financing of Terrorism Regime
Singapore takes a serious view of illegal activities in its financial sector and economy. The assessment will help authorities to maintain an effective risk-based regime to combat money laundering and terrorist financing, as well as to prioritise and allocate public sector resources efficiently.
The assessment will also help private sector stakeholders to better understand the money laundering and terrorist financing risks in their own and related industries, assess the adequacy of their controls, and strengthen them where necessary. The public will also benefit from greater awareness of the money laundering and terrorist financing risks in Singapore and the measures in place to mitigate them.
The Director of the Commercial Affairs Department, Mr Tan Boon Gin, said, "We will mitigate the risks identified in the NRA by working with the private sector and regulatory agencies to build a strong culture of suspicious transaction reporting, particularly in the areas assessed to be of higher risk. We will also devote the necessary resources to detect and pursue all cases of money laundering and terrorism financing, regardless of whether the underlying criminal activity took place domestically or overseas."
The Steering Committee, established in 1999, determines Singapore's broad policy objectives for combating money laundering and terrorist financing. The Committee comprises the Permanent Secretary of the Ministry of Home Affairs, Permanent Secretary of the Ministry of Finance and Managing Director of the Monetary Authority of Singapore. It ensures that the various government agencies have effective mechanisms in place to enable them to cooperate and where appropriate, to coordinate domestically with each other to strengthen Singapore's resilience against criminal abuse.
The 14 financial sub-sectors are: (i) full banks and qualifying full banks, (ii) wholesale banks, offshore banks and merchant banks, (iii) finance companies, (iv) money-changers, (v) remittance agents, (vi) direct life and composite insurers, (vii) other insurers, (viii) insurance brokers, (ix) fund management companies (x) trust companies, (xi) broker-dealers, (xii) corporate finance advisory firms, (xiii) financial advisory firms, and (xiv) stored value facility holders.
The eight non-financial sectors covered are: (i) casinos, (ii) pawnbrokers, (iii) moneylenders, (iv) corporate service providers, (v) real estate sector, (vi) lawyers, (vii) public accountants and other professional accountants, and (viii) non-profit organisations.
