Posted 27 Sep 2016 15:30
File photo of Marina Bay Financial Centre in Singapore. (AFP/Roslan Rahman)
SINGAPORE: There is a strong regulatory and supervisory framework in place in Singapore against money laundering and terrorism financing, but authorities should also aggressively target more complex, transnational cases, said the Financial Action Task Force (FATF).
According to FATF’s report released on Tuesday (Sep 27) that examines Singapore’s progress since the last evaluation in 2008, the city-state is able to reasonably assess and mitigate risks of money laundering and terrorism financing, and that is has done well when it comes to international cooperation on such crimes.
The FATF also noted the financial sector is also robustly supervised by the Monetary Authority of Singapore (MAS), and that most financial institutions clearly understand their obligations when it comes to these crimes.
However, while it commended Singapore on significantly increasing the number of investigations, prosecutions, and convictions into money laundering, FATF said that given its status as a sophisticated financial centre, it should also aggressively target more complex, transnational cases.
To this end, the Financial Intelligence Unit – which comes under the Singapore Police Force’s Commercial Affairs Department – will develop more sophisticated data analytics capabilities to aid in this effort.
Other areas with room to improve include: Strengthening supervision of the non-financial sector, and boosting financial institutions’ understanding about emerging risks and how to mitigate them. The FATF also urged Singapore’s law enforcement agencies to proactively confiscate criminal proceeds.
“NOT ACCORDED SUFFICIENT CREDIT”: COMMITTEE
According to the National Steering Committee for Combating Money Laundering and Terrorism Financing, there is already a robust regime in place to combat these risks.
“Singapore’s regime to combat terrorism financing was not accorded sufficient credit by FATF assessors, who cited the lack of criminal prosecutions and convictions for terrorism financing offences,” it said in a separate press release.
It added that Singapore has dealt with 17 such cases in the past, but using the Internal Security Act (ISA) rather than prosecution.
Earlier this year, for example, six Bangladeshi nationals were prosecuted for financing terror under the Terrorism (Suppression of Financing) Act. However, these were not taken into account by the FATF in its latest report as they took place after the assessment, it said.
The FATF and Asia/Pacific Group on Money Laundering (APG) conducted an assessment of Singapore’s anti-money laundering and counter-terrorist financing (AML/CFT) system, based on the 2012 FATF Recommendations, and using the 2013 Methodology. The assessment is a comprehensive review of the effectiveness of Singapore’s AML/CFT system and its level of compliance with the FATF Recommendations.
Singapore has a strong legal and institutional framework to fight money laundering (ML) and terrorist financing (TF). Singapore’s AML/CFT coordination is highly sophisticated and inclusive of all relevant competent authorities. Authorities have a reasonable understanding of their ML/TF risks, and are taking steps to mitigate them. The report however notes that the level of understanding of the ML/TF risks varies among financial institutions and DNFBPs, with the latter generally demonstrating a less mature understanding of ML/TF risks. Singapore is also encouraged to conduct comprehensive ML/TF risk assessments for all types of legal persons (private companies, public companies, foreign companies, etc.) and legal arrangements.
The report recognises that authorities are able to successfully investigate and prosecute domestic ML and TF cases, and encourages Singapore to further strengthen its investigative and prosecutorial actions on foreign predicate ML cases, in line with the country’s geographical location and its status as a global financial centre. The report also notes that Singapore should strengthen its criminal justice measures against TF in line with its risks and should continue to emphasise the pursuit of confiscation of proceeds of crime as a separate strategic goal.
Despite relatively strong AML/CFT supervision of most FIs, the report recommends that authorities continue their efforts to ensure the effective supervision across all categories of FIs and especially DNFPBs. The requirements for customer due-diligence, record-keeping and PEP clients are well understood by FIs. Singapore is also working to increase the level of implementation of the AML/CFT measures recently introduced for most types of DNFPBs.
Tags: combat terrorism financing, confiscate criminal proceeds, FATF, Financial Action Task Force, financial institutions, Financial Intelligence Unit, Internal Security Act, ISA, MAS, Monetary Authority of Singapore, money laundering, National Steering Committee for Combating Money Laundering and Terrorism Financing, Singapore, terrorism financing, transnational c