The recent weeks have seen a slew of financial institutions being held accountable for money laundering (ML) by the Monetary Authority of Singapore. This follows the publication of the Financial Action Task Force’s assessment of Singapore’s Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) efforts earlier this year in September 2016. However, whether in response to FATF’s criticism or in line with continuing efforts to combat ML and and CFT, anyone following the recent news would have noticed a number of institutions being penalized for AML lapses including Raffles Money Change, BSI, Falcon Bank, Standard Chartered, DBS and UBS. While disciplinary action is still pending for Standard Chartered and Raffles Money Change, BSI and Falcon Bank have been ordered to shut down, with senior executives being prosecuted, in relation to the ongoing probe of Malaysian State Investment Fund, 1MDB. DBS and UBS have been slapped with fines totalling S$2.3million for 23 breaches of MAS Notice 1014 – Prevention of Money Laundering and Countering the Financing of Terrorism.
FATF’s AML / CFT 2016 Assessment Report of Singapore
Singapore was praised for its understanding of ML/ terrorist financing (TF) risks, coordination of domestic measures for combating these risks as well as international cooperation in the FATF report. However, while recognising that Singapore has a robust regulatory framework in place for combating money laundering and terrorist financing, the FATF also highlighted several areas where Singapore could do better. One such area was in effective prosecution of terrorist financing cases. The report noted only partial compliance in supervising Designated Non-Financial Businesses and Professions and customer due diligence, transparency and beneficial ownership of legal persons and arrangements, and sanctions. More details can be found in the presentation that is appended below and the full report can be found here.
Singapore’s Response to the FATF 2016 Assessment Report
Following the publication of the report, a joint statement by the Ministry of Home Affairs, Ministry of Finance and the Monetary Authority of Singapore pledged to strengthen capabilities when it came to AML/CFT measures. The statement also noted that the evaluation was carried out in 2015, but Singapore has since taken firm action against and prosecuted several instances of both money laundering and terrorist financing, hence the report did not fully capture those efforts. In the last three years, MAS has penalized 27 financial institutions, while 6 individuals have been convicted under the Terrorism Act. In August 2016, Singapore also established a dedicated anti-money laundering department.
Since the 2008 assessment report of Singapore, internal ML and TF risks have greatly increased, given Singapore’s geographic location and status as a major trade hub. As such, the FATF has heightened its standards when assessing Singapore accordingly. Taking into consideration the recent events, and Singapore’s commitment to implement even more measures to bring the country in line with the FATF recommendations, it is not hard to predict that both individuals and organisations that run afoul of AML / CFT measures in Singapore will find the full force of the law coming down hard on them. It would not be out of place then, to see more and more news reports of financial institutions and individuals being held accountable and penalized by regulatory authorities in Singapore in the near future.
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