Singapore Faces Heightened Money Laundering Risks, Says PM Lawrence Wong

Singapore faces higher money laundering and terrorism financing risks compared to other countries due to its status as an international finance and business hub, Prime Minister Lawrence Wong informed FATF delegates today. Speaking at the Financial Action Task Force plenary week, Wong, who also serves as Singapore’s finance minister, emphasized, “But we are determined to do what is needed to respond to these risks and safeguard Singapore’s reputation as a trusted financial centre.”

During the conference, Wong released Singapore's national asset recovery strategy report, a key component of its efforts to bolster its anti-money laundering (AML) and terrorism financing framework. The 32-page report, jointly issued by the home affairs ministry, the finance ministry, and the central bank, states, “Asset recovery is one of the key priorities of our AML regime.”

The report highlights Singapore’s commitment to depriving criminals of their illicit gains and providing recourse to victims of crime by recovering property and assets lost to criminal activities. From January 2019 to June 2024, Singapore seized S$6 billion ($4.4 billion) linked to criminal and money laundering activities. Of this amount, S$416 million has been returned to victims, and S$1 billion has been forfeited to the state. The remainder is linked to ongoing investigations or court proceedings.

A recent risk assessment report underscored that the banking sector, including wealth management, poses the highest money laundering risk in Singapore. Last year, the city-state dismantled a $2.24 billion money laundering ring operated by foreigners, with the last of 10 offenders sentenced on June 10. The culprits had held money in Singaporean bank accounts, converting some into real estate, cars, handbags, and jewelry.

Singapore, known for its international financial hub status, tax-friendly regime, and political stability, has long been a haven for ultra-rich foreigners. Since 2021, it has seen a surge in wealth influx, becoming one of the first Asian cities to significantly ease pandemic restrictions. The number of family offices managing the portfolios of the wealthy in Singapore rose to around 1,400 last year, up from 1,100 a year earlier and around 700 at the end of 2021, according to government statistics.

The newly launched report by the Prime Minister notes that money laundering activities in Singapore are increasingly sophisticated, involving the rapid movement of large sums of illicit funds across jurisdictions and affecting numerous victims. It states, “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.”

The report outlines asset recovery as a key pillar of Singapore’s AML regime, aiming to deter the flow of illicit assets while remaining welcoming to legitimate businesses. Between January 2019 and June 2024, Singapore seized S$6 billion linked to criminal and money laundering activities, with S$416 million returned to victims and S$1 billion forfeited to the state. The bulk of the remainder is linked to ongoing investigations or court proceedings.

Successful asset recovery, the report states, requires a multi-faceted approach, focusing on detecting suspicious activities, depriving criminals of their ill-gotten proceeds, maximizing asset recovery for forfeiture and restitution, and deterring criminals from using Singapore to hide or move illicit assets. Singapore implements these strategies through upstream loss prevention efforts and a whole-of-society approach, strengthening partnerships with international counterparts, and community and private sector stakeholders.

For example, the Singapore Police Force’s Anti-Scam Command and local banks sent more than 16,700 SMS alerts from March to April 2024, warning over 12,500 bank customers who were detected to be in the process of being scammed. This initiative disrupted more than 3,000 scams and averted losses of over S$100 million.

Acknowledging the constantly evolving nature of criminal activities, the report reiterates Singapore’s commitment to continually enhancing its AML/CFT regime. It concludes, “We are committed to continually enhancing our AML/CFT regime to prevent criminals from exploiting Singapore’s ecosystem. Where we detect any abuse by criminals, we will track them down, and take them to task, including depriving them of their ill-gotten assets.”

The National Asset Recovery Strategy is available for download here.

By fLEXI tEAM