20-6-2024 (SINGAPORE) Singapore’s financial authorities have cast a watchful eye on several non-banking sectors that pose heightened risks for money laundering activities, according to the updated Money Laundering National Risk Assessment unveiled on Thursday (Jun 20). While the banking sector, including wealth management, remains the highest-risk domain, the assessment highlights the vulnerabilities within specific industries beyond traditional financial institutions.
Among the designated non-financial businesses and professions (DNFBPs) identified as high-risk are corporate service providers, licensed trust companies, real estate, casinos, and the precious stones and metals trade. The Ministry of Home Affairs, Ministry of Finance, and Monetary Authority of Singapore (MAS) jointly issued the report, underscoring the nation’s commitment to combating illicit financial flows.
Corporate service providers, responsible for tasks such as company incorporation, have been flagged due to their potential misuse in facilitating the creation of legal entities for nefarious purposes. “These providers are linked to the misuse of legal persons in some instances,” the authorities stated, highlighting the need for increased vigilance.
Licensed trust companies, which handle complex legal structures and high-value, cross-border transactions, also pose elevated risks. Their clientele may include individuals with potential ties to corruption or tax evasion, further exacerbating the concerns.
The updated assessment emphasizes that Singapore’s primary money laundering threats stem from fraud, particularly cyber-enabled fraud orchestrated by international criminal syndicates. The rise of technology has facilitated rapid and large-scale transactions across borders, often employing sophisticated money laundering structures and arrangements.
Other key threats detailed in the report include foreign predicate crimes such as organized crime, corruption, tax offenses, and trade-based money laundering. Common methods of laundering illicit funds include channeling them through bank accounts, misusing shell companies, and investing in high-value assets like real estate, precious stones, and metals.
Within the financial sector, banks remain the most susceptible due to their role in facilitating vast transaction volumes and servicing customers from higher-risk jurisdictions. Digital payment token (DPT) service providers, payment institutions offering cross-border money transfer services, and external asset managers were also flagged as higher-risk sub-sectors.
The updated national risk assessment will guide ongoing efforts to fortify Singapore’s anti-money laundering regime, ensuring it remains responsive to evolving risks. Authorities have pledged to intensify risk-targeted outreach to financial institutions and DNFBPs, enabling timelier detection, disruption, and enforcement of illicit activities.
In a high-profile case last August, Singapore’s crackdown on money laundering led to the imprisonment of 10 foreign nationals and the seizure of over S$3 billion in assets. The updated risk assessment underscores the nation’s unwavering commitment to safeguarding its financial integrity and upholding the highest standards of transparency and accountability.
