Countries/Jurisdictions of Primary Concern - Singapore
Singapore’s openness as an international financial, investment, and transport hub exposes it to money laundering and terrorist financing risks. The country’s position as the most stable and prominent financial center in South East Asia, coupled with a regional history of transnational organized crime, large-scale corruption in neighboring states, and a range of other predicate offenses in those states increase the risk that Singapore will be viewed as an attractive destination for criminals to launder their criminal proceeds. Limited large currency reporting requirements and the size and growth of Singapore’s private banking and asset management sectors also pose inherent risks. Among the types of illicit activity noted in the region are fund flows associated with illegal activity in Australia that transit Singapore financial service providers for other parts of Asia.
As of November 17, 2015, there were 37 offshore banks in operation, all foreign-owned. Singapore is a major center for offshore private banking and asset management. Assets under management in Singapore total approximately SGD 2.4 trillion (approximately $1.89 trillion) in 2014. As of the end of 2014, Singapore had at least SGD 1.94 trillion (approximately $1.53 trillion) in foreign funds under management. Singapore does not permit shell banks or anonymous accounts.
There are two casinos in Singapore with estimated combined annual revenue of $4.83 billion in 2014. Online gaming is illegal. Casinos are regulated by the Casino Regulatory Authority. Given the scale of the financial flows associated with the casinos, there are concerns that casinos could be targeted for money laundering purposes.
Singapore exempted the processing of gold and other precious metals from its Goods and Services Tax to attract a larger share of the trade in precious metals. Regionally, gold is often used as a commodity of choice in trade-based money laundering (TBML) schemes and is also used frequently in the settling of accounts in underground financial systems. Singapore is located on a key global trade route and is a major transshipment port. Singapore hosts ten free trade zones which may be used for storage, repackaging of import and export cargo, assembly, and other manufacturing activities approved by the Director General of Customs, in conjunction with the Ministry of Finance. Singaporean authorities recognize the vulnerability of these areas to trade fraud and TBML.
For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: //2009-2017.state.gov/j/ct/rls/crt/
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR ILLEGAL DRUG SALES THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate crimes: List approach
Are legal persons covered: criminally: YES civilly: YES
KNOW-YOUR-CUSTOMER (KYC) RULES:
Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES
KYC covered entities: Banks, finance companies, merchant banks, life insurers, brokers, securities dealers, investment advisors, futures brokers and advisors, trust companies, approved trustees, and money changers and remitters
Number of STRs received and time frame: 29,082 in 2014
Number of CTRs received and time frame: 385,496 in 2014
STR covered entities: Banks, auditors, financial advisors, capital market service licensees,
finance companies, lawyers, notaries, merchant banks, life insurers, trust companies, approved trustees, real estate agents, and money changers and remitters
MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:
Prosecutions: 111 in 2014
Convictions: 89 in 2014
RECORDS EXCHANGE MECHANISM:
With U.S.: MLAT: NO Other mechanism: YES
With other governments/jurisdictions: YES
Singapore is a member of the FATF and the Asia/Pacific Group on Money Laundering (APG), a FATF-style regional body. Its most recent mutual evaluation can be found at: http://www.fatf-gafi.org/documents/documents/mutualevaluationofsingapore.html
ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:
Currency transaction reporting (CTRs) only pertains to casinos and to gem and precious metals dealers. There currently is no comprehensive requirement for mandatory reporting of all currency transactions above a certain threshold amount for all types of financial institutions or designated non-financial businesses and professions (DNFBPs), which limits the ability to track significant financial movements.
In 2015, the Monetary Authority of Singapore announced that, between April 2013 and March 2014, it conducted 83 AML/CFT inspections, issued nine supervisory warnings and reprimands, restricted the operations of six financial institutions, and revoked the licenses of two remittance agents. It also fined five financial institutions for breaches of AML/CFT requirements.
The extradition treaty between the United States and Singapore is an old style “list” treaty that enumerates the specific offenses for which the parties have agreed to extradite. The major deficiency with the treaty is that the list of offenses is woefully out of date and does not cover money laundering. Singapore has denied multiple extraditions to the United States for prosecution on money laundering offenses due to the lack of treaty coverage and Singapore has shown no interest in engaging in discussions to modernize the extradition treaty.
All mutual legal assistance granted by Singapore is based upon Singapore’s domestic legal assistance statute, entitled the Mutual Assistance in Criminal Matters Act (MACMA). Singapore strictly applies the provisions of this domestic law, regardless of whether a foreign request for assistance is made pursuant to a bilateral treaty or a multilateral convention. Mutual legal assistance treaties (and extradition treaties) are not self-executing in Singapore, and therefore have no effect under Singapore law, other than to the extent the treaties are implemented by specific domestic laws. Singapore authorities interpret the MACMA very strictly, complicating the provision of assistance. Despite the stringent requirements and procedures, Singapore does provide mutual legal assistance, including in money laundering cases.
Singapore’s large, stable, and sophisticated financial center may be attractive as a conduit for laundering proceeds generated by foreign criminal activities, including official corruption. The Suspicious Transaction Reporting Office and criminal investigators are encouraged to identify money laundering that originates from foreign predicate offenses and use stand-alone money laundering charges to prosecute foreign offenders in Singapore. Given that some of Singapore’s more vulnerable sectors include those that are cash-intensive, Singapore also should consider the adoption of CTR reporting for all types of financial institutions and DNFBPs.