Countries/Jurisdictions of Primary Concern - Singapore
Singapore is a major international financial and investment hub. Limited large currency reporting requirements and the size and growth of Singapore’s private banking and asset management sectors pose inherent risks and make the jurisdiction a potentially attractive money laundering destination for transnational criminals and foreign corrupt officials.
As of November 8, 2014, 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 $1.42 trillion. As of the end of 2013, Singapore had at least $1.09 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 $4.11 billion in 2013. 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.
In 2012, Singapore exempted the processing of gold and other precious metals from its Goods and Services Tax, which may 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 (FTZs) 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: http://www.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: 22,417 in 2013
Number of CTRs received and time frame: 370,933 in 2013
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: 79 in 2013
Convictions: 82 in 2013
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:
Singapore has a comprehensive suspicious transaction reporting (STR) regime and applies AML/CFT requirements to a broad range of entities. Currency transaction reporting (CTRs) above a certain threshold only pertains to casinos and, as of October 2014, to gem and precious metals dealers. There currently is no comprehensive requirement mandating CTRs for 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.
Individuals who move cash into or receive cash from outside of Singapore in excess of SGD 20,000 (approximately $15,100), or its foreign currency equivalent, are subject to a reporting requirement. This threshold was lowered from SGD 30,000 (approximately $22,700) in September 2014.
Singapore’s legal system provides for the investigation and prosecution of money laundering offenses. Singapore has taken steps over the last year to improve its investigation and prosecution of money laundering cases, including foreign-sourced cases. Singaporean police are successful at identifying domestic predicate offenses, and include ancillary money laundering charges as appropriate. The significant increase in the number of money laundering convictions in 2013 is attributed to the conviction of persons prosecuted in previous years, and possibly, to the enforcement of new predicate crimes added to the law in 2010 amendments.
Singapore has several double taxation treaties, all of which incorporate the automatic exchange of information. Since 2013, willful tax evasion and tax fraud have been designated predicate offenses for money laundering.
In 2014, Singapore announced it was stopping the issuance of new SGD 10,000 notes (approximately $7,500) as part of a broader move to strengthen its AML/CFT regime. Large denomination notes are popular with money launderers.
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. Singapore also should consider the adoption of CTR reporting for all types of financial institutions and DNFBPs.