Singapore rated strong on AML controls in FATF review

FATF places SG on regular follow-up, citing robust AML/CFT framework.

Singapore has a strong framework for combatting money laundering, terrorism financing, and proliferation financing, according to a peer review by the Financial Action Task Force (FATF) published on 6 May.

The FATF said Singapore has “robust and effective” systems supported by strong governance structures, legal frameworks and inter-agency coordination.

It also noted that the country has a well-established law enforcement system, including effective use of financial intelligence, asset recovery capabilities and international cooperation.

The report placed Singapore on “regular follow-up”, which is the category for jurisdictions that perform well in FATF assessments. This marks an improvement from its 2016 evaluation, even as FATF standards have become more stringent.

The FATF said Singapore has a sound understanding of money laundering and terrorism financing risks across government agencies and regulated entities, including banks.

It added that supervision of regulated entities is risk-focused and supported by cooperation between public and private sectors.

The report also noted that financial institutions and virtual asset service providers generally demonstrate strong awareness of proliferation financing risks, although awareness in some non-traditional sectors such as foreign flag state representation offices could be improved.

On transparency and enforcement, the FATF said Singapore has made progress in beneficial ownership reporting and law enforcement access to information, whilst noting that further improvements could be made in accuracy checks for corporate registries and risk mitigation for complex legal arrangements.

The FATF said Singapore’s open economy, trade flows and role as an international financial centre make it attractive to legitimate businesses as well as illicit actors.

Fraud, particularly cyber-enabled scams, was identified as the country’s main money laundering threat.

It added that Singapore authorities have opened more than 11,000 money laundering investigations over the past five years, with most originating from fraud complaints.

The report also noted close to $6.3b in assets were seized over the same period, alongside $3.9b in confiscations.

Singapore said it will study the recommendations and apply them in a risk-proportionate manner. It also said it plans to expand COSMIC, a banking information-sharing platform for AML and counter-terrorism financing cases.

The FATF review comes amidst continued scrutiny of financial crime controls in Singapore following the 2023 money laundering case involving around $3b in assets.

The Monetary Authority of Singapore later penalised nine financial institutions in connection with the case with the latest sanction an issuance of prohibition orders to two former relationship managers in connection to the case.

The FATF said Singapore will be required to report progress on its recommendations over the next three years.