Singapore Identifies Banking Sector as Top Money Laundering Risk

What you have to know about money laundering reports
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The Monetary Authority of Singapore (MAS) has pinpointed the banking sector as the primary conduit for money laundering (ML) risks in the country. This revelation comes from the Money Laundering National Risk Assessment report released on Thursday, June 20. Most recently, Singapore had a $3 billion money laundering scandal involving China, where 10 people were sentenced to prison and fines. Money laundering is a huge issue for the island country and city-state.

Banks as Key Risk Channels

The MAS report highlights that banks, due to their pivotal role in financial transactions and extensive networks facilitating cross-border transactions, are frequently exploited by criminals for money laundering activities. The report states, “The role of banks in facilitating transactions in the financial system, and their wide networks through which cross-border transactions can be conducted, make banks a common channel which criminals exploit.

Additionally, the banking sector’s exposure to a significant proportion of high-risk customers, including those from jurisdictions with higher ML risks, combined with the high volume of cross-border transactions and complex product offerings, further exacerbates the threat.

Other High-Risk Sectors

Beyond banking, the report identifies several other sectors with elevated money laundering risks. These include:

  • Corporate service providers
  • Real estate
  • Casinos
  • Licensed trust companies
  • Dealers in precious stones and metals
  • Digital payment token service providers
  • Payment institutions
  • External asset managers

Predominant Money Laundering Threats

The report outlines key money laundering threats facing Singapore, emphasizing the prevalence of fraud (particularly cyber-enabled fraud), organized crime, corruption, tax crimes, and trade-based money laundering. It also notes the significant threats posed by environmental crime, cybercrime, and drug-related offenses.

“As an international business, financial, and trading center, Singapore is exposed to external threats arising from predicate offenses that have a foreign nexus,” the MAS report elaborates.

Combating Money Laundering

To counteract these threats, Singapore collaborates closely with both international and domestic stakeholders to ensure that its anti-money laundering (AML) measures are robust and adaptive to evolving threats. The MAS underscores the importance of continuously enhancing the regulatory framework and fostering public-private sector partnerships.

CategoriesMAS Singapore

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