In August of 2024, the Singapore Parliament passed into law the Anti-Money Laundering and Other Matters Act 2024. While many financial industry regulation experts have noted that the Act likely arose as a response to a two-billion dollar+ money-laundering operation uncovered by the Singapore Police Force in August 2023, there had been multiple instances of money laundering and other misuses of the Singapore financial system which had regulators and lawmakers preparing to put forth such a law for quite a while.
This post explains why the law was established, how it strengthens Singapore’s anti-money laundering (AML) regulations, and how it has enabled Singaporean authorities to better enforce AML laws and regulations.
Singapore: a unique finance and business hub
Singapore serves as the financial and physical goods trading hub of Southeast Asia, but also with trade and finance influence that extend globally. Among the Southeast Asian nations, Singapore is, by far, the safest, most regulated, and optimal place to do business. With its many large banks and financial institutions (FIs), Singapore offers the deepest liquidity in regional financial markets and can handle vast sums of money.
But it is Singapore’s financial hub status that exposes it to risks from illicit financial flows (IFFs). That is especially true when one considers how criminals can move funds from throughout Southeast Asia and take advantage of Singapore’s global connectivity to launder those funds within the global financial system. At the same time, Singapore is also a hub for trading physical goods, and that adds to its risk exposure when taking in a vast array of products from Indonesia and other ASEAN nations that play host to companies that illegally perform mining, deforestation, animal trading, and other environmental crimes on a large scale.
Here are just a few of the illicit activities which international players undertook via the Singapore financial system prior to 2024:
From Cambodia: Transnational criminal groups (e.g. the Prince Group TCO) had established cyberfraud operations across Southeast Asia, particularly in Cambodia.
From Indonesia: For decades, Indonesian Singapore’s financial markets have been used by corrupt businessmen from Indonesia to move illicit funds overseas. Many of these funds come from illegal logging, mining, and other illegal environmental destruction.
Malaysia: Singapore’s financial sector became entangled in the Malaysia-based 1MDB scandal (2013-2019). Malaysian Prime Minister Najib led a group of high-ranking officials who embezzled nearly US$7 billion from Malaysia’s state-owned development fund. Several Singapore-based financial institutions were fined for inadequate anti-money laundering (AML) procedures related to the scandal.
Germany: In 2020, the Wirecard company suffered a collapse due to its own fraudulent activities, and the company Singapore office was central to the fraud. The Singapore office had claimed huge revenue bookings, which made up a large percentage of its business, from fake customers that were claimed to be based in Asia. Four banks in Singapore were fined for their role in this case due to poor money laundering controls.
The 2024 Act as a response
The Singapore Government deserves credit for acting fast in the face of such scandals. Of course, it had no choice if Singapore wanted to retain its reputation as a top-tier global financial and trading hub.
The Singapore Anti-Money Laundering and Other Matters Act 2024 took effect in late 2024, after a string of legislative developments that took place in Singapore that year—all aimed at strengthening the city-state’s AML framework. These included such major developments as the launch of the Collaborative Sharing of Money Laundering Information & Cases (COSMIC) platform in April 2024, and the National Anti-Money Laundering Strategy, published in October 2024.
The Act has three main goals:
- Enhance the ability of law enforcement agencies to pursue and prosecute money-laundering offenses
- Improve the processes surrounding seized properties linked to suspected criminal activity
- Align Singapore’s existing AML/CFT framework with those of the Financial Aid Task Force (FATF)
Here are the four ways that the Singaporean authorities are pursuing the above-stated goals:
#1: Amending the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992
Under the new Act, prosecutors no longer need to establish a direct link between the criminal conduct and the monies allegedly laundered in Singapore. Instead, prosecutors must only prove beyond reasonable doubt that the money launderer knew (or had reasonable grounds to believe) that they were dealing with criminal proceeds. This amendment facilitates the prosecution of money mules, especially when laundered money has passed through bank accounts and intermediaries in a foreign jurisdiction prior to entering Singapore. This also addresses the difficulty authorities traditionally faced when gathering evidence from foreign victims, entities and jurisdictions.
#2: Amending Criminal Procedure Code 2010 (CPC)
The Act amends the CPC to allow the sale of seized or restrained properties linked to suspects who have absconded (failed to surrender) within six months from the date an investigation against that person began. The goal here is to reduce the cost of maintaining seized assets, preserve their value, and prevent the premature release of seized properties during an investigation.
#3: Amending Casino Control Act 2006 (CCA)
The amendments to the CCA aim to align Singapore’s regulatory framework with the standards set by the FATF. Under them, casino operators must perform customer due diligence (CDD) checks in order to detect and prevent money laundering, terrorism financing, and proliferation financing. The threshold for conducting CDD checks has been lowered to include cash transactions or deposits of S$4,000 or more.
#4: Amending Three Trade And Taxes Legislations
The Act amends the Free Trade Zones Act 1966, Goods and Services Tax Act 1993, Income Tax Act 1947, and the Regulation of Imports and Exports Act 1995 to allow government agencies to share tax data and trade data with Singapore’s Financial Intelligence Unit, the Suspicious Transaction Reporting Office (STRO) of the Commercial Affairs Department of the Singapore Police Force. This enhances STRO’s ability to analyze money laundering, terrorism financing, and proliferation financing risks and provide more comprehensive intelligence to law enforcement agencies and regulators.
What it means for Singapore-based banks and FIs
The Anti-Money Laundering and Other Matters Act 2024 demonstrates the Singapore government’s commitment to enhancing regulatory oversight to prevent the city-state from being turned into a hub for criminals and terror financiers to hide their funds and transform them into legitimate funds. Unsuspecting Singapore-based parties who take part in financial transactions in Singapore should get up to speed on best practices to understand the identities of their commercial partners and the origin of funds which are moving through those partners’ financial institutions and entities. The Act’s rules are incumbent on banks, other FIs, company officers, legal counsels, and more.
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