The Singapore government has admitted in its latest report that the banking industry in the country is facing a very high risk of money laundering while it strives to develop as an international financial center. According to Bloomberg’s report, the Singapore government stated in a 126-page report released on Thursday that the banking industry in Singapore has posed the “highest” risk of money laundering to the country. Authorities have acknowledged the challenges faced in attracting ultra-high net worth individuals and enhancing Singapore’s position as an international financial center. Singapore is more susceptible to being used as a conduit for money laundering, with funds originating from financial fraud and other illicit activities overseas. Singapore authorities have observed that criminals employ various money laundering techniques in the country, involving bank accounts, payment accounts, shell companies, and other more complex structures. Banks are particularly susceptible to financial crimes and have become the biggest money laundering risk. Singapore’s banking system consists of over 150 banks, many of which offer online financial services to customers, making electronic fund transfers without the need for counter services easier. The lengthy report was issued following a scandal involving over SGD 3 billion (USD 2.2 billion) of illicit assets in Singapore. The report stated that more than SGD 1.5 billion was seized from bank accounts in connection with the money laundering scandal, involving 10 Chinese nationals, some of whom have been convicted, while 17 suspects are still at large. Other seized assets include cash, cryptocurrencies, properties, jewelry, watches, and luxury bags. The report also mentioned other sectors prone to money laundering, including real estate, precious gemstones, and the casino industry. In recent cases, private residential properties accounted for approximately 70% of the more than 200 properties seized, making them a major channel for money laundering. The report cited a case in which a Singapore petrol station employee allegedly used SGD 1.9 million in criminal proceeds to purchase casino chips, lost some of the chips, cashed out the remaining ones, and used the funds to pay for a car, a housing loan, and insurance. The individual was ultimately prosecuted for money laundering in 2019. Bloomberg further noted that in response to the money laundering risk, Singapore has required family offices and hedge funds to provide more information and has strengthened scrutiny of shell companies.
Singapores Financial Hub Turns into Money Laundering Paradise Domestic Banking Industry Identified as Major Money Laundering Hotspot