Report Singapores Banking Sector Becomes a Money Laundering Hotspot Transforming into a Financial Center of Illicit Transactions
The Singapore government admitted in its latest report that while the country is striving to develop as an international financial center, the banking industry is also facing very high money laundering risks.
Singapore’s largest money laundering suspect in recent years denies the charges, and foreign media: banks’ ability to resist illegal funds is questionable.
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Singapore’s banking industry faces highest money laundering risk
Banks are exploited by financial crimes
Real estate, jewelry, and casinos also serve as money laundering channels
According to Bloomberg’s report, the Singapore government stated in a 126-page report released on Thursday that the banking industry in Singapore has constituted the “highest” money laundering risk to the country.
Authorities acknowledged that they have faced significant challenges in attracting ultra-high net worth individuals and enhancing Singapore’s status as an international financial center. Singapore is also more susceptible to being used as a conduit for money laundering, with the funds originating from financial fraud and other illegal activities overseas.
Banks are exploited by financial crimes
Singapore authorities have observed that criminals employ various money laundering techniques in the country, involving bank accounts, payment accounts, shell companies, and other complex structures. Particularly, banks are easily used for financial crimes and have become the largest money laundering risk.
Singapore’s banking system comprises over 150 banks, many of which provide online banking services to customers, making electronic fund transfers without the need for physical presence much easier.
The lengthy report by the authorities followed a scandal in Singapore involving over SGD 3 billion (USD 2.2 billion) in illegal assets.
The report stated that the money laundering scandal involved the freezing of over SGD 1.5 billion from bank accounts, with funds linked to 10 Chinese individuals, some of whom have been convicted. However, 17 suspects are still at large. Other seized assets include cash, cryptocurrencies, properties, jewelry, watches, and luxury handbags.
Real estate, jewelry, and casinos also serve as money laundering channels
The report also mentioned other areas prone to money laundering, including real estate, precious gems, and the casino sector. In recent cases, private residential properties accounted for about 70% of the over 200 properties seized, making them one of the main channels for money laundering.
The report cited a specific case where a Singapore petrol station employee allegedly used criminal proceeds amounting to SGD 1.9 million to purchase casino chips, lost a portion, cashed out the remaining chips, and used the funds to pay for a car, mortgage, and insurance. The employee was eventually charged with money laundering in 2019.
Bloomberg also noted that Singapore has required family offices and hedge funds to provide more information and strengthened scrutiny of shell companies to address money laundering risks.
Singapore
Money laundering
Banks
