Singapore Strengthens Anti-Money Laundering Measures with Updated Money Laundering National Risk Assessment


Summary

  • MAS published its updated Money Laundering (ML) National Risk Assessment (NRA) as part of Singapore's continued efforts to maintain the effectiveness of the anti-money laundering (AML) regime.
  • The banking and wealth management sectors are most at risk for ML activities. Among DNFBPs (designated non-financial businesses and professionals), corporate service providers pose the highest risk.
  • Financial institutions (FIs) and DNFBPs need to adapt to combat evolving threats, leveraging the updated ML NRA and the right data and technology to stay ahead.

Following the recent high-profile billion-dollar money laundering case in Singapore, the Monetary Authority of Singapore (MAS) has released an updated Money Laundering National Risk Assessment (ML NRA). This report underscores the severity of fraud and scams and the evolving threats Singapore faces. It highlights the growing complexity of financial crime and a rise in interconnected global typologies like environmental crime, modern slavery, and tech-enabled fraud, which are increasingly exploiting the nation's advanced financial system to illicit funds.

The ML NRA identifies several key areas of concern that drive ML in Singapore:

  • Fraud and scams, particularly cyber-enabled fraud, which is becoming increasingly sophisticated
  • Organised crime, including online gambling, environmental crimes, and modern slavery
  • Corruption and tax crimes, originating from outside Singapore, but exploiting the vulnerabilities within the country's financial infrastructure
  • Trade-based money laundering (TBML), where foreign actors use Singapore as a trade and transhipment hub to launder dirty money

The report also identifies sectors that are most vulnerable to ML:

  • Banking and wealth management: These sectors are deemed the highest risk due to the large volume of financial transactions
  • Designated non-financial businesses and professionals (DNFBPs): Among DNFBPs, corporate service providers are considered the most susceptible
  • Other high-risk areas: This includes digital payment token service providers, payment institutions with cross-border transfer capabilities, external asset managers, real estate, casinos, licensed trust companies, and precious metal and stone dealers

Taking action

The key next steps are for financial institutions (FIs) and DNFBPs to sensitise themselves to the interconnected nature of ML risks and threats, while leveraging ML NRA guidance to enhance detection and keep pace with the priority and emerging risks. This allows FIs and DNFBPs to take the appropriate preventive measures, allowing for timely detection, disruption, and enforcement against illicit activities.

It is also pertinent for these organisations to understand the importance of investing in the right data and technology solutions that can automate ML workflows, analyse vast amounts of data, and identify suspicious patterns more effectively. This allows them to support their anti-money laundering (AML) compliance efforts and reinforce policy changes to prevent and detect ML and the exploitation of Singapore's financial system.

For more information on how your organisation can ensure a robust AML environment, speak with our experts.


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