Singapore Prime Minister Lawrence Wong at the FATF plenary. Photo courtesy: X/@LawrenceWongST

One of the top business hubs in the world, with financial services being a key sector, Singapore “faces greater money laundering and terrorism financing risks”, said Prime Minister Lawrence Wong yesterday at the Financial Action Task Force (FATF) plenary, hosted by the island nation. He emphasised, “We have made asset recovery a priority in our national anti-money laundering regime.”

Singapore has had a two-year presidency of FATF, an inter-government organisation that sets international standards and acts as the global money laundering and terrorist financing watchdog. The presidency began on July 1, 2022, and ends on June 30, 2024. The island nation has been represented at FATF by Indian-origin Singaporean T Raja Kumar.

One of the several X posts published by PM Wong yesterday, on the FATF plenary, said: “Over the past 2 years, FATF has been led by a Singaporean, Mr T Raja Kumar. Under his presidency, FATF [has] made progress in improving the interception of illicit funds, improving transparency of legal entities that can be [used] as fronts by criminals, among others. Well done Raja!”

Also read: Singapore’s Money Laundering National Risk Assessment lists digital payments, online gambling among high-risk sectors

This plenary marks the end of Singapore’s FATF presidency and maps the way forward. PM Wong wrote yesterday on X: “Delegates from about 70 countries are in Singapore for the plenary of the Financial Action Taskforce (FATF), which plays an important role in coordinating and mobilising global efforts to counter financial crimes that affect all countries.”

He also posted: “Spoke at the FATF plenary on how the advent of virtual assets and increasing availability of digital payment channels, will present more opportunities for criminals, and what we can do to address them.

“As an international hub, SG faces greater money laundering and terrorism financing risks. But we are determined to combat them.”

In his FATF plenary speech, PM Wong, who is also the Finance Minister of Singapore, said, “While we have made progress, criminals are always looking for opportunities and loopholes to exploit. The fight against financial crime is an ongoing battle, and we must stay vigilant and continually evolve to tackle new threats.”

Online transactions, for all kinds of e-commerce, including money transfers, have “made it easier to buy and sell goods and services”, said PM Wong, but “it has also presented new opportunities for criminals to commit crimes, like scams”.

He said, “The advent of virtual assets and increasing availability of digital payment channels have also made it easier for criminals to move and hide their illicit proceeds. They are able to operate across borders, and exploit the information silos that exist between national law enforcement agencies.”

Combating these borderless crimes required borderless co-operation among law enforcement agencies, said the prime minister. “No country can address these threats by itself. That is why the FATF’s work in leading a co-ordinated global effort has become more important. In this regard, I am glad to note the progress that FATF has made over the recent years in addressing these challenges,” he said.

PM Wong referred to the work done on the interception of illicit funds, and the revised FATF standards to stop the movement of “around USD 2 to USD 3 trillion worth of illicit proceeds” through “the global financial system every year”.

He said, “A very small fraction of these criminal assets is intercepted and recovered; which means that criminals can largely get away with, and profit handsomely from their crimes.

“To address this, FATF has revised its standards to improve international co-operation, for example, by requiring countries to recognise and enforce each other’s court orders on the confiscation of assets.”

He said that FATF and INTERPOL worked together “to bring operational experts and policymakers together to discuss best practices in asset recovery, and enhance collaboration between law enforcement, financial intelligence units and policymakers”.

It is early days in this drive to enhance global asset recovery. The latest figures from INTERPOL showed that recovery rate from illicit funds have improved. From less than 1 per cent a decade ago, to about 3 per cent this year — 3 per cent actually is still low, we need to do better. But, at least, we are moving in the right direction, and we can aim for even higher recovery rates in the years to come.

Singapore Prime Minister and Finance Minister Lawrence Wong

Shell companies, which are often used for money laundering and terrorism financing, have come under greater FATF scrutiny. PM Wong said that “FATF has updated its standards to require the disclosure of additional information that can allow law enforcement agencies to better identify the real owners behind these entities”.

Another recent FATF achievement was identifying “ways to break down information silos” between law enforcement agencies and private financial institutions. In this context, PM Wong mentioned the platform launched in 2024 by the Monetary Authority of Singapore where private financial institutions could “securely share information with each other on customers that exhibit red flags”.

Passengers at Changi Airport
Officers from the Singapore Police Force conducted a multi-agency enforcement operation with other government agencies at the Singapore Changi Airport from 17 to 23 June 2024. This was part of efforts by the authorities to clamp down on non-compliance with Singapore’s Cross-Border Cash Reporting Regime (CBCRR) and other illegal cross-border activities. Photo courtesy: Facebook/Singapore Police Force

He also spoke of the Anti-Scam Centre of the Singapore Police Force, “where officers from law enforcement agencies, the major banks, and online e-commerce platforms all sit together at one venue, one site, to facilitate real-time co-ordination in tracing suspicious fund flows and freezing illicit monies”.

These efforts had led to faster fraud detection and better recovery of victims’ money, said PM Wong.

Currency seized at Singapore Changi Airport
Some of the currency seized at Singapore Changi Airport during the week-long multi-agency operations in June 2024. More than 10,000 travellers were identified for checks, with more than 18,000 luggage and hand-carry bags scanned or searched. Photo courtesy: Facebook/Singapore Police Force

As an international financial and business hub, we recognise that we face greater money laundering and terrorism financing risks. But we are determined to do what is needed to respond to these risks and safeguard Singapore’s reputation as a trusted financial centre.

Singapore Prime Minister and Finance Minister Lawrence Wong

“We have made asset recovery a priority in our national anti-money laundering regime,” said the Singapore PM.

After his speech yesterday, Singapore was to publish its first ever National Asset Recovery Strategy. This strategy “will set out how we will deprive criminals of their illicit funds and assets, remove the financial incentives for criminals to launder their illicit proceeds in Singapore, and return these assets to victims,” said PM Wong.

He pointed out that zero tolerance for financial crimes “does not mean zero occurrence” and criminals “will continuously search for gaps to exploit”.

As a prime destination for business, Singapore would also have to ensure “that our measures are not over-zealous and do not unnecessarily stifle legitimate activities and investments”.

With a well-balanced and risk-based approach, Singapore had been able to “take quick and strong enforcement action against criminals who try to use Singapore to launder their illicit funds”, said the prime minister.

He concluded the plenary address by congratulating the next country — Mexico — that takes over the FATF presidency from Singapore, and promised to stand together with the global community against “ever-evolving threats”.