FATF Status

Singapore is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Singapore was undertaken in 2019. According to that Evaluation, Singapore was deemed Compliant for 20 and Largely Compliant for 17 of the FATF 40 Recommendations.

APG Yearly Typologies Report  -  2017

Emerging and ongoing trend – Money mules and international wire transfer fraud 

In early 2012, the Commercial Affairs Department (CAD) detected a crime trend where illicit funds were being transferred to bank accounts in Singapore. In many of the cases, the criminals hacked into the email accounts of their victims to send instructions to the victims’ banks for the transfer of funds to bank accounts in Singapore. On discovery of the fraudulent transfers, victims informed their banks which then attempted to recall the funds from the banks in Singapore. In other cases, victims fell for the scams perpetrated by the criminals and made the transfer of funds at the criminals’ instruction. Some of these cases were detected when STRs were filed by Singapore financial institutions when they were asked to return funds deposited into their customers’ bank accounts. In other cases, the victims of fraud lodged police reports online. 

These cases, known as “international wire transfer fraud” rose from 93 reported cases in 2012 to 212 cases in 2013. The CAD investigations revealed that criminal syndicates operating overseas were behind the movement of stolen funds derived from criminal activities committed overseas. The bank accounts in Singapore are held by locals who befriended members of the criminal syndicates, mainly through social networking websites on the internet. These local bank account holders also known as ‘money mules’, wittingly or unwittingly, at the request of the criminal syndicate, agreed to receive funds into their account and thereafter transfer the funds elsewhere, usually to bank accounts overseas. The money mules usually receive a commission for their role in the transfer of the funds.

In order to tackle the money mule problem, the CAD employed a multi-pronged approach. Firstly, the CAD promptly shared information with relevant agencies – for example, the Suspicious Transaction Reporting Office (STRO) worked closely with STR-filers and shared information by making spontaneous referrals to its foreign counterparts. In addition, STRO’s findings on its assessment of this crime problem were shared with the affected banks as well as the Association of Banks in Singapore (ABS) so that the information could be further disseminated to other members. 

Secondly, the CAD worked closely with law enforcement authorities of various jurisdictions to identify the victims whose monies may have been fraudulently transferred into Singapore. This enabled the CAD to conduct further investigations into money laundering and at the same time, take the necessary action to recover the victim’s monies.  The following table details the number of foreign victim bank accounts identified through the close collaboration between the CAD and its foreign counterparts, the amounts transferred from the victim’s account and the amounts of criminal proceeds successfully seized by the CAD. 

In addition, the CAD worked with the Attorney-General’s Chambers (AGC) to ensure that strong enforcement action is taken against money mules. 

Thirdly, the CAD intensified its efforts in the area of crime prevention and public education. In November 2014, the CAD launched a campaign to increase public awareness of the new crime typologies. As part of the crime awareness campaign, police utilised several forms of out-of-home publicity such as billboards, advertisements on public transport, office buildings and hawker centres so as to bring the crime awareness message to the masses. Besides conventional media platforms, the police also leveraged on digital platforms such as YouTube, Facebook, Twitter. In addition to public education, the police worked closely with local media to publicize successful “money mule” prosecutions in order to deter potential criminals. 

The above has been successful, resulting in a substantial fall in the number of reports of international wire transfer fraud proceeds being laundered through Singapore ‘money mules’. The number of reports received fell by 83.5%, from 212 cases at the peak in 2013 to 35 cases in 2016.

US Department of State Money Laundering assessment (INCSR)

Singapore was deemed a Jurisdiction of Primary Concern by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -

Singapore’s openness as an international financial, investment, and transport hub exposes it to money laundering and terrorist financing risks. The country’s position as the most stable and prominent financial center in South East Asia, coupled with a regional history of transnational organized crime, large-scale corruption in neighboring states, and a range of other predicate offenses in those states increase the risk that Singapore will be viewed as an attractive destination for criminals to launder their criminal proceeds. Limited large currency reporting requirements and the size and growth of Singapore’s private banking and asset management sectors also pose inherent risks. Among the types of illicit activity noted in the region are fund flows associated with illegal activity in Australia that transit Singapore financial service providers for other parts of Asia.

As of November 17, 2015, there were 37 offshore banks in operation, all foreign-owned. Singapore is a major center for offshore private banking and asset management. Assets under management in Singapore total approximately SGD 2.4 trillion (approximately $1.89 trillion) in 2014. As of the end of 2014, Singapore had at least SGD 1.94 trillion (approximately $1.53 trillion) in foreign funds under management. Singapore does not permit shell banks or anonymous accounts.

There are two casinos in Singapore with estimated combined annual revenue of $4.83 billion in 2014. Online gaming is illegal. Casinos are regulated by the Casino Regulatory Authority. Given the scale of the financial flows associated with the casinos, there are concerns that casinos could be targeted for money laundering purposes.

Singapore exempted the processing of gold and other precious metals from its Goods and Services Tax to attract a larger share of the trade in precious metals. Regionally, gold is often used as a commodity of choice in trade-based money laundering (TBML) schemes and is also used frequently in the settling of accounts in underground financial systems. Singapore is located on a key global trade route and is a major transshipment port. Singapore hosts ten free trade zones which may be used for storage, repackaging of import and export cargo, assembly, and other manufacturing activities approved by the Director General of Customs, in conjunction with the Ministry of Finance. Singaporean authorities recognize the vulnerability of these areas to trade fraud and TBML.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                         83

World Governance Indicator – Control of Corruption             99

Singapore ranks among the least corrupt countries in the world. Companies face very low risks of corruption in the city state, which has numerous safeguards and rigorous audit controls. Key anti-corruption legislation includes the Penal Code and the Prevention of Corruption Act (PCA), which prohibit active and passive bribery, gifts and facilitation payments in the public and private sector. Maximum punishment includes fines of up to SGD 100,000 (approx. USD 80,000), prison sentences of up to seven years and in some instances both. Facilitation payments, bribery and gifts are uncommon in business transactions. Singapore has ratified the United Nations Convention against Corruption. For further information - GAN Integrity Business Anti-Corruption Portal

Singapore maintains an open, heavily trade-dependent economy that plays a critical role in the global supply chain. The government utilized unprecedented levels of public spending to support the economy during the COVID-19 pandemic. Singapore supports predominantly open investment policies and a robust free market economy while actively managing and sustaining Singapore’s economic development. U.S. companies regularly cite transparency, business-friendly laws, tax structure, customs facilitation, intellectual property protection, and well-developed infrastructure as attractive investment climate features. Singapore actively enforces its robust anti-corruption laws and typically ranks as the least corrupt country in Asia. In addition, Transparency International’s 2022 Corruption Perception Index placed Singapore as the fifth-least corrupt nation globally. The U.S.-Singapore Free Trade Agreement (USSFTA), which entered into force in 2004, expanded U.S. market access in goods, services, investment, and government procurement, enhanced intellectual property protection, and provided for cooperation in promoting labor rights and environmental protections.

Singapore has a diversified economy that attracts substantial foreign investment in manufacturing (petrochemical, electronics, pharmaceuticals, machinery, and equipment) and services (financial, trade, and business). The government actively promotes the country as a research and development (R&D) and innovation center for businesses by offering tax incentives, research grants, and partnership opportunities with domestic research agencies. U.S. foreign direct investment (FDI) in Singapore in 2021 totaled $294 billion, primarily in non-bank holding companies, manufacturing, wholesale trade, and finance and insurance. Singapore received more than double the U.S. FDI invested in any other Southeast Asian nation. The investment outlook is positive due to Singapore’s proximity to Southeast Asia’s developing economies. Singapore remains a regional hub for thousands of multinational companies and continues to maintain its reputation as a world leader in dispute resolution, financing, and project facilitation for regional infrastructure development.

Singapore is poised to attract future foreign investments in digital innovation, pharmaceutical manufacturing, sustainable development, and cybersecurity. Singapore is investing heavily in automation, artificial intelligence, integrated systems, as well as sustainability, and seeks to establish itself as a regional hub for these technologies. Singapore is also a well-established hub for medical research and device manufacturing.

Singapore relies heavily on foreign workers who make up 36 percent of the workforce. The government tightened foreign labor policies in 2020 to encourage firms to improve productivity and employ more Singaporean workers, and lowered most companies’ quotas for mid- and low-skilled foreign workers.

Singapore plans to reach net-zero by 2050 but also faces alternative energy diversification challenges. Singapore launched its national climate strategy – the Green Plan – in February 2021, and it focuses on increased sustainability, carbon emissions reductions, fostering job and investment opportunities, and increasing climate resilience and food security. It also launched a national hydrogen strategy in October 2022 with a focus on using low-carbon hydrogen as a decarbonization solution.

Singapore has limited economic ties with Russia and Ukraine and is not a major trading partner of either country. However, the disruptions to global energy and food supplies stemming from Russia’s war in Ukraine have resulted in inflationary pressures felt by many of the world’s economies, Singapore included. While Singapore’s investment climate has not been significantly affected by the war, second and third order economic impacts on its major trading partners may reduce demand for Singapore’s exports.

Country Links

Suspicious Transaction Reporting Office (STRO)​

Monetary Authority of Singapore