Sunday, 7 June 2015

Multi-pronged effort to fight money laundering

MR RAYMOND Koh Bock Swi raised some important issues related to Singapore's anti-money laundering regime in his letter ("Are we well equipped to fight money laundering?";May 28).

In a subsequent letter ("Money laundering: Banks not a big worry, but watch other sectors"; yesterday), Mr Tan Sin Liang highlighted the tough controls that banks in Singapore are required to put in place to prevent money laundering.

We agree with Mr Koh that Singapore must be vigilant against money laundering because our openness as an international financial centre and transport hub exposes us to this risk.

And we assure Mr Koh and other readers that insinuations that Singapore is a major centre for money laundering are not true.

The Monetary Authority of Singapore (MAS) does indeed have a strong legal and regulatory framework to guard against money-laundering risks in the financial sector.

Financial institutions, including finance companies, life insurers, fund managers, financial advisers, money changers and remittance agents, are required to perform due diligence on their customers and closely monitor transactions that are suspicious.

Financial institutions are rigorously supervised by MAS for compliance with these requirements.

Failure to comply can attract fines of up to $1 million per offence.

Singapore's anti-money laundering and countering the financing of terrorism (AML/CFT) regime extends beyond the financial sector to other sectors, to include real estate agents, lawyers and accountants.

Our AML/CFT efforts are coordinated by a multi-agency committee, led by the Ministry of Home Affairs, the Ministry of Finance and MAS.

The letters from Mr Koh and Mr Tan remind us that Singapore cannot be complacent on AML/CFT risks.

Cross-border money-laundering risks are constantly evolving.

Where new cross-border risks arise, Singapore will work proactively with our foreign counterparts to understand the nature of these risks, and take the necessary action to mitigate them.

Any person who comes across a transaction that may be linked to money laundering should lodge a report with the Suspicious Transaction Reporting Office at the Commercial Affairs Department.

Bey Mui Leng (Ms)
Corporate Communications
Monetary Authority of Singapore
ST Forum, 5 Jun 2015

Are we well equipped to fight money laundering?

IT IS not surprising to read that criminals continue to actively funnel large amounts of dirty money through legitimate banking systems to escape legal detection ("'Look out for dirty money in Aussie property'"; May 16).

However, it is alarming and surprising to read that Singapore is among the list of countries identified and, worse, we are seen to be a major hub for this conduit of such hot money.

Anti-money laundering laws have been in place in Singapore for years, and banks are required to familiarise themselves with them.

Consequently, if it is true that Singapore is a major site of money laundering, it raises the following fundamental questions on Singapore's banking laws and practices:

How robust are our anti-money laundering laws?

How closely are the banks operating in Singapore complying with the laws?

Are the banks fully equipped to check and clear every customer of any associated risk of money laundering?

How effective is the enforcement by our regulatory body?

Are there sufficient punishments to "crack the whip" on banks which are slack in their internal supervision and monitoring?

These billions of dollars of hot monies are derived from illicit drug trafficking, corruption, terrorism and other criminal activities.

As an international financial centre, Singapore cannot be slack in the discharge of its anti-money laundering duties.

While the report links this unhealthy situation to the fuelling of the booming Australian property market, are we sure this is not also a major reason for the Singapore property boom?

I hope the Monetary Authority of Singapore and the banks operating locally all play their part to ensure we eliminate or minimise such incidents.

To successfully fight this war on global money laundering, we need total cooperation at all levels.

Raymond Koh Bock Swi
ST Forum, 28 May 2015

Banks not a big worry, but watch other sectors

MR RAYMOND Koh Bock Swi asked how robust our anti-money laundering laws are ("Are we well equipped to fight money laundering?"; last Thursday).

The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) criminalises money laundering in Singapore.

The Financial Action Task Force (FATF), a global body that polices against money laundering and terrorist financing activities around the world, is satisfied with this law. Singapore is the only Asean country qualified to be a member of this task force.

Mr Koh also asked how closely banks operating in Singapore are complying with the law.

All banks in Singapore must comply with the CDSA, as well as the Monetary Authority of Singapore's (MAS) anti-money laundering rules and regulations.

The MAS rules require all banks to establish comprehensive customer due diligence policies and procedures to combat money laundering (and terrorist financing) activities in their day-to-day operations. The FATF is also similarly satisfied with the MAS' rules on money laundering.

Mr Koh also wanted to know if banks are fully equipped to check and clear every customer of any associated risk of money laundering.

The answer is "yes", but no bank in the world can guarantee that every customer is not tainted with money-laundering activities.

One can expect only mitigation, and not total eradication of money laundering, because sophisticated customers who engage in these activities are smart and employ professionals to structure their activities to avoid detection.

The MAS conducts regular inspections to ensure the banks comply with the rules. In extreme cases, the MAS can even revoke a bank's licence if it refuses to comply. The FATF also conducts its checks on banks here on its routine evaluative visits.

Having trained many bank staff in South-east Asia over the past 20 years, I have found Singapore banks to be the most compliant, because we have a no-nonsense and robust regulator.

My concern lies not with the banks, but with weaker sectors, for instance, the real estate sector, as alluded to by Mr Koh. However, I am glad the regulator is now enforcing anti-money laundering controls on real estate agents in Singapore.

Tan Sin Liang
ST Forum, 4 Jun 2015

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