Singapore has released its updated Money Laundering (ML) National Risk Assessment (NRA), highlighting increased risks in the digital payment token (DPT) services sector.
While DPT activities in Singapore constitute a small portion of global activities, authorities have noted a rise in reported cases and various ways these tokens can be exploited. Consequently, Singapore is closely monitoring the sector.
The updated assessment also identifies other high-risk sectors within the financial industry, including payment institutions that provide cross-border money transfer services, such as remittance agents, and external asset managers.
These sectors face significant money laundering risks due to their roles in facilitating large transactions and serving high-risk clients from jurisdictions with higher ML risks.
Since the last assessment in 2014, Singapore has closely monitored ML risks, including those related to legal persons, virtual assets, and environmental crimes, to ensure timely risk mitigation.
The updated ML NRA consolidates observations from local supervisory and law enforcement agencies, the Suspicious Transaction Reporting Office (STRO), private sector entities, and foreign authorities.
As an international financial center and trading hub, Singapore is vulnerable to criminals exploiting its financial system to launder illicit funds and assets.
The updated assessment highlights increased risks due to economic and geopolitical shifts, as well as the rise in technology-enabled transactions.
Key findings of the updated ML NRA include major ML threats originating from fraud, particularly cyber-enabled fraud by overseas syndicates, as well as crimes like organised crime, corruption, tax crimes, and trade-based money laundering.
Common ML typologies involve illicit funds flowing through Singapore via bank accounts, misuse of shell companies, and placement in high-value assets like real estate and precious metals.
The banking sector poses the highest ML risks due to its role in facilitating large transactions and serving high-risk customers from jurisdictions with higher ML risks.
Within the Designated Non-Financial Businesses and Professions (DNFBP) sectors, corporate service providers (CSPs) are identified as high-risk due to their role in company incorporation and potential misuse of legal entities.
Other high-risk sectors include real estate, licensed trust companies, casinos, and precious metals.
Singapore remains committed to addressing these risks by implementing appropriate measures and continuing risk-targeted efforts to enhance detection, disruption, and enforcement of illicit activities.
The findings from the updated ML NRA will guide stakeholders, including financial institutions and DNFBPs, in strengthening risk-based measures in the fight against money laundering.
Featured image credit: Edited from Freepik
