Singapore publishes National Anti-Money Laundering Strategy

13 November 2024

On 30 October 2024, the Ministry of Home Affairs, Ministry of Finance, and Monetary Authority of Singapore (“MAS”) announced the publication of Singapore’s National Anti-Money Laundering Strategy (“National AML Strategy”), as part of continuing efforts to maintain the effectiveness of Singapore’s anti-money laundering (“AML”) framework. The National AML Strategy outlines Singapore’s strategic approach to address money laundering (“ML”) risks, and guides its risk-targeted actions to combat ML amid rapidly changing risks and criminal typologies.

MAS also published risk assessment reports, including the Proliferation Financing National Risk Assessment and Counter-PF Strategy (“PF NRA”), updated Virtual Assets Risk Assessment (“VA RA”), updated Money Laundering and Terrorism Financing Risk Assessment of Legal Persons (“LP RA”), and Money Laundering and Terrorism Financing Risk Assessment of Legal Arrangements (“LA RA”), on 30 October 2024. An information paper setting out MAS’ anti-money laundering/countering the financing of terrorism (“AML/CFT”) supervisory expectations was also released.

National Anti-Money Laundering Strategy

The National AML Strategy has three key pillars:

• Prevent: To deter proceeds of crime from entering Singapore’s system and prevent the misuse of Singapore’s system by criminals.
• Detect: To identify illicit flows and activities and ensure timely and effective mitigation, disruption, and enforcement actions.
• Enforce: To take firm and dissuasive actions against persons who abuse Singapore’s system for ML.

These three pillars are in turn supported by three inter-dependent building blocks of (i) Whole-of-Society Coordination and Collaboration, (ii) Legal and Regulatory Framework, and (iii) International Cooperation, which form the foundation of Singapore’s AML framework.

The National AML Strategy also takes into account Singapore’s updated Money Laundering National Risk Assessment (“ML NRA”) which synthesised observations on ML risks over the years, as well as other risk assessments and reviews developed to enhance Singapore’s risks understanding and risk mitigation measures.

Money Laundering National Risk Assessment

The ML NRA forms part of Singapore’s continuing efforts to maintain the effectiveness of its AML regime amid the evolving risk landscape. It synthesises the ML risks observed by the Singapore law enforcement agencies, the Suspicious Transaction Reporting Office, and supervisory authorities, as well as feedback from private sector entities and counterpart foreign authorities.

The ML NRA provides an overview of Singapore’s key ML risks, taking into account an extensive range of qualitative and quantitative indicators on threats, vulnerabilities, and control factors. The ML NRA identifies Singapore’s key threats as fraud (particularly cyber-enabled fraud), organised crime, corruption, tax crimes, and trade-based ML.

The banking (including wealth management) sector is assessed to pose the highest ML risks, while among the designated non-financial businesses and professions (“DNFBP”) sectors, corporate service providers pose higher ML risks. Other higher risk sectors include digital payment token service providers, cross-border money transfer service providers (including remittance agents), licensed trust companies, the real estate sector, and precious stones and metals dealers.

Financial institutions (“FIs”) and DNFBPs, especially entities in sectors which are assessed to pose higher ML risks, should take reference from the ML NRA in assessing their risks and enhance their controls accordingly.

Proliferation Financing National Risk Assessment and Counter-PF Strategy

To update and deepen Singapore’s proliferation financing (“PF”) risk understanding, Singapore carried out a PF national risk assessment, building on its existing PF risk understanding and tapping on relevant Singapore authorities and private sector experts for a comprehensive assessment. The PF NRA identifies the key PF threats Singapore is exposed to, as well as higher-PF risk sectors. It also sets out the key PF risk mitigation measures that have been undertaken by both Singapore authorities and the private sector.

Singapore is exposed to the key PF threats of misuse of legal persons, ship-to-ship transfers, movement of dual-use goods, export of luxury goods, and misuse of virtual assets. The following sectors have also been assessed to be exposed to higher PF risks:

• Financial sectors: Banks, digital payment token service providers, remittance agents, and maritime insurers.
• Non-financial sectors: Corporate service providers, precious stones and precious metals dealers, and lawyers.

To better position itself to manage key PF threats and higher-PF risk sectors, Singapore has developed a counter-PF strategy. All financial and non-financial sectors (including those sectors not identified as being exposed to higher PF risks) are reminded to remain alert to PF risks, and to factor in findings from the PF NRA as they review and enhance their counter-PF controls, including those in relation to the relevant targeted financial sanctions.

Virtual Assets Risk Assessment

The VA RA provides a targeted review of the ML, terrorism financing (“TF”), and PF risks associated with virtual assets. The VA RA identifies the key threats and vulnerabilities Singapore is exposed to and outlines relevant mitigation measures that government agencies and the private sector have put in place to mitigate the ML, TF, and PF risks arising from virtual assets.

The VA RA assessed that Singapore’s key threat areas, where cases involving virtual assets were observed, include cyber-enabled fraud, cybercrime through ransomware and thefts from wallets, and ML.

FIs and DNFBPs should take reference from the VA RA in assessing their virtual assets-related risks and enhance their controls as appropriate.

Money Laundering and Terrorism Financing Risk Assessment of Legal Persons

The LP RA provides a targeted review of the ML and TF threats and vulnerabilities that the various types of legal persons in Singapore are exposed to. It also outlines relevant mitigation measures that have been put in place to mitigate these risks and complements Singapore’s national ML and TF risk assessments.

FIs and DNFBPs (such as banks, corporate service providers, and accountants) should take reference from the LP RA in assessing their ML and TF risks and enhance their controls where appropriate.

Money Laundering and Terrorism Financing Risk Assessment of Legal Arrangements

The LA RA provides a targeted review of the ML and TF threats and vulnerabilities that the various types of legal arrangements in Singapore are exposed to. It also outlines relevant mitigation measures that have been put in place to mitigate these risks and complements Singapore’s national ML and TF risk assessments.

FIs and DNFBPs (such as banks, trust companies, and lawyers) should take reference from the LA RA in assessing their ML and TF risks and enhance their controls where appropriate.

Information paper on AML/CFT supervisory expectations

MAS’ information paper on AML/CFT Supervisory Expectations from Recent Inspections, which follows a series of AML/CFT inspections across a range of FIs, sets out MAS’ supervisory expectations and good practices for effective AML/CFT frameworks and controls that FIs should benchmark themselves against.

Reference materials

The following materials are available on the MAS website www.mas.gov.sg:

• Press release: Singapore publishes National Anti-Money Laundering Strategy
• National Anti-Money Laundering Strategy Singapore
• Money Laundering National Risk Assessment
• Proliferation Financing National Risk Assessment and Counter-PF Strategy
• Virtual Assets Risk Assessment
• Money Laundering and Terrorism Financing Risk Assessment of Legal Persons
• Money Laundering and Terrorism Financing Risk Assessment of Legal Arrangements
• Information paper on AML/CFT Supervisory Expectations from Recent Inspections