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Singapore’s Ministry of Home Affairs (MHA) has  new legislation that aims to help local law enforcement pursue money laundering cases that originate from overseas criminal activity.

On Tuesday (July 2), the MHA announced that the  has been introduced to parliament for a first reading.

If adopted, the bill will amend the .

Enacted in 1992, the CDSA is the primary legislation in Singapore that criminalises the laundering of criminal proceeds and provides for the investigation and confiscation of such proceeds.

However, as noted by the MHA, the CDSA does not currently allow Singapore law enforcement agencies to respond effectively to money laundering cases that originate overseas.

At present, to prosecute a money laundering offence, prosecutors need to show that the monies allegedly laundered in Singapore are directly linked to specific criminal activity.

In cases where criminal conduct is committed overseas, prosecutors must show the complete trail of the monies — from where the crime was committed to where the proceeds were deposited with a money launderer.

“In many cases, law enforcement agencies face challenges in obtaining the requisite evidence from foreign victims, entities and authorities,” said the MHA.

“This is especially so if the criminal proceeds had flowed through many jurisdictions before entering Singapore.” 

If the bill is passed, the amended CDSA would no longer require prosecutors to show a direct link between the criminal conduct and the monies allegedly laundered in Singapore.

“It will be sufficient for the prosecution to prove beyond reasonable doubt that the money launderer knew or had reasonable grounds to believe that he was dealing with criminal proceeds,” said the MHA.

“This will facilitate the prosecution of money mules in cases where the monies laundered had passed through bank accounts and intermediaries in foreign jurisdictions before entering Singapore.”

Improved data sharing across agencies

The bill also seeks to enhance cross-agency data sharing to improve the detection of money laundering and terrorist financing activities.

If adopted, it will introduce amendments to the Income Tax Act, the Goods and Services Tax Act, the Regulation of Imports and Exports Act and the Free Trade Zones Act to this effect.   

These amendments will allow the Inland Revenue Authority of Singapore and Singapore Customs to share tax data and trade data with Singapore’s Financial Intelligence Unit and the Suspicious Transaction Reporting Office (STRO).

Amendments will also be made to the CDSA to give the Council for Estate Agencies and the Accounting and Corporate Regulatory Authority access to suspicious transaction reports filed by regulated entities.

“The sharing of such data will enable STRO to augment its analyses on money laundering and terrorist financing risks and provide richer intelligence to law enforcement agencies and regulators,” said the MHA.

“Regulators will also have a better overview of the existing and emerging risks and trends relating to their sectors, and will be able to take AML/CFT supervisory and regulatory actions earlier and more effectively.”

Combating cyber-fraud a key concern

The introduction of the AML and Other Matters Bill follows last month’s publication of the  by the Monetary Authority of Singapore (MAS).

The assessment is conducted every ten years, and the latest iteration found that the money laundering threats and typologies Singapore faces have changed significantly since the previous assessment in 2014.

It highlighted fraud, and in particular cyber-enabled fraud, as a key money laundering threat.

According to the MAS, Singapore law enforcement agencies continue to see a high number of money laundering cases arising from fraud and cyber-fraud that takes place overseas.

Fraud is also the most frequently cited offence in foreign authorities’ requests to Singapore regulators and law enforcement for assistance.

“This threat has been exacerbated by advancements in digitalisation, which allow syndicates to broaden their reach to the mass public through the abuse of social media platforms and transcend borders to launder their ill-gotten gains,” said the MAS.

Last month, as covered by 91����ԭ��, new legislation came into effect in Singapore that specifically aims to tackle fraud originating on social media platforms.

The Online Criminal Harms Act (OCHA) will force Facebook Marketplace and other e-commerce platforms to verify the IDs of “risky sellers”.

If this does not lead to a reduction in reporting fraudulent activity by the end of 2024, these platforms will be forced to verify the IDs of all sellers.

Banks, digital assets labelled 'high risk'

Where fraudsters are successful and crimes do take place, the MAS said that banks continue to face the highest risk of money laundering activity of any sector.

Illicit funds that flow into or through Singapore are most commonly laundered via bank accounts, the regulator said, particularly as rapid “pass-through” transactions.

These transactions take advantage of Singapore’s instant payment system, PayNow, allowing criminals to move funds at speed through networks of third-party mules.

Both corporate and individual mule bank accounts have been identified as conduits exploited by money launderers, particularly where foreign criminal syndicates and professional money launderers are involved.

Other sectors the MAS identified as “higher risk” and “susceptible” to money laundering include payment institutions and providers of digital payment token services (i.e., digital assets).

“While Singapore faces a low domestic crime rate, we are not spared the global surge in money laundering threats posed by fraud,” said the regulator.

“We continue to be cognisant of the threats posed by cyber-enabled fraud, the range of sectors that such criminals seek to exploit, and the abuse of individual and corporate mules in these typologies.”