Money Laundering National Risk Assessment and National Asset Recovery Strategy

07 AUG 2024

Dear Regulated Dealer,

As part of Singapore’s continuing efforts to maintain the effectiveness of its anti-money laundering and countering the financing of terrorism ("AML/CFT") regime, and to keep pace with best practices as recommended by the Financial Action Task Force ("FATF"), Singapore had published its updated Money Laundering National Risk Assessment ("ML NRA") and National Asset Recovery Strategy ("NARS") in June 2024.

To support this effort, ACD has prepared the following key highlights from the ML NRA and the NARS for regulated dealers to note and take action.

ML NRA

Singapore’s ML NRA consolidates the ML risks observed by Singapore law enforcement agencies and supervisory authorities, as well as feedback from private sector entities and counterpart foreign authorities.

As an international business, financial and trading centre, Singapore is exposed to external threats arising from predicate offences that have a foreign nexus.

Key ML threats faced by Singapore include:

  • Fraud, particularly cyber-enabled fraud (e.g. foreign fraud or fraud committed domestically but orchestrated by syndicates typically located overseas)

  • Foreign organised crime (e.g. illegal online gambling)

  • Corruption

  • Tax crimes

  • Trade-based ML

  • Criminal breach of trust (remains as Singapore’s key domestic ML threat)

  • Unlicensed moneylending

According to the ML NRA 2024, the precious stones and precious metals dealers ("PSMD") sector is assessed as presenting medium-high ML risk. PSMDs are more vulnerable to ML risk due to the following factors:

  • Precious stones and precious metals ("PSPM") generally possess high intrinsic value in a relatively compact form that potentially maintains or increases in value over time, which makes it attractive to money launderers;

  • PSPMs facilitate the anonymity of ownership;

  • The retail PSPM sector deals largely with walk-in and one-off customers, which includes exposure to foreign customers who may be tourists from higher risk jurisdictions; and

  • Payment in cash, digital payment tokens and through bartering gold, especially for large transactions, poses higher ML risk as it facilitates the anonymity of transactions, makes it harder to trace the original source and allows the payer to hide their identity.

Singapore has also developed its NARS which focuses on the following four pillars:

  1. Detect suspicious and criminal activities by tracing the illicit funds;

  2. Deprive criminals of their ill-gotten proceeds through prompt seizure and confiscation;

  3. Deliver maximum recovery of assets for forfeiture and restitution to victims; and

  4. Deter criminals from using Singapore to hide, move, or enjoy their illicit assets.

What can you do?

Regulated Dealers should take reference from the ML NRA in assessing your ML risks and enhance your controls as appropriate. You are encouraged to:

  1. Be alert to the potential vulnerabilities outlined in the ML NRA. PSPM tend to be good stores of value and accepted as an alternative to monies and could be used in the layering and integration of funds in ML transactions. Case studies in the ML NRA also show how proceeds from suspected overseas criminal activities and domestic fraud have been used to purchase gold bars, luxury watches, and jewellery.

  2. Take the appropriate risk mitigation measures such as understanding, detecting and reporting suspicious transactions to guard against the ML risks that your business may be abused, where relevant.

Please refer to the link for the fullML NRA and NARS reports.