Singapore could do more to counter TBML says FATF

Singapore could do more to address money-laundering risks posed by the country’s status as a global centre for finance and international trade, the Financial Action Task Force (FATF) has said.

A new FATF report – ‘Anti-money laundering and counter-terrorist financing measures, Singapore’ – singles out trade-based money laundering (TBML) as a specific issue to be addressed and says that the city’s ability to attract money flows from abroad makes it vulnerable to becoming a “transit point” for illicit funds.

TBML concerns

Singapore conducted a National Risk Assessment (NRA) exercise during 2012-13. But according to FATF, the NRA report does not provide an analysis of TBML or tax offences beyond stating that “it is noted that there are reports internationally that have cited these crime types as risk areas for Singapore but the number of cases investigated…is very low”.

Singaporean officials have made considerable efforts to leverage overseas experiences of TBML. Resulting guidance was issued to banks in 2015 highlighting red flags for trade financing associated with TBML based on international experience.

However, risks relating to the types of TBML that are likely to materialise in Singapore are yet to be well elaborated in the NRA.

Customs worries

FATF assessors found that customs officers in particular had limited understanding of TBML risks and observed that customs’ guidance is high level and does not highlight specific risks to Singapore.

Additionally, the report said no assessment has been conducted on trade in services vulnerability to money laundering and tax evasion, the ease of establishing companies and exposure to international laundering.

The FATF report ‘Anti-money laundering and counter-terrorist financing measures, Singapore’ can be found here.

Categories: Trade Based Financial crimes News

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