Anti-money laundering regime to be kept robust without impeding legitimate businesses: Josephine Teo
Singapore is best served by a risk-based approach, in which only ‘instances of concern’ are looked into, says the minister
SINGAPORE’S anti-money laundering checks need to be sensible and calibrated, and not unduly impede legitimate businesses and investors, Second Minister for Home Affairs Josephine Teo said in Parliament on Tuesday (Aug 6).
Closing the debate on the Anti-Money Laundering and Other Matters Bill, she said: “What serves us best is a risk-based approach, which we have taken. This means not viewing all transactions with suspicion, but looking into instances of concern.”
Sectoral regulators will continue working with “gatekeepers” in the respective industries to improve compliance capabilities and strike the right balance, said the minister, who also leads the Ministry of Digital Development and Information.
The Bill, which was passed, strengthens Singapore’s law enforcement agencies’ ability to prevent, detect and take action against money laundering.
Staying attractive to investors
In the debate, several Members of Parliament raised concerns that the legislative changes may hurt Singapore’s attractiveness to investors.
Foo Mee Har (West Coast GRC) said these new measures must not come at the cost of jeopardising Singapore’s reputation as a competitive global business and financial hub.
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Opening an account at a bank can now be “protracted and delayed, with layers of checks perceived as disproportionate and not commensurate with the assessed levels of risks”, she said, based on feedback from affected parties.
She added: “Some have expressed concern that our banks have taken a knee-jerk reaction in the reviewing of accounts, issuing retroactive requests for documents and information that are cumbersome and time-consuming to produce, (and) often seen as unnecessary, given the account sizes, tenure of the relationship with the financial institution, and transaction patterns.”
She urged the authorities to work with the industry to ensure that the implementation of anti-money laundering rules is well guided, well understood and proportionate.
Edward Chia (Holland-Bukit Timah GRC) highlighted the need for compliance officers to have an accurate understanding of the new rules, and to “avoid taking an overly conservative approach that places excessive compliance burdens”.
“Excessive conservatism can stifle legitimate financial activities, deter investment inflows and negatively impact job creation,” he said.
Responding to concerns raised, Teo noted Singapore’s strong track record of providing a stable and predictable environment for businesses to thrive and investors to manage their wealth, which would not change with these legal amendments.
She added: “As we continue to update these laws through amendments such as those proposed today, we can keep our anti-money laundering regime robust and effective, while ensuring that our interest in promoting and strengthening our financial ecosystem is not compromised.”
Inter-agency mechanisms have been set up to coordinate the implementation of anti-money laundering efforts, she noted. “The fight against money laundering is a journey without end, and our measures cannot come as one burst of fire, with no further heat applied to the problem areas.”
Dealing with seized properties
Among other things, the Bill changes how seized properties are dealt with.
For instance, the court can now order the sale of a seized or restrained property without the consent of all parties involved. But this is provided the court is satisfied that the value of the property is likely to depreciate, or undue costs are involved in maintaining the property, or that the sale would be in the interest of justice.
Other amendments deal with properties in cases where the suspect has absconded. For instance, a person who has absconded must now personally present themselves before a law enforcement officer to assist with investigations before they can make a claim on a property.
Associates will also not be able to lay claim to a property simply on the grounds that it was a gift from the absconded person. With the amendments, the court may consider whether a seized property was obtained through legitimate sources, such as income or investments, before it is considered for release to a third party. This applies even if the third party has not committed any crime.
The courts will not be able to dispose of seized property if there is a pending investigation linked to an absconded person who is reasonably suspected of having committed an offence in respect of the property, regardless of the progress of the investigation.
Another change is the designation of foreign environmental crimes as money laundering predicate offences, thus allowing Singapore enforcement agencies to investigate them.
And in a move that alleviates challenges the prosecution faces in dealing with money laundering offences, prosecutors will only need to prove that the money launderer knew or had reasonable grounds to believe that the property dealt with was from the gains of criminal conduct.
This comes as law enforcement agencies face enormous challenges in obtaining evidence from foreign victims, entities and authorities, especially if the funds have flowed through many countries before entering Singapore.
The threshold at which casino operators must make customer due diligence checks has also been lowered to S$4,000 or more for single cash transactions or deposits.
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