Singapore earns top rating in fight against financial crime despite shadow of S$3 billion money laundering scandal
Despite the high marks, a global watchdog has flagged gaps in sanctions and oversight of certain sectors
Add BT as a preferred source
[SINGAPORE] Singapore received the highest monitoring rating from a global watchdog for its fight against financial crime. This is despite the S$3 billion money laundering scandal in 2023 exposing vulnerabilities tied to its role as a global financial hub.
Such high-profile cases underscore Singapore’s attractiveness to criminals, as well as the scope and scale with which they attempt to misuse Singapore’s system.
This is based on key findings from a report released on Wednesday (May 6) by the Financial Action Task Force (FATF), a global anti-money laundering watchdog.
The Republic is among the first few countries – and the first financial centre – to be evaluated under the fifth round of FATF, emerging with stronger ratings than its previous assessment in 2016.
Based on the latest outcome, Singapore has been placed on “regular follow-up” – the most favourable monitoring category in the latest peer evaluation report. This is a step up from its “enhanced follow-up” status a decade ago, which was reserved for FATF members requiring more intensive monitoring.
The review covered the period from 2020 to July 2025, with significant enhancements made to FATF standards since its last review in 2016. The assessment overlapped with the 2023 money laundering case that was the largest in Singapore’s history and among the biggest globally.
Navigate Asia in
a new global order
Get the insights delivered to your inbox.
FATF is an independent global body established by the Group of Seven nations in 1989 that sets international standards to combat money laundering, terrorist financing and proliferation financing. It currently comprises 40 members; Singapore joined in 1992.
How Singapore fared
Out of the 11 immediate outcomes in FATF standards, which take into consideration a country’s risk and context, Singapore has attained seven “substantially effective” ratings and four “moderately effective” ratings.
Meanwhile, among the 40 technical compliance recommendations, Singapore was rated “compliant” or “largely compliant” on 38 of them, and two rated “partially compliant”.
Radish Singh, EY Asean financial services risk consulting leader, said: “Singapore’s strong outcome in the fifth round of the FATF evaluation reinforces its position as a leading international financial centre, particularly given the more stringent evaluation methodology.
“This reflects not just compliance, but a maturing system that is increasingly proactive in managing financial crime and scams.”
Victor Lai, principal consultant at corporate advisory firm CitadelCorp, noted that the outcome is a net positive in signalling the robust nature of Singapore’s legal and regulatory frameworks.
“The report underscores Singapore’s reputation for corporate transparency, swift prosecution of money laundering activities, and the implementation of appropriate sanctions towards proliferation financing,” he added.
Tanty Muliani, chief compliance officer, Singapore and Asean, Standard Chartered, said the outcome of this peer evaluation provides confidence to its clients, reinforcing Singapore as a trusted international financial centre with a robust and effective anti-money laundering regime.
Areas of improvement
Despite the broadly positive assessment, FATF identified three areas where the framework can be further developed and proposed recommendations for Singapore.
In terms of beneficial ownership transparency, FATF noted that gaps remain around foreign-formed companies and trusts established overseas.
Addressing these can enhance their understanding of risks posed by legal arrangements, unregistered foreign companies and the misuse of multi-legal person or arrangement structures.
The report recommended a more robust and updated central beneficial ownership registry for companies and regulated entities.
It identified certain sectors that are not traditionally subject to financial crime compliance requirements, such as representation offices of foreign flag states that need to improve their proliferation financing risk awareness.
And while the report noted that Singapore has a risk-focused framework, with good understanding by authorities and strong industry partnerships, it recommended that the framework for financial penalties and sanctions can be more dissuasive.
Lam Chee Kin, group head of legal and compliance at DBS, noted that these recommendations will likely come with trade-offs.
“Beneficial ownership transparency based only on declarations can be suborned by criminals, (though) there are legitimate reasons like estate planning for offspring in a divorce, (which) favour privacy,” he noted.
He also flagged that Singapore has a track record of complementing financial penalties with more punitive sanctions, including revoking licences for institutions or jail terms and prohibition orders for individuals.
“Headline-grabbing financial penalties are one thing, but Singapore’s regulators also focus on supervisory actions which yield sustainable change and improvement,” he said.
Meanwhile, Lai noted that the recommendations focus on raising risk awareness across the sectors that are involved in the combat against money-laundering and proliferation financing.
“This is very much in line with Singapore’s ‘risk-based approach’ towards policy development, risk-monitoring and enforcement,” he added.
Notably, the assessment period encompassed one of Singapore’s most high-profile money laundering cases to date, and formed part of FATF’s review of Singapore’s law enforcement and supervisory effectiveness.
The case, which was uncovered in August 2023, involved 10 convicted foreign nationals and 17 suspects who fled the country. The Fujian-linked syndicate laundered proceeds from overseas illegal gambling through property and luxury assets, triggering seizures and regulatory penalties for financial institutions (FIs).
Nine FIs in Singapore have been penalised a total of S$27.5 million for anti-money laundering-related breaches related to their roles in this case.
The Monetary Authority of Singapore (MAS) had pointed out earlier that most of the FIs have established anti-money laundering policies and controls, with the breaches arising out of “poor or inconsistent implementation”.
According to the report, Singapore used financial intelligence to detect, investigate and prosecute a complex case where foreign persons brought billions derived from foreign remote gambling offences, representing one of the world’s largest crackdowns on money laundering.
This case highlights the quality of Singapore’s law enforcement and exemplifies its high-level political commitment to preventing the misuse of its financial system, which includes setting up an inter-ministerial committee to review and improve Singapore’s anti-money laundering system, the report added.
Looking ahead
“We are aware that Singapore, like other open economies, will continue to face nefarious actors who seek to exploit our economy and financial system for illicit purposes,” said a statement issued by MAS, the Ministry of Home Affairs and Ministry of Finance.
Singapore will carefully study the recommendations by FATF and assess how they can be adopted in its context and in a “risk-proportionate” manner, the authorities added.
EY’s Singh noted that no major financial centre is immune to increasingly sophisticated, cross-border financial crime. What is crucial is how swift banks identify the issue and the decisiveness of enforcement actions by authorities.
She identified a clear shift towards more intelligence-led approaches, tighter controls, enhanced use of technology or artificial intelligence-enabled detection capabilities, link analysis and AI-enabled horizon scans to sharpen detection.
“While these measures have strengthened detection, financial crime typologies are evolving just as quickly,” she said. “Staying effective will depend on how well FIs and all other gatekeepers in the system continue to adapt.”
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Copyright SPH Media. All rights reserved.
