Singapore's Anti-Money Laundering Regime

1.01 pm

The Second Minister for Home Affairs (Mrs Josephine Teo): Mr Speaker, on 15 August 2023, more than 400 Police Officers conducted simultaneous raids at multiple locations islandwide. Ten persons were arrested and charged for offences, including laundering proceeds from overseas criminal activities, and their seizable assets in Singapore were seized.

This is one of Singapore's largest anti-money laundering operations. Many Parliamentary Questions have been filed. They centre around the effectiveness of Singapore's existing measures to detect and counter money laundering activities; and whether additional measures are needed to curb money laundering in Singapore.

My Statement will be in five parts: first, an update on this case and the investigations; second, money laundering risks in international financial centres; third, an overview of Singapore's anti-money laundering regime; fourth, the immigration-related issues that have arisen from this case; and fifth, an outline of our plans to ensure that Singapore's anti-money laundering regime remains robust and effective.

After my Statement, there will be Statements by Second Minister for Finance and National Development Ms Indranee Rajah, and Minister of State and the Monetary Authority of Singapore (MAS) Board Member Mr Alvin Tan.

Sir, let me start with how the case unfolded. Mr Murali Pillai, Mr Gan Thiam Poh and Assoc Prof Jamus Lim asked whether there were red-flag indicators before the arrests were made and whether the arrested persons will be investigated for running organised crime syndicates or for criminal offences in other jurisdictions.

Sir, the intelligence gathering and planning for a major operation like this are not trivial. They take months, years even. I will share what I can, without undermining ongoing investigations by Police.

Police had initially received disparate information on suspicious activities. In 2021, our anti-money laundering regime picked up a few signals, including the use of suspected forged documents to substantiate sources of funds in bank accounts in Singapore. Some Suspicious Transaction Reports (STRs) were filed by financial institutions and other companies. Police began looking separately into these alerts.

In early 2022, Police launched a comprehensive, coordinated intelligence probe. The probe uncovered a web of individuals believed to have connections amongst themselves, including by familial ties.

Police analysed the information and probed further, quietly. To avoid alerting the suspects, the work was kept to a very small group of officers, and a decision was made to hold off any enforcement or overt investigative actions. Police's aim was to probe extensively and develop as full a picture as possible of the suspects and their associates, their suspected criminal activities and their assets, before making any move against them.

As the probe progressed, the web uncovered by the Police grew and grew. More and more individuals were implicated in the alleged money laundering operation, and more and more of their assets held in Singapore were discovered. Police painstakingly and discreetly traced their ties and assets.

Members would appreciate that anti-money laundering probes of this scale and nature are complex. Connecting the dots between people and things is a lot easier said than done. We also had to be very discreet, and so Police moved cautiously and with only a very small team. Had the suspects caught wind of our probes, the suspects and their assets might have fled, and the investigations and the entire operation might have been jeopardised.

Earlier this year, the Police assessed that they had enough information, and consulted the Attorney-General's Chambers (AGC). AGC assessed that we had sufficient reason to suspect that criminal offences had been committed in Singapore.

Following the intensive intelligence probes, extensive reviews of information and examination of evidence, Police moved decisively against the suspects on 15 August this year.

There has been some speculation circulating in news outlets – internationally and domestically – that this operation was carried out at the behest of China. This is completely untrue.

Singapore does not need another country to tell us what to do to enforce our laws, nor will we do anything unless it is in our own interests. In this case, we started investigations because we suspected that offences had been committed in Singapore. Once we confirmed our suspicions, we acted.

So far, 10 persons have been arrested and charged for offences, including laundering criminal proceeds. As investigations are ongoing, I will provide an update to the extent possible.

The proceeds likely came from criminal activities that took place outside of Singapore. These include illegal online gambling and unlicensed moneylending.

In addition to money laundering, some of the accused have been charged with forgery as well. Two of the 10 persons have been charged with additional offences of resisting arrest and perverting the course of justice.

Many others, not arrested, are assisting with investigations. Yet others are wanted by Police for investigations but are not in Singapore.

On 20 September, Police updated that the total value of assets seized or issued with prohibition of disposal orders stood at more than S$2.4 billion. Since then, Police have conducted further operations and extensive investigations. To date, the total value of assets seized or issued with prohibition of disposal orders by the Police stands at more than S$2.8 billion. This includes:

Prohibition of disposal orders issued against 152 properties and 62 vehicles with a total estimated value of more than S$1.24 billion, as well as thousands of bottles of liquor and wine.

Seizures of monies in bank accounts amounting to more than S$1.45 billion; cash, including foreign currencies, amounting to more than S$76 million; cryptocurrencies of more than S$38 million; 68 gold bars, 294 luxury bags, 164 luxury watches and 546 pieces of jewellery.

Police's investigations are still ongoing. As we probe further, there may be more arrests and assets seized.

There has been some interest in how we will deal with the seized assets. Mr Zhulkarnain asked about this. The seized assets will be dealt with accordingly and under our laws, depending on the findings. The disposal will be conducted by the Courts.

There are also ongoing probes by various sectoral regulators, including Government agencies overseeing corporate service providers, real estate agents, financial institutions and others. Police are working closely with the sectoral regulators and will take action against the companies and individuals should criminal offences be disclosed, such as abetment of money laundering. If there is negligence or non-compliance with anti-money laundering requirements, the sectoral regulators will take action.

Some of the arrested individuals made donations to charities in Singapore. Mr Edward Chia asked whether these are being investigated. Some charities have decided on their own to ringfence these donations. Others have made Police reports and plan to surrender the monies to the Police. The Commissioner of Charities (COC) will issue an advisory to encourage all charities to review their donor records to ascertain whether they have received donations from the arrested individuals and entities linked to them, and file the requisite STRs. It will also include advice to charities on how to handle the monies.

In summary, this case is one of the largest anti-money laundering operations not just in Singapore, but likely the world. We probed extensively to uncover the linkages. We were comprehensive in our actions and operation.

We will not hesitate to take strong enforcement action against people who would use Singapore as a haven to launder proceeds of crime. We will deal with them and their ill-gotten gains to the fullest extent of our laws.

Let me now provide the backdrop to the anti-money laundering operation which we have just carried out, in particular, the risks that global financial hubs like Singapore face.

Singapore is an attractive place for investments and businesses. There is political and economic stability, strong rule of law and transparency. People are assured that their money is safe here.

The facts speak for themselves. Singapore was ranked third in the Global Financial Centres Index last year, behind only New York and London. Our ability to attract international funds has facilitated investments, growth and good jobs for Singaporeans. The financial sector contributes about 14% of our Gross Domestic Product (GDP) and employs about 200,000 people. It is important for us.

When we open for business – and we must be – criminals will also try to exploit the same economic openness and our strong reputation for the rule of law, to launder their illicit funds and create the appearance of legitimacy.

In fact, all major financial hubs, not just Singapore, are vulnerable. The same characteristics that make them attractive as financial hubs also make them attractive targets for money laundering. Reputable jurisdictions like Singapore take our anti-money laundering responsibilities seriously and pursue cases thoroughly.

Mr Saktiandi Supaat and Ms Foo Mee Har have asked how our efforts compare with others.

In February last year, the US Department of Justice announced its largest financial seizure to date of more than US$3.5 billion, which is equivalent to about S$4.8 billion. This was linked to the laundering of billions of dollars in cryptocurrency stolen from a 2016 hack of Bitfinex, a cryptocurrency exchange registered in the British Virgin Islands.

In January this year, Hong Kong Customs arrested nine persons suspected of 7,600 illicit deals involving over HK$6 billion, which is equivalent to about S$1 billion. The individuals were found to have operated multiple bank accounts for illegal transactions.

Earlier this year, in a case similar to ours, the Australian Federal Police (AFP) charged nine members of an international money laundering syndicate. They had enabled multiple transnational organised crime groups to launder funds derived from criminal activities. The AFP restrained more than AU$150 million – equivalent to about S$130 million – in property, cash and luxury items.

What about Singapore? Everyone knows that we have a zero tolerance approach for money laundering. But just as low crime does not mean no crime, zero tolerance does not mean zero occurrence. We are under no illusion that we can always keep out dirty money.

As one of the leading international financial centres in the world, the daily transactions in Singapore are voluminous. We have to rely on various stakeholders – the financial institutions and other gatekeepers in the system like corporate service providers, property agents, precious stones and precious metals dealers – to conduct the necessary checks and detect possible risks. A lot of it is picked up and acted upon.

This is therefore not the first time that we have taken serious enforcement action against money laundering and breaches of our money laundering requirements.

Members would recall the transnational case related to 1MDB, involving illicit flows through Singapore. Police extensively investigated the individuals who were suspected of committing offences in Singapore while MAS thoroughly examined the financial institutions through which the funds flowed.

Assets amounting to more than S$240 million were seized or prohibited. Three bankers were convicted for failure to report suspicious transactions and fined between S$10,000 and S$128,000 each. One banker was convicted of offences including money laundering and sentenced to more than four years of imprisonment. MAS issued to 11 individuals prohibition orders ranging from three years to lifetime bans from working in Singapore's financial sector for their gross misconduct.

Another example involved Wirecard. Following news of irregularities in Wirecard's financial statements and the alleged involvement of Singapore-based individuals and entities in the matter, MAS closely examined these suspicions.

Three banks and an insurer in Singapore were issued penalties amounting to S$3.8 million for failure to perform customer due diligence and to adequately establish the sources of wealth of high-risk customers. Seven individuals have been charged in relation to this case. Three of them have been convicted for offences including money laundering.

These examples leave no doubt that Singapore takes money laundering seriously. When there is reasonable suspicion to investigate, we do not hesitate to do so. We do not turn a blind eye to any risks once we are made aware of them. This is not the first time that we have taken serious enforcement action against money laundering offences, nor will it be the last.

Even with stringent measures in place, we continuously review our practices. Each time we tighten up, the realistic aim is not to expect that no dirty money will ever come in because that would inevitably also affect legitimate investments and businesses. Instead, the aim is to reduce risk, have a robust alert system and take prompt enforcement action when we discover such activities as we did in this case.

We must also not fool ourselves into thinking that no news is good news. Instead, we must have the capability to detect wrongdoings and when we do, have the resolve to act decisively and robustly.

This is why we have steadily and systematically built up our anti-money laundering regime over the years. We adopt a holistic ecosystem approach across the Government, public-private partnership and international collaboration.

A whole-of-Government effort is led by an inter-agency steering committee co-chaired by the Permanent Secretary of the Ministry of Home Affairs (MHA), the Second Permanent Secretary of the Ministry of Finance (MOF) and the Managing Director of MAS.

There is close partnership between the public and private sectors. An example is the Anti-money Laundering/Combating the Financing of Terrorism (AML/CFT) Industry Partnership, or ACIP. Co-chaired by MAS and the Police, ACIP brings together financial institutions to share analyses of emerging money laundering and terrorism financing risks as well as intelligence on specific cases.

Internationally, Singapore currently holds the presidency of the Financial Action Taskforce (FATF). FATF is an international organisation that sets the global standards to prevent money laundering and terrorist financing activities. We have been playing an active role in helping to enhance cross-border collaboration and strengthen anti-money laundering controls against new risk typologies.

Singapore's anti-money laundering strategy has three prongs and that applies across various sectors. First, prevention, underpinned by a robust legal and regulatory framework to deter criminals. The second prong, detection, is anchored by our STR regime and supervision by sectoral regulators. Our third prong, enforcement, is about taking strong action when there is suspicion of money laundering.

Allow me to elaborate. We have a robust legal and regulatory framework. Gatekeepers in various sectors have to comply with anti-money laundering requirements, including the conduct of due diligence.

Financial institutions are important gatekeepers. MAS requires them to conduct rigorous Know Your Customer (KYC) processes when accounts are opened and Customer Due Diligence (CDD) on transactions. MAS ensures financial institutions' adherence to the anti-money laundering requirements through close supervision and surveillance.

Besides the financial institutions, designated non-financial businesses and professions (DNFBPs) in other industries are also legally required to conduct KYC and CDD for their customers and transactions.

DNFBPs are gatekeepers in sectors that are known internationally to present higher risks of money laundering. They include real estate agents for property transactions, corporate service providers for company incorporation and dealers of precious stones and precious metals. There are also DNFBPs that provide professional services such as lawyers and accountants.

The Government agencies regulating the respective sectors regularly engage with the gatekeepers to ensure that they adhere to the anti-money laundering requirements.

Customers to these financial institutions and DNFBPs are also held accountable. Mr Murali asked whether it is a criminal offence if customers refuse to provide or provide false or misleading information to commercial entities conducting CDD checks.

If financial institutions and DNFBPs assess that certain information from their customer is required for the CDD checks and their customer refuses to provide the information, this should itself raise red flags. Financial institutions and DNFBPs would be legally required to file an STR if there are reasonable grounds to suspect that a transaction is connected to criminal conduct.

If a customer intentionally provides false or misleading information to commercial entities in order to circumvent the CDD checks, this may constitute a criminal offence under the Penal Code. We deal with this seriously.

Several Members – Mr Zhulkarnain, Ms Hany Soh, Miss Rachel Ong, Mr Don Wee, Mr Murali and Mr Neil Parekh Nimil Rajnikant – enquired about the anti-money laundering laws related to high-value items.

The Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act, or the PSPM Act, covers precious stones and precious metals (PSPM) and "precious products", which refer to any jewellery, watch or other finished product where at least 50% of its value is attributable to precious stones or precious metals.

Simply put, among the items seized, gold bars would be covered by our laws. Some watches and jewelleries would also be covered, depending on the proportion of their value which is attributable to PSPM.

PSPM dealers are required to perform CDD before they conduct transactions involving cash exceeding S$20,000 or where there are reasons to suspect money laundering. As PSPMs may easily be converted to cash, PSPM dealers are also required to file cash transaction reports with the Suspicious Transaction Reporting Office of the Commercial Affairs Department (STRO) if they conduct transactions involving cash exceeding $20,000.

Mr Zhulkarnain asked what measures are in place to ensure that the requirements are not circumvented. PSPM are subject to inspections to ensure compliance with our regulations. Appropriate actions are taken against contraventions of the PSPM Act.

To the question by Assoc Prof Razwana, since 2021, 96 enforcement actions have been taken against PSPM dealers for failure to comply with CDD and cash transaction reporting requirements.

A number of the suspects had purchased high-value assets such as luxury cars, bags, liquor and ornaments. These were among the assets that were seized or issued with a prohibition of disposal order. They are currently not regulated, unlike, for example, PSPMs.

In fact, Singapore's AML/CFT requirements comply with international standards set by FATF, which takes a risk-based approach targeting areas that have been assessed internationally to present higher money laundering risks.

We will examine if Singapore needs to extend anti-money laundering requirements to new classes of assets beyond what FATF has recommended. This has to be evaluated carefully so that we do not end up unduly inconveniencing legitimate businesses and customers.

The second prong of our AML regime is detection, of which a cornerstone is the STR regime.

Our laws make it a duty for everyone – including but not limited to landlords, property developers, financial institutions and corporate service providers – to report suspicious transactions.

Under section 45 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, or CDSA, all persons have a duty to inform STRO if the person knows or has reasonable grounds to suspect, through the course of his profession or business, that any property or transaction they are dealing with may be illicit.

There is no minimum threshold for STR filing. There are also sector-specific requirements to file STRs.

We take STR reporting obligations seriously. Failure to file an STR is an offence. We have taken and will take action against those who failed to file an STR when it was merited.

Several Members – Mr Dennis Tan, Ms Sylvia Lim, Mr Vikram Nair, Mr Wee, Ms Ng Ling Ling, Assoc Prof Razwana, Mr Derrick Goh – enquired about our STR regime. These queries centre around: (a) the extent to which STRs are filed; (b) whether information obtained from STRs is shared across Government agencies; as well as (c) whether any updates will be made to enhance the effectiveness of our STR regime.

Sir, Singapore handles massive volumes of transactions every day. The reality is that this sheer volume provides easy camouflage for illicit activities. Spotting a suspicious transaction among millions is challenging.

To improve effectiveness, STRO has worked with sectoral regulators to develop red flag indicators to improve the detection of money laundering activities by gatekeepers. The red flag indicators are regularly updated to take into account emerging risk types in the money laundering landscape.

STRO received an average of 43,000 STRs annually between 2020 and 2022. That is more than 150 every working day. Over 80% were filed by our financial institutions.

Intelligence received, whether from STRs, STRO's foreign counterparts, or other sources, is analysed thoroughly and extensively by STRO. If STRO assesses that the information is relevant, it will disseminate the information to relevant Government agencies which will then conduct further investigations.

All this work done by the STRO, sectoral regulators and Police is incredibly difficult. It is not just one needle in a haystack, but one needle in several haystacks. It is also not a static field, because determined money launderers are always finding new ways to hide their tracks and avoid detection. In Chinese, we say, 道高一尺，魔高一丈. Against this backdrop, it is remarkable that our officers were able to uncover this web and in a fairly short time.

STRO will, of course, continue to update its methods and help agencies better connect the dots. In February last year, STRO commissioned a new data analytics system to enhance its ability to process large volumes of STRs and raise the quality of financial intelligence disseminated to domestic law enforcement agencies.

But let us understand this is a never-ending challenge. With each new case, we will gain fresh insights and enhance our ability to detect the next one.

Third, enforcement. As Members would know, we take firm enforcement action against money laundering activities. From 2020 to 2022, at least 240 individuals were convicted of money laundering offences, largely for laundering domestic scam proceeds. In that same period, Police seized more than $1.2 billion worth of assets in money laundering investigations.

Mr Yip Hon Weng asked how many money laundering and forgery related cases involving S$500 million and above have been reported in the past three years. Mr Derrick Goh asked how we are deepening cooperation with foreign authorities to stem money laundering risks. Allow me to address these together.

Let me cite a case which involved working closely with foreign authorities to trace and interdict the illicit proceeds in Singapore.

In February 2021, the Police received information from our international partners and commenced investigations into a case of embezzlement of Angolan state funds that was alleged to have been laundered through foreign banks to Singapore. In the course of the investigations, Singapore Police Force (SPF) seized over S$750 million from several bank accounts in Singapore.

Another example of our cooperation with international counterparts. We rendered assistance to United Kingdom (UK) law enforcement agencies for the case involving former Formula One boss Bernie Ecclestone. The MAS, Singapore Police Force and AGC worked closely with the UK authorities on their investigation and prosecution of Ecclestone. Singapore had proactively shared relevant information with our UK counterparts, which helped them develop their case.

Domestic sectoral regulators have also taken to task entities which fell short of their legal obligations. For example, MAS has taken firm enforcement actions where financial institutions' controls had been unsatisfactory. In the past five years, 17 financial institutions had been taken to task for breaches of MAS' AML/CFT requirements.

Members – Ms Foo Mee Har, Assoc Prof Jamus Lim, Mr Patrick Tay, Mr Don Wee, Mr Alex Yam, Mr Leong Mun Wai – have filed questions relating to the entry and stay of foreign nationals in Singapore. Specifically, how do we scrutinise applications for work passes and other immigration facilities and how we step up checks on high-risk individuals, including those with criminal records or who are wanted in foreign jurisdictions, or who may have used false identities.

Let me first provide an update on the immigration status of the individuals under arrest.

To recap, 10 persons have been arrested and charged. They hold Employment Passes and Dependant's Passes. At the time of their applications, none of them were on INTERPOL's Red Notice. As I updated earlier, Police has been casting its net much wider than these 10.

Investigations are ongoing and many persons have been interviewed and more will be. They include Singaporeans, Permanent Residents (PRs) and those on different types of immigration passes. Anyone who is found complicit in the wrongdoing after ongoing investigations will be dealt with in accordance with the law, regardless of their immigration status, or whether they are Singapore Citizens (SCs).

We have frameworks in place for the assessment of applications for work passes and other long-term immigration facilities. The frameworks incorporate information from multiple sources and agencies. Applicants are screened against a database of blacklisted individuals. We use data analytics to identify and scrutinise higher-risk applications. Foreigners convicted of an offence in Singapore may be deported from Singapore and in some cases, banned permanently.

Mr Don Wee asked whether we work with foreign governments to verify the information provided by applicants. Where the agencies have suspicions, we do so. Our Singapore overseas missions also help to verify the authenticity of the documents. However, given the volume of applications, it is not possible to conduct verification checks for all of them.

Members will appreciate that no screening process is fool-proof. We will review how to tighten our verification checks at various points. At the same time, we should be sensible. Most people are not illegal money launderers or criminals. If we make the rules too tight, then it is the vast majority of innocent applicants who will be unnecessarily penalised. The crooks will still try to find a way around the rules.

So, we need rules, we need to apply them, but let us be careful about knee-jerk reactions, which may make our business environment unfriendly. What we need are rules which are internationally accepted and workable. Our task is to minimise the risks and increase our ability to catch these persons, without affecting the majority of proper, legal transactions.

Should there be further clarifications on the work pass application regime, my colleague, Minister Tan See Leng will address them later.

Sir, let me conclude. Singapore has in place a robust anti-money laundering regime. We are held in high regard internationally not just as a financial centre, but for our strong, principled and no-nonsense approach to taking down individuals who break our laws.

In its last evaluation of Singapore in 2016, the FATF assessed Singapore to have a strong legal and institutional framework against money laundering and terrorism financing. We achieved substantial results in several aspects, even as a few areas were identified for improvement.

We have moved since the evaluation to address these areas and to further strengthen our regime. We have updated our prevention frameworks to keep pace with the evolving risks and typologies of money laundering and strengthened our capabilities to proactively detect and take firm enforcement action.

Nevertheless, this case is a reminder that even the most stringent preventive measures can be circumvented by determined criminals. But it also shows that our system is able to detect suspicious individuals and activities and that when we do, we have the resolve and capabilities to track them down and take them to task.

Just as low crime does not mean no crime, zero tolerance of money laundering does not mean zero occurrence. This is not the first time Singapore has detected and acted against such money launderers, nor will it be the last.

As I mentioned, we have been undertaking ongoing reviews in the various sectors, to tighten our anti-money laundering regime. Learning from this case, we will consider further measures to strengthen our regime. Second Minister for Finance Indranee Rajah will be leading an Inter-Ministerial Committee (IMC) involving the relevant sectoral regulators. Later in her speech, she will outline its terms of reference and priorities.

Sir, this Police investigation has strengthened our reputation as a serious, high quality financial centre and for law and order. It will strengthen trust and confidence among investors and Singaporeans, that we run a clean system that stands among the tallest in the world.

With your permission, I will respond to any clarifications which Members may have, after my colleagues have made their statements.

Mr Speaker: Minister of State Alvin Tan and Minister Indranee Rajah will be making related Ministerial Statements. I will allow Members to raise points of clarification on three Statements after the third Statement is made. Ministerial Statement on behalf of the Deputy Prime Minister and Minister for Finance, Minister of State Alvin Tan.

1.41 pm

The Minister of State for Culture, Community and Youth and Trade and Industry (Mr Alvin Tan) (for the Deputy Prime Minister and Minister for Finance): Mr Speaker, Sir, as Minister Josephine Teo has mentioned, financial institutions play a critical gatekeeper role to keep criminals out of our financial system. Singapore is one of the world's leading financial centres and our financial institutions handle millions of transactions every single day. The vast majority of these are legitimate transactions that support the functioning of our economy and allow international trade and investments to be intermediated through Singapore.

The international connectedness, diversity and depth of our financial ecosystem also make us attractive to criminals, who will seek to exploit these very qualities to hide their tracks and launder their ill-gotten gains.

MAS is keenly aware of this risk. For decades now, MAS has been working together with our financial institutions to identify and disrupt such illicit activities.

This is MAS' priority. Singapore's hard-earned reputation as a trusted and well-governed international financial and trade hub with a strong rule of law, is at stake. Furthermore, it is the right thing to do.

Our dual objectives of building a dynamic, thriving financial centre on the one hand and maintaining a clean system on the other hand, are mutually reinforcing. We cannot and will not trade one against the other.

Minister Josephine Teo outlined the Government's three-pronged strategy to deal with money laundering risks. Let me describe how MAS applies this approach to bolster our financial sector's defences against money laundering and terrorism financing (ML/TF) risks.

The first prong of our strategy is prevention. MAS imposes strict AML/CFT requirements on financial institutions. These requirements are line with the standards set by FATF and international best practices.

Amongst these requirements, financial institutions must perform due diligence checks on their customers. This includes verifying their customers' identities and monitoring customer accounts to detect suspicious customer transactions or activities.

For higher risk customers, financial institutions must perform additional checks to establish if the customer's wealth and funds are legitimate. Where a financial institution detects suspicious customer behaviour, it must promptly report this to the STRO and then take appropriate mitigation measures, such as placing restrictions on the account or where warranted, terminating the customer relationship.

Beyond imposing requirements and expectations on financial institutions, MAS regularly alerts financial institutions to emerging risks and criminal typologies. MAS also publishes guidance papers and circulars to highlight good practices, to raise risk awareness and industry standards. MAS has also strongly encouraged our financial industry to deploy data analytics to further sharpen their detection capabilities.

These efforts have produced results. For example, financial institutions have improved their ability to pick up suspicious behaviour amongst their corporate customers and flag specific transactions, characteristics or even networks of concerns by filing STRs.

Ms Usha Chandradas asked about the anti-money laundering checks conducted on single family offices (SFOs) before tax incentives are granted and whether such incentives have been granted to any of the entities associated with this case. Please allow me to explain.

All SFOs applying for MAS' tax incentives are required to show proof that they have opened accounts with financial institutions in Singapore. Before onboarding the SFOs as customers, MAS expects financial institutions to conduct robust due diligence checks on them. In addition, before granting these tax incentives, MAS screens the individuals and entities involved in the SFO against databases and other information sources for money laundering, terrorism financing and other adverse news.

Ongoing investigations and supervisory engagements suggest that one or more of the accused persons in this case may have been linked to SFOs that were awarded tax incentives. These SFOs were subject to the checks I just outlined. At the point of application, no adverse information of note related to the individuals and entities had surfaced. Nonetheless, MAS is reviewing our internal incentive administration processes and will tighten them where necessary.

More broadly and even before this case, MAS had already in July 2023 announced plans to strengthen its surveillance and defence against potential money laundering risks posed by SFOs. The consultation, which just closed last Saturday, 30 September, proposed specific requirements to ensure that all SFOs, regardless of whether they apply for tax incentives, are subject to strict anti-money laundering controls. For example, SFOs will have to maintain a business relationship with an MAS-regulated financial institution, which will perform anti-money laundering checks on them. The proposed enhancements consulted on go beyond most other leading jurisdictions and financial centres. They aim to ensure that we have quality SFOs that contribute to Singapore and that we keenly watch any ML or terrorist financing risks. Arising from the findings from this case, MAS will also study whether further measures beyond those that have been proposed in the consultation are necessary, to ensure our approach to SFOs remains robust.

The second prong of our strategy is detection. This involves partnering financial institutions and other agencies to detect bad actors and also tighten our collective defences. The efforts of individual financial institutions or even individual Government agencies are not enough on their own. Criminals layer their nefarious activities across multiple financial institutions and other parties to evade detection. Let me elaborate on the partnerships we already have in place to thwart these illicit activities.

As Minister Teo mentioned earlier, the ACIP is one key platform through which we collaborate with the financial industry. These efforts, too, have borne fruit, for example, with the conviction of the former Chief Financial Officer of Agritrade International for her role in deceiving financial institutions to grant at least S$776 million in credit facilities. On 17 January 2023, she was sentenced to an imprisonment term of 20 years.

To strengthen our detection capabilities, we are introducing COSMIC, which stands for "Collaborative Sharing of ML/TF information and Cases". COSMIC will augment ACIP's efforts. I spoke about COSMIC in this House in May this year but will reiterate to refresh Members' memories.

COSMIC is a digital platform which MAS is co-developing with six major banks in Singapore. It will allow participant financial institutions to share with one another information on customers whose profile or behaviour exhibits potential financial crime concerns, which they currently cannot, due to customer confidentiality obligations. The Bill we passed will allow participating financial institutions to share such information through COSMIC. One of the key risks COSMIC will target is the misuse of corporate or other legal vehicles to obscure the nature of transactions or the ownership of assets. This is a typology used by the suspects in this case. With COSMIC, financial institutions and authorities should be able to detect such risks more promptly.

Assoc Prof Razwana Begum Abdul Rahim, Miss Rachel Ong and Mr Derrick Goh asked if MAS can consider expanding participation in COSMIC beyond financial institutions to include additional parties, as well as whether we can expedite the launch of COSMIC.

I am pleased to note that we are now working really expeditiously on COSMIC and are on track to launch it in the second half of 2024, if not earlier. MAS will permit participant financial institutions to share information they receive from COSMIC with their local as well as overseas affiliates, provided certain conditions to ensure confidentiality are met. This will prevent bad actors from establishing relationships with overseas affiliates of the six banks.

Because of the sensitivity of the information that can be shared on COSMIC, MAS is proceeding carefully with its roll-out. At this stage, there are no plans to extend COSMIC to entities beyond the financial sector, or for COSMIC information to be shared directly with financial institutions overseas or with international counterparts. Nevertheless, MAS will review information from COSMIC as part of our overall surveillance efforts and distil key information for sharing with relevant Government agencies and international supervisory counterparts, to combat risks that cut across sectors and borders.

Besides upcoming platforms like COSMIC and ongoing partnerships between the public and private sectors and amongst financial institutions, there is also robust collaboration across Government agencies. For instance, MAS and MHA co-chair the Risk and Typologies Group (RTIG). RTIG is an interagency body overseeing the identification, assessment and mitigation of money laundering and terrorism financing risks. It involves all relevant supervisory and law enforcement agencies and the STRO. RTIG allows agencies to share information on surveillance outputs, such as networks and subjects of concern, for collective action.

These efforts to raise awareness, sharpen detection and tighten collaboration across the industry and Government have borne fruit. As Minister Teo mentioned, over 80% of STRs filed between 2020 and 2022 were filed by financial institutions. The quality of these STRs has improved over time, as STRO and MAS gave guidance and feedback to the financial institutions. This has facilitated more timely responses to illicit activities.

This case is a prime example of how this effort has made a difference. financial institutions detected many of these illicit activities, filing numerous STRs on the persons of interest prior to the case breaking publicly. These STRs helped law enforcement agencies to identify and take enforcement action against these individuals. In many instances, the financial institutions took additional precautions and actions, including closing these individuals' accounts.

Through RTIG, law enforcement and supervisory agencies were also alerted to similar criminal typologies. In April 2022, MAS issued a circular to warn financial institutions of these emerging typologies and engaged major financial institutions to tighten their controls.

We saw how this close and effective cooperation made an impact on the case as the Police commenced its operations. For example, MAS worked closely with our financial institutions to rapidly identify tainted funds so that the Police could seize these funds swiftly. This prevented the suspects from dissipating their ill-gotten gains.

Some of the funds in this case were seized very shortly before there were attempts to move them, because of this close cooperation. Our financial institutions also responded promptly to Police orders to produce information, which helped Police build their case against these subjects.

Mr Desmond Choo asked how surveillance and international partnerships between MAS and other regulators have helped to disrupt money laundering activities and syndicates. As money laundering networks frequently operate across borders, international cooperation is critical to combating them. MAS actively works with our international supervisory counterparts on common areas of concern, such as the 1MDB and Wirecard cases.

The third thrust of our approach, or the third prong of our approach, is enforcement. This complements the first two prongs of prevention and detection. Where there are breaches of MAS' requirements, MAS takes firm enforcement action against financial institutions as well as key financial institution staff. MAS has done so before. In the 1MDB case, we imposed significant penalties for AML/CFT violations, permanently banned some individuals and senior management from working in Singapore's financial sector, and even closed down two banks for egregious AML/CFT breaches. We will not hesitate to take firm enforcement action against errant financial institutions and their key staff, should we encounter similar material weaknesses.

I have explained, with examples, how the three key prongs – Prevention, Detection and Enforcement – in MAS' strategy that underpin our financial sectors' defences against money laundering and terrorism financing risks have made an impact, including how they have led to the detection of many of these bad actors.

But we cannot be satisfied with these efforts alone. We must and we will do more. The fact that more than $1.45 billion in financial assets have been so far seized in relation to this case is concerning. MAS is conducting detailed supervisory reviews and inspections of the financial institutions with a major nexus to this case.

MAS will also take a critical look at how the suspects were able to access financial services in Singapore. Some of them have been charged for presenting forged documents to financial institutions. MAS will assess whether financial institutions had upheld robust AML/CFT practices, including performing adequate checks on their customers' sources of wealth and funds, monitoring customer transactions to pick out suspicious ones and taking all reasonable steps to mitigate against money laundering and terrorism financing risks. This will complement and feed into the work of the Inter-Ministry Taskforce to be led by Minister Indranee, which MAS will also be a part of.

Finally, Mr Speaker, Sir, Ms Foo Mee Har asked an important question about how this case has affected Singapore's reputation as a leading wealth management hub. Indeed, there had been some speculation that this money laundering operation has hurt our standing as an international financial centre. On the contrary, I would say that this case is clear evidence of our unflinching commitment to keep Singapore clean. While criminals will vary their tactics to conceal their illicit activities, we will deploy all the resources and powers at our disposal to thwart them, bring them to justice and continually strengthen our defences against them.

Sir, I believe that our approach to this case will, in fact, enhance Singapore's global standing as a trusted financial centre with a strong rule of law and that we will continue to keep the trust and confidence that Singaporeans and investors have in us.

Let me now pass the floor to Minister Indranee.

Mr Speaker: Second Minister for Finance and National Development.

1.59 pm

The Minister, Prime Minister's Office and Second Minister for Finance and National Development (Ms Indranee Rajah): Mr Speaker, Sir. My colleagues, Minister Josephine Teo and Minister of State Alvin Tan, have spoken about the case, our overall AML regime and the measures we have in place, including in the financial sector. I will elaborate on two further areas: the real estate sector and companies. The regimes in these areas closely align with our whole-of-Government three-pronged strategy outlined by Minister Teo earlier.

My Statement will be in three parts: first, our restrictions on the foreign ownership of landed residential properties and our controls against money laundering in the real estate sector; second, our regulatory and enforcement measures to deter the misuse of companies; and third, how we will further strengthen our system, incorporating the lessons that we have learnt.

Let me first set the context by providing an update on the properties involved in the case. To date, 94 residential properties have been issued with prohibition orders. Of these, 60 are completed resale units and 34 were uncompleted units sold directly by developers. Eight of these properties were landed residential properties at Sentosa Cove. In addition, 53 commercial properties and five industrial properties have been issued with prohibition orders.

With this in mind, let me explain the framework governing purchases of residential property in Singapore by foreigners.

First and foremost, foreign ownership of landed residential properties is restricted under the Residential Property Act, or the RPA. Landed residential properties in Singapore remain primarily the preserve of Singapore Citizens. Foreigners are not allowed to buy or own landed residential properties without approval. If approval is given, approved foreign purchasers are only allowed to own one landed residential property in Singapore for their own occupation.

Ms He Ting Ru asked about the grant of approvals. There are two categories of landed residential property in respect of which approvals can be granted: landed residential properties on mainland Singapore and landed residential property developed with a view to allowing foreign ownership. The latter is a very small category, that is, the landed residential properties developed in Sentosa Cove.

The Government takes a very strict approach when granting approvals for foreigners to own landed residential properties in Singapore mainland.

Under this regime, applicants must be a Singapore PR for at least five years and must have made exceptional economic contribution to Singapore. This is assessed considering factors like income tax contributions to Singapore.

We also consider whether applicants have a strong Singapore nexus. For example, PRs with children who have served National Service and who have demonstrated strong commitment to Singapore.

These factors point towards an applicant's connection to Singapore and their long-term commitment and contribution to Singapore.

The number of approvals granted to foreigners to acquire landed residential properties in Singapore mainland under the RPA remains low. In 2020, 2021 and 2022, 24, 51 and 34 approvals were granted in each year respectively to PRs to own landed residential property on Singapore mainland. This should be seen in contrast with our total landed housing stock of more than 73,000 properties and average annual transaction volume of more than 2,700 landed properties on Singapore mainland over the same period.

For the second category of landed residential property, which are those in Sentosa Cove, some of the restrictions are lifted to allow foreigners to buy them. Sentosa Cove was developed as a unique world-class integrated waterfront development aimed at an international clientele. Hence, foreigners who are non-PRs may acquire landed residential properties in Sentosa Cove and approvals are generally granted.

Mr Neil Parekh Nimil Rajnikant asked about the applications and approval numbers for Sentosa Cove. In the past three years, the Singapore Land Authority (SLA) had received a total of 88 applications from foreigners to purchase landed properties in Sentosa Cove. All but two have been approved.

Since we have set aside landed residential properties primarily for Singaporeans, we do not restrict foreign ownership for non-landed residential properties in Singapore. That said, we impose a higher Additional Buyer's Stamp Duty on any residential property purchase by a foreigner. In April 2023, this was raised from 30% to 60% as part of preemptive measures to dampen local and foreign investment and prioritise Singaporean owner-occupation. Today, the proportion of foreign property purchases is low, at about 2%.

To reiterate, the eight landed residential properties issued with the prohibition of disposal orders are all at Sentosa Cove, where some RPA restrictions are lifted. None are landed residential properties on the mainland, where the approval criteria are much stricter. The rest are non-landed units, which can be purchased by foreigners. Hence, the requirements of the RPA had been met.

To answer the question filed by Mr Saktiandi Supaat on the impact on the market, while it is difficult to pinpoint the exact effect of the transactions involved in the case on the property market, their impact on property prices is likely to have been minimal. They make up an insignificant share of residential, commercial and industrial transactions.

Next, Members have asked about anti-money laundering safeguards in the real estate sector. Mr Yip Hon Weng, Mr Gerald Giam and Ms Hany Soh asked about CDD checks that property agents need to perform and the measures in place to train them.

These are valid questions as money laundering is often carried out through asset acquisition and real estate is a valuable and attractive asset class. We know that there are higher risks of money laundering in the real estate sector and so, we have been working over the years to address this.

We have put in place a risk management framework guided by the recommendations made by the FATF. Our framework leverages key sectoral players as DNFBPs with the obligation to look out for red flags and report suspicious transactions to the Police. This complements other DNFBP professionals involved in real estate transactions.

The obligations apply to landed and non-landed residential properties as well as commercial and industrial properties.

In the real estate sector, our gatekeepers are: (a) property agents, (b) property agencies; and (c) developers. They are the first line of defence as they are the ones who generally come into contact with parties undertaking real estate transactions. They therefore play an important role in the "prevention" and "detection" of money laundering activities in property transactions – the first two prongs of our AML strategy.

We have progressively strengthened our regime, including enacting various legislation on the AML requirements of our gatekeepers.

While there had been practice guidelines in place prior, in 2021, we legislated the prescribed duties of property agents with the introduction of the Estate Agents (Prevention of Money Laundering and Financing of Terrorism) Regulations.

In 2023, we introduced changes to the Housing Developers (Control and Licensing) Act, or HDCLA, and the Sale of Commercial Properties Act, or SCPA, to also extend AML requirements to developers of residential, commercial and industrial properties.

As gatekeepers, each property agent, agency and developer has a duty to perform CDD on their clients or customers. This includes verifying the identity of the client or the beneficial owner, screening these parties and assessing their level of risk, for example, identifying foreign politically exposed persons (PEPs), persons from countries or jurisdictions identified by FATF as higher risk, and maintaining records of the relevant documents.

Sir, let me give some examples. If the customer purports to act on behalf of another party, the gatekeepers must request for the relevant documents authorising such representation.

For entities who intend to purchase, the gatekeepers must also check on the nature of its business, ownership and control structure, and place of incorporation. For purchasers from countries where there is a higher risk of money laundering, they are further required to verify their income and the source of their wealth and funds.

The degree of checks required is commensurate with the assessed level of risk, for example, enhanced CDD is required for higher-risk transactions. This includes verifying the income level, source of wealth or funds of the purchaser.

Given the nature of property development, developers are also required to periodically review the information about purchasers that had been furnished to ensure that it remains accurate and updated until the completion of the property.

Internally, property agencies and developers are also required to implement policies, procedures and controls such as internal audits to prevent money laundering activities.

Finally, as part of the detection prong of our AML strategy, every property agent, agency and developer is required to file an STR through their respective agencies if in the course of their business or profession, they know or have reasonable grounds to suspect that any property may be connected to criminal conduct. Failure to do so may result in regulatory action.

Relatedly, Assoc Prof Jamus Lim asked about guidelines on cash payments. For uncompleted property sales, developers are not allowed to accept payment in cash.

In general, quantitative thresholds may not be useful as there are many indicators that could point to money laundering activities and any line drawn would be arbitrary. Each case should be considered holistically. This is why we look to industry practitioners, who know how the market works and are in contact with the buyers and sellers, to make a judgment based on their experience while we provide guidance on what they should look out for.

Under the third prong of our AML strategy, which is enforcement, our sectoral regulators play an important role in ensuring that gatekeepers carry out their responsibilities properly.

In the real estate sector, the Council for Estate Agencies (CEA) is the regulator which oversees the property agents and agencies while the Urban Redevelopment Authority (URA) regulates the developers. CEA has made considerable effort to help property agents and agencies carry out their responsibilities.

First, to educate the industry, CEA has issued a guide to property agents and agencies on compliance with anti-money laundering regulations. It provides details on the checks to be conducted and the measures that need to be put in place, including checklists to guide agents and agencies in fulfilling their CDD obligations.

Second, CEA provides a list of common suspicious indicators to aid agents and agencies in identifying suspicious transactions. These include: buying multiple properties within a short time; purchasing properties without inspecting them; and entering into transactions at a value much higher or lower than market value.

Third, CEA regularly shares latest developments and responses to common queries by property agents and agencies relating to their anti-money laundering duties. CEA is also developing a one-stop resource webpage to make it easier for the industry to retrieve information on anti-money laundering requirements.

Fourth, property agents who require additional training on their anti-money laundering duties may take up the continuing professional development course provided by CEA's course providers. Like CEA, URA regularly conducts briefings and has been issuing circulars to guide developers in their duties, even before the legislation had been passed earlier this year.

As part of ensuring compliance, CEA and URA conduct AML-related inspections regularly. Property agents, agencies, and developers that are identified to be of higher risk are prioritised for inspections and subject to more regular inspections. For example, those who deal more in private housing, especially higher-end projects, could be considered higher risk.

CEA and URA also conduct ad hoc inspections based on feedback from law enforcement agencies on possible infringements by property agents, agencies, and developers.

We would also like to point out that besides the developers, property agencies and agents, professionals such as conveyancing lawyers, accountants and financial institutions, who similarly have anti-money laundering obligations, are also involved in nearly all property transactions.

As highlighted by Minister Josephine, lawyers and accountants also have strict Know Your Client and anti-money laundering obligations. Conveyancing lawyers and the relevant accountants are required to perform CDD when preparing for or carrying out any acquisition, divestment or any other dealing of any interest in real estate.

These professionals are also required to file an STR with the STRO, if in the course of their business or profession, these professionals know or have reasonable grounds to suspect that any property may be connected to criminal conduct.

Apart from these legal obligations, lawyers and accountants who are mindful of their professional reputations and risk exposure would and should decline to act for the potential client in the suspicious transactions.

Assoc Prof Jamus Lim asked whether there are differences between financial institutions and property agents in implementing AML measures. In general, while the underlying principles are the same, the AML measures required must be tailored to address risks unique to the sector and the party involved.

Principally, as my colleagues have emphasised, our regime is a comprehensive one. Any person who knows or has reasonable grounds to suspect that any property represents the proceeds of or is connected with criminal conduct, is required to file an STR to the Police. To answer Mr Murali Pillai's question, this includes landlords, if they have reasonable grounds to suspect their tenants. Failure to file such STRs as soon as reasonably practicable is an offence.

In sum, in the real estate sector, there are several layers of defence to mitigate risks of money-laundering and protect the system from abuse. The gatekeepers cover different areas, but play complementary roles in strengthening prevention and detection in our regime.

As such, the vast majority of purchase and sale transactions are subject to CDD checks, in some form and at various stages. In fact, most of them are subject to more than one layer of checks.

If any of the gatekeepers fall short of their duties or do not carry out their obligations, they will be subject to penalties. Enforcement is taken by CEA and URA, our sectoral regulators who also work hard to guide our gatekeepers in their responsibilities.

Investigations are ongoing into the property agencies and agents who had facilitated transactions for the properties involved in the money laundering probe. We will fully investigate the incident and if any breaches are found, take the necessary regulatory action.

Next, let me address Members' questions on the Government's efforts to detect illicit activities conducted by or through companies incorporated in Singapore.

Our regulatory regime seeks to balance between maintaining the ease of doing business, which has been the hallmark of Singapore as a business and financial hub and ensuring strong corporate governance to uphold investors' confidence.

Today, the Accounting and Corporate Regulatory Authority (ACRA) has in place various measures to deter the misuse of companies for money-laundering. In response to Members' questions, let me first describe the baseline framework that ACRA has in place, before I explain the additional measures that are in place for intermediaries such as Registered Filing Agents, which similarly follow the spirit of prevention, detection and enforcement.

When a company is incorporated, ACRA screens all the officers and shareholders in its registers against lists of known adverse information. As and when there are changes to the directorships, companies will need to update ACRA accordingly and the new additions will be screened.

In addition, all companies are required to have at least one director resident in Singapore, to ensure that we will be able to hold someone accountable for any breaches committed by the company in Singapore. This goes beyond the requirements of many other jurisdictions. Non-resident foreigners looking to set up companies in Singapore will therefore need to either appoint a resident business partner as a director, or appoint a nominee director to act on their behalf. I will elaborate on this later.

Post-incorporation, ACRA monitors companies and takes proactive enforcement measures to guard against their potential misuse.

Mr Saktiandi Supaat asked about the prevalence of non-trading or inactive companies and how ACRA addresses the issue. Let me first clarify that just because a company is non-trading or inactive, it does not necessarily mean that they are being misused for money laundering purposes. There are various reasons why an owner may choose to keep his company despite not actively operating it, for example, due to other business priorities, illness or other challenges.

A clear sign of inactivity is when a company fails to file its annual returns. As companies could be inactive due to legitimate reasons, ACRA does not take action immediately. Instead, ACRA continues to track such companies and if they remain inactive after a period or are flagged via intelligence provided by other agencies, ACRA will proceed to strike them off. About 17,000 such companies have been struck off over the last five years.

Thus far, the companies associated with this case have largely been filing annual returns with ACRA and have thus remained on the register.

I should clarify, however, that not all companies that are being misused for money laundering are inactive or dormant firms. Criminals often use front companies with a portfolio of businesses, comprising a mix of legitimate and illicit activities. This makes it challenging for regulators to identify the true nature of companies, unless active investigations of the company's activities are undertaken.

The checks that I have mentioned apply to all companies in Singapore.

Let me now touch on aspects of ACRA's regulatory regime, that seek to mitigate specific areas of higher risk, as part of our overall prevention efforts.

The first relates to the role that Registered Filing Agents (RFAs) play in mitigating the risks posed by foreign-owned companies.

As a business hub, we attract many foreign companies to Singapore. By and large, they are bona fide, and we welcome them because they contribute to our economy and provide good jobs for our locals. However, we recognise that there could be some bad actors, who may take advantage of Singapore's pro-business environment and open financial markets to conduct illicit activities.

So, as part of our prevention efforts, we therefore impose additional requirements on foreign-owned or foreign-controlled companies. Non-residents who are looking to set up companies in Singapore must engage ACRA-authorised corporate service providers, also known as RFAs, to incorporate a company. RFAs provide another layer of scrutiny, which is particularly useful for foreign-owned or controlled companies, in addition to ACRA's pre-incorporation checks.

The RFAs are legally required to: one, conduct customer due diligence, by identifying and verifying the identities of the customer and the beneficial owners of the intended incorporated company; two, conduct enhanced customer due diligence to compensate for the higher risk if the customer is not physically present, such as ensuring that the customer's identity is established by additional documents or information, and three, inquire into the purpose and legitimacy of the use of a company structure.

Next, detection. If the RFA fails to complete the due diligence measures, it must not proceed with the intended incorporation transaction and should file an STR. RFAs should also file STRs if they encounter any suspicious transactions in the course of their work. This helps to alert authorities of risks surrounding specific companies.

Then enforcement. RFAs play an important role as gatekeepers in reducing the likelihood of a Singapore entity being incorporated and subsequently misused for money laundering. They are subject to supervision by ACRA for compliance with AML/CFT obligations.

ACRA takes enforcement actions on RFAs found to have breached any requirement. Between 2021 and 2023, ACRA imposed 24 sanctions against RFAs, including eight cases where the RFA's registration was cancelled or suspended. ACRA is investigating the role played by the RFAs involved in this case, and will take enforcement action if necessary. [Please refer to "Clarification by Minister, Prime Minister's Office and Second Minister for Finance and National Development", Official Report, 3 October 2023, Vol 95, Issue 113, Correction By Written Statement section.]

ACRA has planned additional measures such as enhancing the penalties on errant service providers, to strengthen the effectiveness of our anti-money laundering regime. The proposals had undergone public consultation earlier and we are looking to table them in Parliament in early 2024.

The second area relates to directorships. Because of Singapore's requirement for companies to appoint at least one ordinarily resident director, foreigners based overseas often look for local nominee directors to act on their behalf on matters relating to their company.

To address this need, corporate service providers provide services for nominee directors to be appointed, among other services. As some individuals take on nominee directorships as a business service, it is understandable for them to hold multiple directorships, to support their clients in due diligence checks and incorporating their business. Nominee directors have the same legal obligations as other directors and are required to discharge their duties responsibly, with honesty and reasonable diligence. Those who fail to do so can face sanctions, including disqualification and debarment.

Mr Melvin Yong asked about the number of individuals who have held a large number of directorships. In line with international benchmarks like the United Kingdom, United States and Australia, there are currently no limits to the number of companies that a director can be involved in. Having said that, 99% of directors hold fewer than 10 directorships.

ACRA has been studying restrictions on directorships, both to ensure that nominee directors are fit and proper to take up the role and whether it would be useful to limit the number of nominee directorships that one can hold. These proposals were put out for public consultation in 2022. We will take into account risk factors and business needs, in deciding whether to introduce additional measures. These proposals will also be tabled in Parliament early next year.

A third area, which Mr Don Wee asked about, is to address the cloaking of the ownership of companies and the identity of money launderers through the use of complex corporate structures, by requiring companies to identify their beneficial owners and file this information with ACRA. ACRA manages a central register of controllers, which sets out the beneficial owners of companies, that is, the individuals who ultimately own or control a company.

This data on beneficial ownership is crucial in combating money laundering and foiling the plans of criminals. It aids law enforcement agencies in their investigations, by enabling them to peel back the different layers, identify the criminals behind the companies that are used for illicit activities and bring them to task.

To maintain its data quality, ACRA conducts regular inspections to ensure that companies file their beneficial ownership information in a timely manner. Enforcement action is taken on those who fail to comply.

Sir, I have outlined the various measures that ACRA has in place to prevent the misuse of corporate structures, whether directly relating to companies or through the regulation of RFAs and the requirements for nominee directors for foreign-owned or controlled companies.

As part of its detection efforts, ACRA utilises data analytics to identify individuals who may be nominee directors of high-risk companies that are potentially being misused, as well as RFAs who might be involved in the setup of such companies.

In addition, as Minister Teo mentioned earlier, as a sectoral regulator, ACRA works closely with STRO and law enforcement agencies, and flags high-risk individuals to them regularly for more in-depth review.

ACRA also undertakes checks and takes action with the help of intelligence received from other agencies, such as the Commercial Affairs Department (CAD).

Should ACRA or CAD's investigations uncover any wrongdoing, ACRA will take action to impose sanctions on the RFA, which could include cancellation or suspension, and against the company and its directors.

Notwithstanding all these efforts from various agencies, our anti-money laundering efforts are an unending endeavour. As this case has shown, criminals are becoming increasingly sophisticated. Even as we identify new areas to tighten, criminals will inevitably find new loopholes to exploit.

As criminals will constantly find new ways to circumvent our laws and regulations, Government agencies and relevant industry players must become ever more coordinated to successfully uncover and arrest money laundering. To this end, we must strengthen our information-gathering and intel-sharing capabilities so that we can better detect illicit activities conducted by companies incorporated in Singapore.

To ensure that our AML regime remains robust, the inter-agency steering committee will continue to oversee the whole-of-Government anti-money laundering efforts. In addition, we will be setting up an IMC comprising political office holders from MAS, MHA, the Ministry of Law (MinLaw), the Ministry of Manpower (MOM) and the Ministry of Trade and Industry (MTI) and chaired by myself to review our system with the benefit of what we are learning from this case and to keep our regime up-to-date with increasingly sophisticated crimes.

The review will focus on four main areas: first, on how we can better prevent corporate structures from being abused by money launderers; second, how financial institutions can enhance their controls and collaborate more effectively with each other and authorities to guard against and flag suspicious transactions; third, how other players in the system, like corporate service providers, real estate agents and precious stones and metals dealers can help to better guard against money laundering risks; and fourth, how we can centralise and strengthen monitoring and sense-making capabilities across Government agencies to better detect suspicious activities.

Where gaps are identified, we will tighten our regulations and enforcement to prevent exploitation by criminals. The Committee will share its progress and findings in due time.

Singapore is determined to preserve our hard-earned reputation as a clean and trusted business hub. We will continue to uphold our zero-tolerance approach towards money laundering and do our best to ensure a strong and robust regulatory regime.

Mr Speaker, Sir, I have come to the end of my Statement. Members will naturally have clarifications. May I suggest that the House seek clarifications in five segments: the first segment to be on our overall anti-money laundering regime; the second segment to be on our financial system and sector; the third segment to be on our real estate sector; the fourth segment to be on companies and work or immigration passes; and the fifth segment on other clarifications.

Should the queries be sufficiently addressed, it may not be necessary for Members to pose identical Parliamentary Questions (PQs) for the future Sittings.

Mr Speaker: I know there is a lot of interest in this subject which is why 30 Members have filed a total of 57 PQs for the last Sitting and this Sitting. I will make sure that everyone who have filed PQs will be given an opportunity to seek clarifications. But before I call on Members for clarifications, I wish to point out two Standing Orders to guide Members and to facilitate discussions on the Ministerial Statements.

Firstly, pursuant to Standing Order 23, Members may seek clarification on the Ministerial Statements on Singapore's anti-money laundering regime, but there is no debate that should be allowed thereon.

Members can seek clarifications by way of asking questions. So, I seek Members' understanding to keep your clarifications clear and concise so that Ministers can answer as many clarifications as possible. Likewise, I would also ask the Ministers to also keep your answers clear and concise.

Secondly, pursuant to Standing Order 50(2), reference should not be made to any matter which is sub judice. I would like to advise Members to exercise caution in discussing or reflecting the details of the cases before the Courts as it could be sub judice or prejudice the investigations and interests of the parties to the matters.

I will ask the Clerks to help me spot all the hands. But I will call on Mr Murali Pillai first.

2.36 pm

Mr Murali Pillai (Bukit Batok): Mr Speaker, my colleagues in the Government Parliamentary Committee (GPC) for Home Affairs and Law and I have been closely scrutinising this case and would like to commend the officers of the Police Force, particularly the CAD for detecting this case and successfully executing an extensive operation that led to the seizure of more than S$2.8 billion worth of assets to-date.

Practitioners in the area often refer to assets from ill-gotten gains as "oxygen" for the criminals. Seizing and confiscating such high value assets in one fell swoop is tantamount to depriving criminals of "oxygen", thereby decisively crippling their activities constitutes, in my view, the best deterrent against anti-money laundering activities in Singapore. I invite hon Members in this House to join me to congratulate the Police Force for a job well-done. [Applause.]

Mr Speaker, Sir, I have a clarification for the hon Second Minister for Home Affairs. In her speech, she referred to the FATF as setting the global AML standards and that Singapore, as a member, subscribes to these standards. I understand that the FATF has conducted mutual evaluation of Singapore's AML standards to gauge compliance with its 40 recommendations to tackle illicit financial flaws. How have we fared in these mutual evaluations as far as the abilities and the enforcement records of our enforcement agencies are concerned and how do we compare to the abilities of enforcement agencies in other major financial centres, such as in London or New York?

Mrs Josephine Teo: Mr Speaker, I would also like to thank Members as well as Mr Murali Pillai for their affirmation of the work done by our law enforcement agencies.

Sir, I would like to keep my response to Mr Murali Pillai quite brief. But understandably, all the work that goes into our AML regime is quite involved. So, with your permission, Sir, may I ask the Clerks to distribute a handout which describes more fully the different aspects of our anti money-laundering regime?

Mr Speaker: Okay. Please proceed to give out the handout. [A handout was distributed to hon Members. Please refer to Annex 1.]

Mrs Josephine Teo: Thank you, Sir. Members may also access the handout through the MP@SGPARL app. Whilst the materials are making their way to the Members, Mr Murali Pillai, in his question, referred to FATF and the mutual evaluations that are being conducted by FATF.

By way of background, for Members' information, Singapore has been a member of FATF since 1992. And FATF, as an international organisation that sets standards for the prevention of money laundering, is well-recognised for several things.

For one thing, the standards that FATF has set are adopted by the International Monetary Fund (IMF) and the World Bank. So, as far as the IMF and the World Bank are concerned, FATF's standards are gold standards. If you are a serious financial centre and you meet those standards, then, in a sense, you have passed the test.

But how does one get evaluated against the standards? So, what Mr Murali referred to are mutual evaluations. And who does the mutual evaluation? These are experts that are drawn from within FATF itself as an organisation as well as a global network of expert practitioners. So, individuals like that are held in high regard. What they say carry weight.

Because this is a very involved exercise to carry out a mutual evaluation, countries do not get to be audited so regularly. We were last audited through this mutual evaluation in 2016. We have joined the queue. The next time we go through mutual evaluation is, in fact, in 2025.

But what was said after the evaluation in 2016? I quote from the FATF report and it says, "Singapore has a strong legal and institutional framework to fight money laundering and terrorist financing. Singapore's AML/CFT coordination is highly sophisticated and inclusive of all relevant competent authorities." It says that we are highly sophisticated and inclusive of all relevant competent authorities.

Mr Murali's question is: how does it put us in comparison to other jurisdictions? It puts us in good standing when compared to leading jurisdictions like Australia.

But because the evaluations are done at different times, it is not possible to treat this as an apple for apple comparison. What we do have, if you refer to the handout, under Annex A, I think there is a Table 1 which provides the ratings that Singapore was awarded in eight outcome areas that were relevant to money laundering. We have also, in table 1, reflected the ratings that were awarded to other leading jurisdictions who were evaluated around the same time as Singapore. So, that gives Members a sense.

It does not mean after the evaluation, we sit still, we are happy with what we have gotten. In all that seven years that have since passed, we have made significant progress in enhancing our AML regime. For example, we have strengthened the regime for non-financial sectors. What I talked about earlier, DNFBPs, that would fall under one category.

We have also enhanced the pursuit of cross-border money laundering offences and confiscation of proceeds of crime by all law enforcement agencies, including through international cooperation. And this ongoing case is an excellent example of our efforts.

But apart from what FATF says, I would like to draw Members' attention to another index that is known as the Basel Anti-Money Laundering Index. And the latest Index was tabulated in 2022. I am afraid I have not been able to include it in the handout. But there were 128 regions that were ranked in the Basel Anti-Money Laundering Index. And if you are at 128, that is the lowest risk. But lowest risk can also mean that nothing is happening in your region. So, you may not be a financial centre of any scale.

So, I do not think it is possible for Singapore to aim to be number 128. It would mean that we do not really have a financial centre of international importance. Singapore was ranked 100 out of 128, amongst those that are considered to be lowest risk. This ranking puts us ahead of the US, Switzerland as well as financial hubs, such as Hong Kong and Dubai. So, I think the facts do speak for themselves.

Mr Speaker: Following up from where Second Minister for Finance had suggested, I would ask Members, for this first set of clarifications, if they could centre around clarifications on the anti-money laundering system.

Let me repeat. So, that is the first segment we will try to cover. And then, we will move to the financial system and sector. And then, we will move on to real estate. And then, we will move on to companies, immigration and work passes. And finally, the last one is an open category.

So, for the first series of clarification, let us try to centre it around the anti-money laundering system. Mr Raj Joshua Thomas.

Mr Raj Joshua Thomas (Nominated Member): Thank you, Sir, and I thank the Ministers for setting out in the Ministerial Statement the AML/CFT measures.

I would like to ask if the Ministers could shed some light on how it is that despite what appears to be a very comprehensive set of measures which have been ranked well internationally that such huge amounts of money were still able to enter into our financial system? How is it that these monies could also be spent in various types of transactions?

Secondly, related to my earlier question, I would like to ask also whether there was any indication of complicity on the part of our Singapore-regulated banks and/or their employees in facilitating transactions carried out by the accused persons.

Mrs Josephine Teo: Mr Speaker, I thank the Member for his questions.

I explained during my Statement that when we set up our strategies for prevention of money laundering, we must understand that it is not all about prevention only.

We must know from the outset that however stringent the measures we put in place, criminal actors, money launderers, will find ways and means to still take advantage of our openness and our solid reputation as a sound financial centre. It is precisely because of our openness and precisely because we are deemed to have a very high reputation that the money launderers find us just as attractive as the legitimate investors.

So, we must know that they are resolved, they are determined to try and circumvent the rules that we have put in place.

Therefore, the strategy must also include detection and enforcement. If we merely had prevention and then imagine that all is well and good, we are kidding no one else but ourselves. And, so, it is useful for us to remember if we do not detect any cases at all and, more importantly, if we are not able to mount a robust response by way of enforcement and taking these criminals to task, it does not necessarily speak better of the robustness of our anti-money laundering regime.

In this particular instance, we have uncovered a very large web. I do not mean to cast aspersions on other regimes. But the examples that I cited shows you how difficult it is to round up criminals. Some of the amounts that I cited, if we think that that is all there is to the illicit funds that are sloshing around in these other regimes, I think that is not being very realistic. So, the strength of our regime is also in detection and then, to be able to enforce in a decisive and robust manner.

In this particular instance, if we had not made the decision to withhold enforcement action until as full a picture emerged, we might have been able to, say, sometime in 2022 or the earlier part of 2023 gone after the suspects, we might not have gotten what was initially $1.8 billion, which grew to $2.4 billion and now $2.8 billion. We might have found a much smaller amount and we might have patted ourselves on the back and said that, "That was not too bad. Well done."

But, in fact, we would have missed an opportunity to get to the root of the problem and to try our very best to stamp it out.

This ability to uncover a web of this size is actually something that speaks volumes. So, if you are a money launderer, if you still think that Singapore is a good place to try and flow your dirty money through, please know that we are equally resolved to catch you.

Mr Speaker: Ms Hazel Poa.

2.50 pm

Ms Hazel Poa (Non-Constituency Member): Thank you, Mr Speaker. I would like to seek two clarifications.

First, is MAS of the view that our existing penalties imposed on financial institutions for breaches of anti-money laundering measures are sufficiently deterrent and are the financial penalties linked to the amount that is being laundered?

Second, what sort of penalties have been imposed on the real estate companies or agents for breaching anti-money laundering measures?

Mr Alvin Tan: Sir, I thank the Member for her supplementary questions. As my colleagues have mentioned, there are three prongs to the approach towards anti-money laundering and terrorism financing. The key to this is the first prong, which is prevention, and MAS regularly reviews all of our AML/CFT procedures. We review them as we go along and, of course, regularly as well.

The first also is that, given that there are huge financial flows into the system – millions of transactions every day – the same qualities which are strengths in our financial system will also be exploited by criminals.

In this case, and also, in speaking to Member Raj Thomas' view, MAS' supervisory engagements with financial institutions, underpinned by all of the different procedures, regulations and preventions, are ongoing in this case. We will constantly review whether there had been any lapses in the AML/CFT regime in accordance with our process and our policies and also whether any of these lapses had been incurred in onboarding the accused persons.

Where there has been complicity on the part of the relationship manager, for example, or senior management, in onboarding the accused persons, I want to assure all Members that if MAS finds any complicity or collusion by banks or their staff, we will not hesitate to take firm actions against the financial institutions and individuals involved to hold them accountable.

Mr Speaker: Mr Zhulkarnain Abdul Rahim.

Mr Zhulkarnain Abdul Rahim (Chua Chu Kang): Thank you, Sir. I thank the Second Minister for Home Affairs for answering my PQ. Sir, I have just one supplementary question.

Although we need strict controls for our AML regime, I think we need to balance that with the cost of due diligence and overburdening our businesses for checks and reporting. What are the steps to sensemake and regularly consult the stakeholders, particularly financial institutions, pawnbrokers and our precious stone and metal dealers as well?

Mrs Josephine Teo: Mr Speaker, I thank Mr Zhulkarnain for his question. May I also just note that Mr Mark Lee made largely the same comments when he posed his Parliamentary Question, which was to urge caution in terms of the extent of the measures that we put in place.

To Mr Zhulkarnain's question, in fact, our sectoral regulators engage with their gatekeepers very regularly. Earlier this year, for example, because of the impending changes in our Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act, MinLaw had engaged with the industry behind closed doors to get a sense of what they were observing and to also find out if the additional measures that MinLaw was intending, was thinking about, would be too onerous to implement and also, more importantly, to what extent they could be effective.

MAS, as well as the CEA, regularly engage their respective communities of gatekeepers as well.

So, these engagements are ongoing. But I think the point that the Member is also trying to make, Sir, if I may, is that the key is in sensemaking. It is not just a question of imposing reporting requirements for the sake of the reporting requirements. We would have to try and connect the dots. Otherwise, it is just lots of signals and a lot of noise, which you cannot really do very much about.

You have heard me talk about how the STRO had put in place a new data analytics system since February last year. Minister of State Alvin Tan also talked about using COSMIC as a way of helping financial institutions make better sense of what information has already been captured through the STRs.

These efforts will obviously have to intensify. I should also say that each time we have a big bust like that, it also offers us fresh insights as to what kinds of signals we should be paying greater attention to.

Mr Speaker: Mr Neil Parekh.

Mr Neil Parekh Nimil Rajnikant (Nominated Member): The truth is that with even the best technology today, it is impossible to completely weed out money laundering. As the Minister put it so eloquently, it is not like looking for one needle in one haystack but looking for one needle in multiple haystacks. And we also have to keep in mind that while good guys are getting smarter, perhaps the not-so-good guys are getting smarter even faster. Having spent many years as the Asia CEO for a large Australian bank, I have lived through this experience myself.

Mr Speaker: Mr Parekh, can you get to your clarification, please?

Mr Neil Parekh Nimil Rajnikant: Very quickly. My question is: from most gatekeepers, intermediaries wish to enforce the AML rules on a regular basis but often are not equipped or knowledgeable enough to ask the right questions during the process. So, perhaps the focus should be more on providing additional training and guidance for these intermediaries as well as potential gatekeepers to make sure that the right questions are asked. In many ways, one feels that the non-banking financial institution intermediaries are where banking institutions used to be 15 years ago.

Mrs Josephine Teo: Mr Speaker, I fully agree with Mr Neil Parekh. He is absolutely right.

We do have a set of red flag indicators that each sectoral regulator provides to their community of gatekeepers. Clearly, these indicators can be improved and we will continue to do so over time.

Clearly, it is also in our interest to ensure that the training of the gatekeepers is properly done so that they, like Mr Neil Parekh said, also ask their customers the right questions and their minds are correctly attuned to the potential risks.

So, I thank him for his suggestion. It is certainly something that we will continue to uplift our capabilities in, and I am sure Minister Indranee and her IMC will look into. I think it is, in fact, the fourth of her terms of reference, if I heard her correctly.

Mr Speaker: Mr Leong Mun Wai.

Mr Leong Mun Wai (Non-Constituency Member): Sir, I have two supplementary questions: one for Minister Josephine Teo and one for Minister Indranee Rajah.

For Minister Josephine, can I ask, based on the investigations so far, how was the $2.8 billion of funds placed in our system? For example, how much was through our banking system and how much was through cash and then how much to other channels?

For Minister Indranee, may I ask, just now she answered the question on the cash transactions, although she said it is not appropriate to impose a quantum on the amount of cash to be used in transactions but I used to run a stockbroking company in Singapore, I can declare, and we report suspicious transactions as well. So, can I ask Minister Indranee, so far what was the maximum amount of cash that was reported by the institutions – whether financial institutions or whether the integrated resorts (IRs) or public companies – the highest amount of cash transaction reported by IR, banks and property companies through the suspicious transaction reporting system.

Mrs Josephine Teo: Mr Speaker, I thank Mr Leong for his questions. But as I explained during my Ministerial Statement, this is a live investigation. I have shared with Members the extent to which I am able to reveal. So, as to his specific question, this is a level of detail that will have to be made known at a later stage. I am not able to comment more on the details of this case – Mr Leong asked how they came to be placed in our financial system. This is a level of detail that we are not at liberty to discuss right now. As you well imagine, we are continuing to uncover new assets. And if we are in the process of still trying to uncover the assets that have been procured as a result of these likely criminal proceeds, it would not be in the interest to say more at this point in time how the tracks were eventually identified.

I am also not sure that the question that the Member posed to Minister Indranee ought to be answered by her. I think I should answer it because it relates to the STRO. I mentioned in my Statement that 43,000 STRs were filed on average annually between 2020 and 2022, 80% of them came from the financial institutions, 20% came from the other non-financial institution gatekeepers that would include corporate service providers, that would include property agents and other types of gatekeepers. So, that is the overall number. He might have missed that. Or I am not sure that there was another level of detail that that he was seeking.

Mr Leong Mun Wai: Sir, sorry.

Mr Speaker: Mr Leong, okay.

Mr Leong Mun Wai: Yes. Can I clarify for the Minister that I am asking for specific amount of cash reported by the IRs, reported by the banks and reported by the property companies in the STR system?

Mrs Josephine Teo: Sir, as much as I like to be able to provide this level of detail, I am afraid this is not possible right now.

Mr Leong Mun Wai: Okay.

Mr Speaker: Minister Indranee, is there anything that you like to add?

Ms Indranee Rajah: Thank you, Mr Speaker. No, there is nothing that I would like to add except to say one other thing, which is that the STRs by their nature are confidential. Insofar as anybody is asking what does a STR contain, this is not information that is generally disclosed in any event because it is part of the investigation and this is a live investigation.

Mr Speaker: Mr Mark Lee.

Mr Mark Lee (Nominated Member): Mr Speaker, Sir, I extend my gratitude to the Ministers for their thorough response concerning this case.

I have three supplementary questions. The first is, considering Singapore's amplified efforts to combat money laundering, would we be maintaining a universally welcoming stance for businesses or transition to a more discerning and selective methodology? Are there plans to recalibrate our focus towards specific countries or demographic sectors?

The second is, as the Government introduced new protocols which are crucial to uphold our reputation as a reliable financial centre, these compliance measures would also require capacity development, skilled enhancement and adaptation periods for both frontline and backend personnel across all participating entities. How are we planning to bolster these capabilities without compromising the system's overall efficiency?

Mrs Josephine Teo: Mr Speaker, to Mr Lee's first question, we will proceed carefully. I think within his question is the concern that we will have knee-jerk reactions and overdo the reporting requirements as well as the other anti-money laundering obligations that we impose on different companies. So, his point is very well taken. We always strive to be very calibrated in the statements of my colleagues and I; we were careful to emphasise that maintaining Singapore's overall friendliness towards legitimate businesses and legitimate investors. That must still be a priority for us to uphold. It is not a question of just layering on new measures without regard to their effectiveness but, really, weighing which are the new approaches or measures that will be necessary in order for us to uphold our reputation as a sound financial centre. So, that is to his first question.

The second question is with regards to capability development and expanding the capacity of both our law enforcement agencies as well as our gatekeepers. It is very much related to Mr Neil Parekh's points, and we totally agree with him and that is also an area of effort that we will have to step up.

I am sorry I was not sure that there was a third question specifically.

Mr Mark Lee: No.

Mrs Josephine Teo: Okay, thank you.

Mr Speaker: Mr Saktiandi Supaat.

Mr Saktiandi Supaat (Bishan-Toa Payoh): Thank you, Mr Speaker. I have one supplementary question. I would like to direct it to Minister Indranee and Minister of State Alvin Tan.

I listened to Minister Josephine's speech just now. She mentioned about the financial sector contributing about 14% to GDP and 200,000 workers. I am mindful of the importance that the financial sector contributes to Singapore's GDP and, of course, our entrepot hub, trade hub as well. So, I just want to ask a supplementary question on the enhancement aspects of things, following this episode.

First question I have for Minister of State Alvin is with regards to resources: how much we have spent on handling AML in MAS to handle such things, including in terms of staffing, in terms of capacity building? So, it is somewhat related to the previous supplementary questions on staffing, resources.

An additional question is to Minister Indranee: in the IMC, in terms of capacity building for agencies in relation to the financial sector like MAS, how do we compare in terms of staffing and amount spent on capacity building comparing to other financial hubs like New York, London, Hong Kong and other jurisdictions as well? Do we pale in comparison in terms of spending, in terms of spending, in term of staffing levels, going forwards as well?

Mr Alvin Tan: I thank Mr Saktiandi Supaat for his questions and I acknowledge also that it is very important that the financial sector represents 14% of our GDP and accounts for 200,000 jobs. So, we must make sure that our financial sector remains robust, both in terms of the vibrancy of the financial sector as well as being stringent to prevent illicit activities in the financial sector.

In that case, in the second limb of that question, therefore, it is –how are we preparing our sector regulators, supervisors, for example, to be prepared and to be able to look out for these illicit activities? Let me share a few.

On anti-money laundering resources, the MAS' approach to the supervision of anti-money laundering and the countering of financial terrorism, is that it has established the dedicated department, that is the AMLD, in 2016. This department is responsible for three aspects, including regularly reviewing policies relating to money laundering and illicit financing, and also to then supervise how financial institutions manage these risks. The third is also being forward looking and constantly looking at trends and typologies that will emerge, such as the typologies that have emerged in this case.

But we also know that there are some limitations. The AMLD currently has 40 staff and they work very closely with other departments to tackle money laundering as well as terrorist financing.

We also understand that the volume – Minister Josephine Teo talks about 43,000 over 2020 to 2022, and 80% of these STRs are filed by financial institutions. I wanted to assure the Member and also Members of this House that MAS has in fact been building up these capabilities and at present are using data analytics and network analysis tools to conduct system-wide money laundering and terrorist financing risk surveillance.

It is really our approach to continue to review and enhance these surveillance capabilities, including with the money laundering and terrorist financing information when we launch and we roll out COSMIC, which allow greater sharing of information amongst financial institutions.

We will also share information with RTIG and other agencies, inter-Ministry agencies, to act on the typologies that I mentioned, that are emerging and quickly stop these illicit activities from gaining ground.

Ms Indranee Rajah: Mr Speaker, Sir, Mr Saktiandi asked how do we compare with other hubs in terms of the spending that we put in for the resources.

If I may, that may not be perhaps the way to look at how to strengthen effectiveness because it is not so much how much money you put into it but how effective you are and how much value you get for whatever money you put into it.

So, we just take a broader look at the system. You think about it this way. There are so many parts of our system. It is not just who is staffing the STRO or who is staffing Police or who is staffing a particular Ministry. Every bank officer who deals with people is a part of the system. Every real estate agent is a part of the system. Every lawyer. Every accountant. Every Registered Filing Agent. And each of them have parts of the puzzle.

The real nature or the real key to uncovering the money laundering is making sense of the patterns because everybody owns a little piece of it. You file, you send it to STRO and I think Minister Josephine mentioned earlier, STRO is doing much more of the data analytics now. So, increasingly, it is going to become technology and analytics that pull together all the information that different people in this system submit up.

So, I think, to answer his question, when we set up the IMC, one of the key areas of focus that I talked about was, how we can centralise and strengthen monitoring and sense-making capabilities across Government agencies to better detect suspicious activities. So, we will put in whatever resources are necessary to be able to make better sense of this and some of it will have to be done by technology, some of it has to be done through better training of whether it is real estate agents or anybody and the financial sector. And then the real key is how do you design it in a way that pulls together all this information and a pattern emerges. That is really how the detection and the capability building should be built up.

Mr Speaker: Ms He Ting Ru.

Ms He Ting Ru (Sengkang): Thank you, Mr Speaker. I have three clarifications.

The first is a general one. In the recent years, we have seen increased wealth influx into Singapore and some of these fund flows are now suspected to be part of the proceeds of criminal activities. I am just wondering taken in total, what impact, implications or estimated effects will these developments and findings have on our economy, specifically financial, wealth management, asset management sectors, going forward?

The second one is for Minister Indranee, relating to the approvals granted to foreigners to buy landed properties in Singapore and, I think, it is well taken that the numbers have been very low. But just coming back to my PQ, I was just wondering about whether SLA specifically looks at money laundering, does some kind of money laundering checks as well when doing the assessments for these applications. I think one of the criteria was also about exceptional economic contributions should be made to Singapore and I am just wondering about what sort of general factors are taken to account when making the assessment of whether or not these applications do meet these criteria.

My third clarification is how many property agents, developers and owners have been investigated in the last three years for failing to exercise duties to conduct CDD/AML type checks and how are these investigations typically commenced? Are they usually tip-offs or are they proactive investigations that are carried out to make sure that all these individuals and these professions are exercising their duties properly?

Mr Alvin Tan: Sir, I will answer Ms He Ting Ru's first question. I think the flow of funds speak to the robustness and the dynamism of Singapore's financial sector. As we mentioned earlier on, the sector accounts for 14% of our GDP as well as 200,000 jobs. So, we must and we will continue to build our financial sector because it creates good jobs for Singaporeans and enhances our standing as an international financial centre.

However, we know, given that there are millions of transactions every single day, that there will be some illicit funds. But the majority of these transactions, as we had mentioned, are legitimate. So, it is very important that we do not throw the baby out with the bathwater. We throw only the dirty water out. That is really important.

The second part of this limb, as I had mentioned earlier on, is also the robustness of our AML/CFT regulations, that is really much in line with what international financial sectors have. So, it is strict enough, but we would also be very keen to make sure that we remain, as both Mr Mark Lee as well as Mr Neil Parekh had mentioned, we remain open to global financial flows, investments, as well as talent.

Mr Speaker: Minister Indranee, I wanted to make the request to Ms He whether she would mind if her questions on real estate could be moved to when we cover the third segment? I know it is sometimes not easy to frame it all together, but I can see that we are moving from segment one to the second segment, which is on financial systems and sector. So, I will try to keep it in that way for all the questions, if possible. I will come back to you, Ms He, when we come back to the real estate segment. Mr Derrick Goh.

Mr Derrick Goh (Nee Soon): Thank you, Mr Speaker. Alluding to Minister of State's earlier point about strengthening of MAS' capabilities and AMLD in respect of AML, could the Minister of State share his perspective on how other international financial centres have dealt with financial institutions as well as complicit individuals who are implicated in money laundering cases? And then of course comparing this to Singapore's situation.

Mr Alvin Tan: Sir, I thank Mr Derrick Goh for his supplementary questions. I think both Minister Teo and Minister Indranee had also mentioned this, and I thought it will be useful to also flesh this out.

Minister Teo mentioned, and I too have mentioned, that the very characteristics that make us a dynamic and open financial sector also makes it attractive to criminals. But like other financial centres, Singapore is not unique to this challenge of money laundering.

Other financial regulators have also had to deal with the cases and Minister Teo had mentioned that in her main reply. For instance, we mentioned the 1MDB case. But the United States (US), the UK, Switzerland and Hong Kong also imposed fines and warnings against their financial institutions for respective failures in AML/CFT controls. In Switzerland, for example, one individual was fined for failing to file STR. So, it is not unique to Singapore. It occurs across the world's financial centres.

I would like to assure the Member and Members of this House that Singapore will continue to fiercely defend Singapore's reputation as a clean and trusted financial centre, and to make sure and to assure everybody that we will not hesitate to take firm actions where warranted, including taking financial institutions and individuals to task should we find evidence for breaches of law and misconduct.

Mr Speaker: Mr Don Wee.

Mr Don Wee (Chua Chu Kang): Thank you, Speaker. I have two supplementary questions for Minister of State Alvin Tan. Does MAS have any roadmap to expand the COSMIC financial crime risks to new or known trends that may post a reputation risk? And how does MAS decide to disseminate such intelligence deriving from STRs in a timely manner to other financial institutions as part of the ACIP public-private partnership that have proven to be effective, especially when it is not uncommon that such money laundering suspects hop banks after their accounts were closed by the previous bankers?

Mr Alvin Tan: Sir, I thank Mr Don Wee for this very important question. I think it is quite important just to understand whether if you open a bank account and you are affected, whether you can hop to another bank and whether the information will be shared.

As the Member knows, MAS requires banks to abide by customer confidentiality provisions that is provided for in the Banking Act and this prohibits them from disclosing customer information. However, to prevent criminals from exploiting these weaknesses of each FI's understanding of their customers' risk profile is because that is limited by the information the financial institution collects. We know that there is a particular weakness. And therefore, as I mentioned earlier on, we are developing COSMIC to allow financial institutions to share information on customers that specifically cross certain risk thresholds and to then allow them to break down these information silos more effectively so that you are able to detect and disrupt criminal activities.

In subsequent phases, as mentioned earlier, we will expand COSMIC to include other risk areas and even more financial institutions. But in the interim, as we await the launch of COSMIC, MAS will monitor for material risk mitigation to financial institutions not yet on COSMIC, and then we will also take the preventive or supervisory measures to prevent or to mitigate such developments from taking place.

In the meantime, also, banks can and should, and will be and are able to, alert other financial institutions of concerning trends, typologies and emerging risks through sharing information on our public-private platform, which Mr Don Wee mentioned, which is ACIP, so that mitigating factors and mitigating actions can be taken by financial institutions as well as Government agencies to thwart these efforts.

Mr Speaker: Ms Usha Chandradas.

Ms Usha Chandradas (Nominated Member): Thank you, Mr Speaker. I have two clarifications for the Minister of State Mr Alvin Tan. I thank him, first of all, for addressing my PQ relating to the tax-related financial sector incentives. The Minister of State has mentioned that one accused person involved in the money laundering incident has been linked to a tax-incentivised single family office, but upon application for that tax incentive, nothing suspicious had surfaced. So, I would like to clarify if the entity concerned is still enjoying the tax incentive that it has been granted, and if so, whether there are any plans underway to revoke the grant of that tax incentive?

I would also like to clarify that my original PQ related to the general grant of incentives to funds under sections 13D, 13O and 13U of the Income Tax Act and so not just incentives granted to single family offices. So, can the Minister of State confirm that within this wider scope of the question, that it is still the case that only one accused person has been linked to a tax-incentivised entity?

Mr Alvin Tan: I thank the Member for her question. As investigations are ongoing, I cannot reveal more than I had said in my Parliamentary reply earlier on. However, what I can say is that MAS is tightening these measures as necessary, and we will be looking to terminate these incentives as appropriate.

Mr Speaker: Mr Edward Chia.

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Thank you, Speaker. I would like to thank the Ministers for addressing my PQs on potential abuse on charities fundraising platforms. I would like to ask three clarifications. The first is, in cases where charities are found to be receiving donations by individuals that have been found guilty of money laundering, what are the recourse for charities if they have spent the said sums to serve the charities' beneficiaries, and if there will be any difference in recourse between charities who have filed STR compared to those who have not?

The second clarification is what are the duties of charity fundraising platforms – not just the charities, but the platforms – in protecting themselves against money laundering or terrorism financing abuse?

And thirdly, are there enhancements to the COC's controls and abilities to detect malicious actors from using charities for round tripping purposes?

Mr Alvin Tan: Sir, I thank the Member for his supplementary questions. These are in regard to charities. The answer to the first question is it is a legal obligation to file an STR if charities know or, in fact, have grounds to suspect that the property or transaction that they are dealing with is connected to criminal activity. We will be covering these questions in the COC's advisory, which Minister Josephine Teo had mentioned.

On the second question on the duties of charities and how to safeguard against money laundering and terrorist financing abuse, we expect charities to implement appropriate mitigating measures to safeguard themselves against potential abuse for illicit purposes, including money laundering and terrorist financing, as charities may be misused as conduits for the movement of illegal funds. Charities should exercise vigilance in accepting donations, in particular, when the donors are unknown or unfamiliar to the charities, or when requests are made by donors to redirect part of the donations to unknown third parties for purposes that may be incongruent with the charities' charitable objectives. A charity should also perform reasonable due diligence checks on donors, so as to ascertain the legitimacy of the source of funds or donations received, especially when a substantial amount of donation is received from an unfamiliar or an unknown donor. If charities have reasonable grounds to suspect that any property may be connected to a criminal activity, as I mentioned earlier on, they are required to file an STR.

On the third question, we will review if there are gaps found, and the COC has been engaging charities all of this while on AML/CFT measures, and we will continue these efforts.

Mr Speaker: Ms Foo Mee Har.

Ms Foo Mee Har (West Coast): Thank you, Speaker. I have one clarification for Minister Indranee. We can only be as strong as our weakest link. In many jurisdictions, DNFBPs, such as lawyers, accountants and real estate agents are regulated in as much the same way as credit and financial institutions. Actually, the report that Minister Josephine Teo quoted, the same report, FATF's report, went on to say, in Singapore, whilst it had good things to say, but it did go on to highlight Singapore's immature understanding of money laundering and terrorist financing risks amongst these players, the DNFBPs.

So, I would like to ask the Minister for her assessment of what is the state of development in Singapore amongst the non-financial sector in combating money laundering and what more can we do to strengthen our system? I think, most importantly, when we get to the IMC is to look at aligning of incentives.

Ms Indranee Rajah: Mr Speaker, I thank Ms Foo Mee Har for her clarification. I think when people look at the very large, staggering quantum of the $2.8 billion in this case, they might draw the wrong conclusion about the state of money laundering in Singapore or the adequacy of our regulatory regime. But this really could not be further from the reality because this case is a culmination of two years of painstaking planning.

The Member was asking about my assessment of where we stand now. I would say that, first and foremost, it is strong and a robust regime. We could, for example, have just, at the beginning, taken out a few of the suspects, seized a few million dollars and called it a day. But we did not do that. We wanted to develop as full a picture as possible, go after the entire network. So, we take a holistic approach. Where there were suspicious indicators associated with any individual, we pursued it relentlessly. We were patient. And this is testament to the strength and robustness of our regulatory and enforcement regime.

But we can always do better. And I think what we have been outlining here today, is we have been saying that we can do better in regulating gatekeepers like the lawyers, accountants, real estate agents, especially through prevention, detection and enforcement as well as other prongs of our AML strategy. And that is what the IMC will be looking at.

Mr Speaker: I am starting to go into the real estate segment, segment three. Mr Gerald Giam.

Mr Gerald Giam Yean Song (Aljunied): Thank you, Mr. Speaker. I think my PQ was not fully answered. I will just repeat the salient points of it. I asked in each of the last three years how many STRs were filed with regard to property transactions and how many of such property transactions were later found to be involved in AML/CTF activities, and lastly, how many individuals were prosecuted for a failure to file STRs when they should have?

And I have some further clarifications for Second Minister Indranee. Sir, real estate formed a large proportion of the $2.8 billion in assets seized in the operations. However, property agents tell me they often do not have many tools other than a Google search engine to conduct customer due diligence. Can property agents access detailed background information on foreign individuals, including their businesses, wealth sources and red flags from the 43,000 suspicious transaction reports. If not, can MAS grant them limited access to COSMIC, RTIG or another similar portal for better due diligence. And I note that the Second Minister said the CEA is developing a one-stop webpage. What will this webpage provide and when will it be ready?

Mr Speaker: Minister Indranee, perhaps you could also address what Ms He Ting Ru raised just now on real estate.

Ms Indranee Rajah: Okay, perhaps I will take the question by Ms He Ting Ru first. I think Ms He asked firstly, whether or not SLA carries out CDD. The answer is, SLA does not carry out additional AML checks on transactions because this would duplicate the existing CDD checks by real estate agents, developers and agencies. The conveyancing lawyers, the lawyers and the financial institutions also do the checks. So, SLA is not the main interface with the people doing the purchases, and hence, they do not do AML checks.

I think her second question was on the contributions for approvals. As I mentioned earlier in my main answer when it comes to landed property, there are two approval regimes. One is for mainland Singapore. And the other is for land that was residential property that was developed specifically to market to international clientele; and there is one – Sentosa Cove. It is the one in mainland Singapore, where the approval regime is stricter and that is, I mentioned earlier, that is the one where we take into account, various things: the applicant must be a PR for at least five years and that is the one that requires the exceptional economic contribution to Singapore, that could include factors like, how much income taxes have been paid, and what other contributions they have made.

For Sentosa Cove, which was developed specifically for an international clientele, generally speaking – if they are able to show identity and they are not allowed to own more than one landed property. So, should they not have any other residential property, approval is generally granted. [Please refer to "Clarification by Minister, Prime Minister's Office and Second Minister for Finance and National Development", Official Report, 3 October 2023, Vol 95, Issue 113, Correction By Written Statement section.]

In my early answer, I said out of the 88 applications, only two were denied. So, that is on the approvals.

Finally, I think Ms He had a question on how many estate agents have had action taken against them. Ms He had asked in respect of the past five years, but the Estate Agents Act (EAA) and the regulations have been in place for only three years. The EAA and regulations have been in place since 2021. So, that is the period you are referring to. The short answer is that the CEA will not hesitate to take action against property agents or agencies, who are found to have breached the EAA or the Prevention of Money Laundering and Financing of Terrorism (PMLFT) regulations. And those who fail to comply with the regulations can face disciplinary action, including financial penalties of up to $100,000 for property agents and $200,000 for property agencies and suspension or revocation of an agent's registration or an agency's licence. Since 2021, CEA has taken action against two property agents who were found guilty by the CEA disciplinary committee for contraventions of the EAA and the PMLFT regulations.

These agents failed to comply with regulations relating to obtaining, documenting and verifying the accuracy of identifying information of clients and determining and documenting the risk assessment of clients engaging in money laundering or financing of terrorism. In the most recent case, the property agent was imposed with a financial penalty of $400,000 and had her registration suspended for four months in July 2023. [Please refer to "Clarification by Minister, Prime Minister's Office and Second Minister for Finance and National Development", Official Report, 3 October 2023, Vol 95, Issue 113, Correction By Written Statement section.]

So, basically fines and you can be suspended and have your licence revoked.

I think Mr Gerald Giam had asked about information sharing. With respect to COSMIC, that will have to be directed to Minister of State Alvin Tan. But with respect to how we can better assist real estate agents, as I mentioned, CEA is looking at setting up the webpage to assist them. We will step up on the training and on the guidelines. Some other types of information they would have available to them are by way of ACRA searches, for example. This is information that they can pull.

For higher risk transactions, they are required to do enhanced due diligence; they have to ask for information. So, if they are being represented by someone and the beneficial owner or the owner is not here, they would want to see, for example, a power of attorney and/or letter of authorisation. They might have to ask for sources of the income and the company's place of incorporation. The types of documentation differ, but essentially, CEA provides these guidelines and conducts trainings for the real estate agents, so that they will have a better idea of what to ask. As part of the IMC that I will be chairing, we will look to see what more we can do to better equip real estate agents in this sector.

Mr Speaker: Assoc Prof Jamus Lim.

Assoc Prof Jamus Jerome Lim (Sengkang): Thank you, Mr Speaker. If a property seems like it is one of the more major vehicles for loopholes, potential loopholes in the money laundering process, I am wondering, at least for the IMC, will there be a disproportionate effort in better aligning AML procedures for the real estate sector vis-à-vis other financial institutions? I say this because many industry insiders share with us that they believe that there is at least a 10- to 15-year lag in terms of the quality of AML regulations in the sector vis-à-vis the financial sector, more generally.

Ms Indranee Rajah: I thank the Member for his clarification. Indeed, we agree that more can be done. We had already started to do more in this space which is why even before this case came about, we had already started to look at how we could strengthen the system. Hence, the Real Estate Agents Act was passed in 2010 and came into effect in 2021, and the regulations that I mentioned as well. We will certainly see what we can do to strengthen the regulations in this sector. [Please refer to "Clarification by Minister, Prime Minister's Office and Second Minister for Finance and National Development", Official Report, 3 October 2023, Vol 95, Issue 113, Correction By Written Statement section.]

Mr Speaker: Mr Desmond Choo.

Mr Desmond Choo (Tampines): I have a clarification for the Minister of State Alvin Tan on the role of family offices. In this case, how many family offices were involved and how will MAS strengthen the regulatory regime for family offices?

Mr Alvin Tan: Sir, I mentioned to Ms Usha Chandradas as well as Mr Desmond Choo, and maybe I will share a little bit again. I said that ongoing investigations and supervisory engagements suggest that one or more of the accused persons in this case may have been linked to SFOs that were awarded tax incentives.

I also shared with Ms Usha Chandradas earlier that MAS is looking to tighten these checks and that we will be looking to terminate these incentives, as appropriate.

I also want to take a step back to touch on Ms He Ting Ru's point about financial flows. Family offices play an important role in our financial sector as well and I want to caution Members against seeing all SFOs in the same light as those that are charged or wanted. SFOs linked to this case, in fact, represent a very small proportion of all the SFOs here.

We have just completed the consultation, which will enable us to tighten some of these processes, but we remain open as the other Ministers and I have mentioned – to talent, to investments as well as to financial flows, including those in SFOs. Our regime is strict. Our regime is in line with international best practices, and so, these two prongs of making sure that we are dynamic and open, and that we also have strong robust controls, remain central to our functioning as a vibrant and trusted financial centre.

Mr Speaker: Mr Yip Hon Weng.

Mr Yip Hon Weng (Yio Chu Kang): Thank you, Mr Speaker. My question is directed to Minister Indranee. I am glad to hear that there are several levels of checks for real estate transactions to prevent money laundering. Are the current checks sufficient and how do we ensure compliance for these checks? For instance, how do we ensure that property agents are trained to their appropriate level to conduct AML CDD? Perhaps having some audit checks and also have them take compliance tests? Given this case, would there be further measures to ensure that Singapore's property market is not being targeted or misused for money laundering activities beyond just filing STRs?

Ms Indranee Rajah: Sir, I think we can always do more to help equip real estate agents and others in the sector to do better. But I think that the key thing to remember is this: the obligation that they have is to file an STR. So, if something strikes them as suspicious, that is their main duty. They do not have to carry out an entire investigation and crack the case themselves. They do not have to do the job of CAD or SPF.

The key thing that the real estate agents and others in the non-financial sector have to do, is to spot when something seems off, is inconsistent or cannot be explained. Usually, when you are in the sector long enough, you get a sense and a feel of this, which is why these are the gatekeepers. They are the ones who deal with these transactions constantly and after a while you will be able to pick up when something is just not quite the way it ought to be.

So, in response to the first question, the answer is there is always more that can be done and we will look at that as part of the IMC.

The other question that Mr Yip asked was what checks are in place to ensure that Singapore's property market is not being targeted or misused for money laundering activities. You can never ensure that we will not be targeted. You can never ensure 100% that it will not happen because, as much as we try to prevent, you can be sure of the fact that because of our status as a financial hub and financial centre, they would want to come here. But you can make it a very inhospitable place if we can step up on prevention, detection and enforcement, which Minister Josephine Teo talked about.

The other thing which may not have registered on Members' consciousness is this – Minister Josephine Teo alluded to it – the monies that are being laundered, online gambling and other things, most of that took place outside of Singapore. When they want to come here and use Singapore as a base for money laundering, most of them would try to keep their activities here clean.

So, on the face of it, they would do their very best to be as legitimate as possible here because they want this to be the place where they flow the illicit money and it comes out clean. Anybody who has watched "Breaking Bad" will know how this is done. "Better Call Saul" was an exposition on how you do money laundering.

In response to Mr Yip's question, when they come here, they are going to do their very best to look and feel and seem legitimate. The illicit monies come from elsewhere and they would try to put it through legitimate transactions so that when they come out, they are clean.

I think I have addressed the Member's questions. If I have missed anything, perhaps Mr Yip should let me know.

Mr Speaker: I did watch "Better Call Saul". It is a good movie. Mr Louis Chua.

Mr Chua Kheng Wee Louis (Sengkang): Thank you, Speaker. Just one clarification to Minister Indranee.

This is in relation to the purchase of landed properties in Sentosa by foreigners. If I recall correctly, I think the Minister mentioned that there were 88 transactions, of which two were not approved. Just now, the Minister also responded in her response that SLA does not conduct commercial due diligence.

In this aspect, I just want to understand what the processes or checks that are in place by SLA when it comes to such approvals and what the circumstances behind the two that were not approved were and, given the context of what has happened in the last two months, whether there are plans to institute additional processes to make sure that there is an additional layer of defence on top of the work that CEA and agents are doing.

Ms Indranee Rajah: For the properties in Sentosa Cove, the foreigners who are non-PRs can acquire them and approvals are generally granted. For example, if you own one Sentosa Cove property and you want to get another one, then because it is two properties, you may not get approval for that unless there is some good reason for it. So, the short answer is that the approvals are generally granted.

I do not have the details of the two that were rejected but I think the key message that I wanted to get across is that Sentosa Cove was developed with a specific marketing clientele in mind, which is international clientele, which is the reason why approval is generally granted when they are purchased by foreigners.

Mr Speaker: Mr Gerald Giam.

Mr Gerald Giam Yean Song: Sir, could I just request the Second Minister again to answer my question about how many STRs were filed with regard to property transactions?

Ms Indranee Rajah: I do not know the exact number but it is a much smaller proportion compared to the others. I think Minister Josephine alluded to about 80% of the STRs as coming from the financial sector. So, for the real estate sector, it is a much smaller proportion.

However, what I would like to emphasise is that the real estate agents are operating as part of an entire ecosystem, meaning that for any transaction of the property, there should be a bank involved – usually a financial institution; there should be a lawyer involved somewhere, the real estate agent or the property developer. So, because it is part of an ecosystem, just because a real estate agent may not have filed an STR may not in and of itself mean that anything suspicious may not be picked up. You have to see it in that broader picture.

But the percentage, compared to the others, is much lower.

Mr Speaker: I will be slowly moving on to the fourth segment concerning companies, immigration and work passes, just to let everyone know. Mr Leong Mun Wai.

Mr Leong Mun Wai: Sir, thank you. I have three questions for Minister Indranee.

The first question is: how did the 10 offenders and their associates manage to buy so many properties? Over a hundred properties were bought by them. How many of the associates were also involved?

The second question: while it is reported that there are more than 120 properties identified with the syndicate, why were there only 94 prohibition orders issued on the properties?

The third question: are there any landed properties on mainland Singapore among the non-prohibited properties?

Ms Indranee Rajah: Mr Speaker, Sir, let me take the second question first because the Member said, when there were more than 120 properties, why were there 94 prohibition orders?

Let me go back to what I had said earlier in my Ministerial Statement. I said, to date, 94 residential properties have been issued with prohibition orders. So, 94 refers to the residential properties. Then, in addition to that, there are 53 commercial properties and five industrial properties. So, I think that will make up the numbers that Mr Leong was asking about.

The Member's other question was: was there any landed residential property on the mainland that was issued with the prohibition order? Was that the question? The answer is, no. I said that out of the 94 residential properties, 60 were completed resale units, 34 were uncompleted units and eight of these properties were landed residential properties at Sentosa Cove. So, there were no mainland landed residential properties purchased.

I think the newspaper reports had indicated that some of them were caught in Good Class Bungalows (GCBs). I think that may be what the Member is thinking about. My understanding is that those were rented properties, not purchased properties.

Finally, I think the Member asked how the 10—he said 10 offenders. Technically, they are suspects at this stage. I do not think we can say they are offenders yet. They may well be, but they are suspects at this stage. I do not have details of that. It is still under investigation. Those details will have to come out later when the investigations are complete.

Mr Speaker: Mr Desmond Choo.

Mr Desmond Choo (Tampines): Mr Speaker, I would like to ask a clarification of Minister Josephine Teo which may be better addressed by Minister Tan See Leng.

She shared in her speech that there are frameworks to access work pass applications. Quite a few of the suspects were clearly holding on to work passes and they were staying in very expensive places. I would like to clarify with the Minister for Manpower what are these checks that MOM does and how do these checks contribute to the overall anti-money laundering effort?

Furthermore, how does MOM intend to improve the way these checks are conducted, in light of the money laundering incident, to support the whole-of-Government effort?

My third clarification is: if there were instances of these cases whereby the suspects were staying in places that were very expensive, were they surfaced and how were these addressed?

The Minister for Manpower (Dr Tan See Leng): Mr Speaker, I thank the hon Member for raising questions on the role that MOM has in tackling anti-money laundering risks.

MOM's work pass framework is intended to support Singapore in its economic growth. It enables companies to bring in foreigners who are complementary to our local workforce, spurring new investments, new growth in areas like the digital economy and the green economy. This will help us to transform our economy and also help us to seize new opportunities even amidst the uncertain global economic environment and geopolitical challenges in the medium term and we hope that this will ultimately create more good jobs for Singaporeans.

MOM conducts checks to ensure that our work pass framework is not circumvented. In particular, we check whether there is false declaration of salaries and qualifications and whether companies have business operations to cover the declared salaries of these workers.

As mentioned in the multiple Ministerial Statements made by my colleagues earlier, some individuals may abuse the work pass framework to enter Singapore to commit illicit activities, such as the present case of money laundering. Some may pretend to be employed by companies that are actually inactive or dormant. But others may operate companies with an active trading front to mask the movement of their ill-gotten gains. Yet others still may own a portfolio of legitimate and illicit businesses.

Criminals will constantly find new ways to circumvent our laws and our regulations and update their methods over time, making the task of detection even more complex and more difficult.

MOM's salary fraud checks should be, therefore, seen as a first layer of checks to detect companies that do not have business operations to cover the declared salaries of workers. This first layer of checks is part of a larger whole-of-Government system of checks to safeguard against money laundering risks. We will need to continue to coordinate with the rest of Government to uncover increasingly complex money laundering operations.

Let me explain in greater detail how MOM conducts salary fraud checks and our role in the whole-of-Government efforts to manage money laundering risks.

First, on the fraud checks. MOM uses data analytics to identify higher-risk work pass applications for greater scrutiny. Where there is any sign of possible salary fraud, companies are required to show documentary proof of business operations and their abilities to pay salaries.

We may also carry out checks after the work passes have been issued. Companies may be subject to further audits or asked for further proof after the work pass holder arrives in Singapore or, subsequently, at the point of renewal.

MOM also responds to whistle-blower reports to investigate whether companies have ongoing business operations.

We continuously sharpen our checks to better identify such fraudulent applications. For instance, we regularly update our data analytics with concluded fraud cases and enforcement findings so that they can more accurately pinpoint and flag out applications that are potentially fraudulent. We conduct audits to detect breaches and also to validate and strengthen our analytics. Our enforcement teams are also trained to detect various forms of salary fraud.

Specific to the recent money laundering incident, the Employment Pass applications were approved to these individuals because they met the then-prevailing work pass requirements on salary and qualifications. When asked for the proof of business operations and the ability to pay salaries, the companies which submitted the applications were able to provide supporting documents.

In addition, as Minister Josephine Teo explained in her Ministerial Statement earlier, work pass applicants are screened against a database of blacklisted individuals. At the time of their Employment Pass applications, none of the Persons of Interest had INTERPOL's Red Notices issued against them.

MOM will continue to sharpen our fraud checks based on real cases on the ground. Learning from the profiles of companies, and profiles of individuals involved in the money laundering incident, we will update our data analytics with high-risk archetypes and strengthen our checks on whether businesses are operational.

However, I hope that all of us, Members in this House, appreciate and I want to emphasise this, that the majority of work pass holders come to Singapore to work and contribute to our economy. Only a small minority are unscrupulous individuals. We, therefore, must take a sensible approach to calibrating our checks so that we do not hurt bona fide employers.

Second, on MOM's role in the whole-of-Government's efforts to manage money laundering risks and Mr Desmond Choo's question on how we will improve checks to better do so. Across the Government, we will review how to tighten our verification checks at various points. Minister Indranee shared in her speech that she will be leading an IMC to ensure that our regime remains up-to-date with increasingly sophisticated crimes. MOM will be part of the committee and will support its efforts.

With better sharing of information across agencies, MOM can improve our salary fraud checks and share salary fraud cases with other agencies to conduct further probes on whether the relevant individuals are also involved in illicit activities.

MOM will continue to take enforcement action on work pass applicants, pass holders and companies who have been found to be involved in illicit activities.

Our work pass framework is part of a broader system that is working as a whole to prevent unscrupulous individuals from entering Singapore on the pretext of employment, though we can and we will review how to tighten our checks at various points. However, we will need to take a balanced approach in reviewing our checks.

In the second quarter of 2023, Singapore is ranked the world's best business environment by the Economist Intelligence Unit. This strong performance is in line with many other global rankings on economic competitiveness. Singapore is known to companies as a welcoming place to do business in, and access to both local and global talent is an important factor that they consider. This is a hard-earned reputation that has taken us years to achieve.

And as I have said earlier, the vast majority of work pass holders come to Singapore to work and to contribute to our economy. We should not let a handful of individuals or black sheep taint the economic contributions of the majority and start closing our doors or giving the impression that we are doing so.

In fact, this is exactly why we need to be targeted in strengthening our checks so that we can take action on unscrupulous individuals and on companies while maintaining a business-friendly environment for the vast majority that want to invest in Singapore and to create good jobs for Singaporeans.

Mr Speaker: Mr Liang Eng Hwa.

Mr Liang Eng Hwa (Bukit Panjang): Sir, my question is actually related to what Minister Tan See Leng just talked about, the hard-earned status as a global hub.

There is a recent article in the Financial Times that alluded to this phenomenon that companies are increasingly wanting to domicile or headquarter their businesses in Singapore as they see Singapore as a trusted and neutral jurisdiction where they can avoid the geopolitical sensitivity and the Financial Times termed this as Singapore-washing.

So, I would like to ask the Minister of State or Minister Tan See Leng what is the Government's take on this, being tagged as a place for Singapore-washing.

More importantly, how do we guard against companies with such intentions who could abuse their legal status as a Singapore-domiciled company to misrepresent themselves in other markets, for example, and which could do harm to our reputation or compromise on our position?

Mr Alvin Tan: Sir, I thank Mr Liang Eng Hwa for his question. I think we have reiterated these points throughout this afternoon and the points remain very clear.

First, our success as an international and financial hub is premised on our status as a trusted and well-governed hub with a strong rule of law. And the same characteristics which investors as well as companies consider when they invest in Singapore, are the same characteristics, interconnectedness, that illicit criminals and syndicates also are attracted to.

And we have also said that Singapore has a very robust AML/CFT regime that is in line with FATF standards, for example, and our regime compares well with other countries.

So, the core response to the question is that Singapore will always remain attractive. We hope that Singapore will continue to remain attractive. But we must and we always must make sure that our AML/CFT standards are in place and prevention, detection and enforcements are in place at the same time, to keep Singapore open and connected and attractive to the flow of funds, to the flow of talent and to the flow of businesses.

Mr Speaker: Minister Tan See Leng.

Dr Tan See Leng: I thank the Member for that question. I thought that since the Member has gotten MAS and MTI's perspective, perhaps I can share a little bit from MOM's perspective.

For our data analytics, we triangulate and work with various sector agencies, to drive and improve our data analytics. The nature of data analytics is dependent on past cases that you can actually learn from and that is the learning model.

But it is important to note that, as a result of this particular incident, my sense is that it has strengthened us as a global hub. Like what Minister Josephine Teo talked about, zero tolerance does not mean zero occurrence. But the very fact that when this was surfaced, there was a whole-of-Government approach, carefully coordinated, very targeted, to eventually catch such a big web sends a very strong signal to the world that we continue to welcome global talent, we continue to welcome top-notch enterprises to come to set up, as long as you do your business honestly, earnestly and diligently. I hope that that reassures the Member.

Mrs Josephine Teo: Mr Speaker, thank you very much. I thought I would just like to briefly respond to the point that was raised by Member Mr Liang Eng Hwa.

For anyone to see value in being Singapore-washed, you must have something within Singapore that has attracted this way of thinking. You must be thought of as a jurisdiction of repute. Your anti-money laundering regime must be held in high regard because, if it was not, why would it be useful to be Singapore-washed?

Having said that, it does not mean that we adopt a very lax attitude towards anyone who sees a benefit of Singapore-washing. In fact, the more this is valuable to the bad actors, to the money launderers, the more we must be resolved to weed them out in order to uphold this standing.

So, on the one hand, it is kind of worrying that money launderers, criminal actors, would want to think of using Singapore as a haven to create the impression of legitimacy. But, on the other hand, it must say something about the quality of our regime, too. There are no two ways about it. Either we opt out of it and say that this is all too high risk, we do not want to be in this field, we would rather stay out of it completely. Or we say that we take the risks that come with it, we strengthen not just our preventive measures, but also our ability to detect and to take the criminals to task, the enforcement aspect of it, our capabilities and our consistency in approaching all of these issues as they come about.

I think we have to look at it overall, in terms of the benefits and the cost, And overall, if we consider how it has enabled Singapore businesses to be held in very high regard wherever it is that they go in the world and if we also think about the benefits it brings to Singaporeans in terms of the quality of jobs that we are able to provide, it is really incumbent upon us to make sure that our regime remains robust. And that is what this whole exercise is about for setting up the IMC.

Mr Speaker: Mr Leong Mun Wai.

Mr Leong Mun Wai: Sir, I have two questions for Minister of State Alvin Tan arising from some of his answers to the supplementary questions. I would like to seek further clarifications.

One, Minister Josephine Teo mentioned that $3.8 million of fines had been imposed on three banks. I take it that those are the only fines imposed so far. The question I want to ask the Minister of State is: is this penalty proportional to the amount of profit that the banks can make on the $1.45 billion which is still in the bank account?

Second question: with regard to the introduction of the COSMIC system, why should there be a problem with client confidentiality when the banks already share clients' credit data on the Credit Bureau?

Mr Alvin Tan: Sir, I thank Mr Leong for his questions. The first one is related to the Wirecard case, where only at $3.8 million was levied. Maybe I will also provide some background.

In the last five years, we had a total of 20 investigations that were opened against financial institutions for suspected breaches of AML/CFT requirements. And these enforcement actions were taken against 17 financial institutions. That shows that when we first prevent and then we detect, we quickly enforce. That is the hallmark of our AML/CFT regime which, again, I had mentioned, is on par with international standards as defined also by FATF's assessment.

The licence of one of the financial institutions was revoked. So, it is not just financial penalties, but also other forms of penalties to deter, thwart and punish in that regard.

The composition fines were imposed on 14 financial institutions and reprimands were issued to two financial institutions. In addition, a total of 25 investigations were opened against individuals. Enforcement actions were also taken against 11 individuals.

So, what I am trying to say is that, again, the third prong, the way that we enforce, is not just fines but there are also prohibition orders, reprimands and so on, so forth. So, it is a whole suite of it. Again, if you tie that with the overall AML/CFT framework, it is in line with international jurisdictions.

Can I just ask Mr Leong to just repeat his question with regard to COSMIC, please?

Mr Speaker: Mr Leong.

Mr Leong Mun Wai: Yes, Sir. What I mean is that the banks currently already share client credit information on the Credit Bureau. So, that is already sharing of client's information. So, what is the problem of introducing COSMIC to share information that may be related to the money laundering activities?

Mr Alvin Tan: Just to clarify that credit information is very different from STRs. I think Mr Leong would also appreciate that the direct sharing financial institution's information to financial institution, on STR, for example, will need to be very carefully circumscribed. Why? When I talked about this in May earlier on, Members who had spoken about the FSMA Bill that this House passed in May, had also expressed concerns about customer confidentiality. So, it cannot be that just because there is an urgent need, we move at a quick pace, at too fast a pace, that we forget the concerns about customer confidentiality.

Under COSMIC, I assure the Member, that information sharing will only be allowed when customers cross stipulated thresholds for sharing, which are primarily guided by financial crime red flags in pre-defined risk areas – and, currently, it is related to shell companies, trade-based money laundering and proliferation financing.

Again, I want to reiterate that financial institutions do not share STRs which only cover customer information. That is an important point to note.

Mr Speaker: Assoc Prof Jamus Lim.

Assoc Prof Jamus Jerome Lim: Thank you, Speaker. While the Minister of State is taking questions about COSMIC and we seem to be winding into this last segment of additional questions, if I could quickly follow up and ask a question that my hon friend Mr Gerald Giam had also posed. What inhibitions currently exist that would preclude real estate agencies and other non-financial institutions facing money laundering pressure, from getting onto a platform such as COSMIC?

Mr Alvin Tan: I thank Assoc Prof Jamus Lim. I had wanted to respond to Member Gerald Giam's question earlier on, so this gives me an opportunity to do so.

We were talking about how COSMIC initially in the earlier stages by the six banks is sharing information amongst one another. Let me just share that currently, MAS is able to share information in its possession with domestic supervisory and law enforcement authorities, as Mr Gerald Giam mentioned, for AML/CFT purposes, and this is to facilitate supervisory or investigation action. This will include information from COSMIC when it is rolled out. And where relevant, STRO, which is effectively Singapore's financial intelligence unit, may also share information and obtain this from COSMIC with law enforcement agencies to facilitate investigations and supervision.

Mr Speaker: Mr Leong Mun Wai.

Mr Leong Mun Wai: Sir, I like to seek further clarification from the Minister of State on the fines imposed on banks so far. Can I clarify that the Minister of State is of the opinion that our current regime, at the moment, we have only imposed $3.8 million fine on the banks, compared to the $1.45 billion deposits that are already in the system, is according to international standard?

Mrs Josephine Teo: I think Mr Leong is mistaken. The $3.8 million fine was issued in relation to one case – Wirecard. Minister of State Alvin Tan had already pointed that out. I am just reiterating what he has just said. It was one case. But there have been other cases.

Mr Speaker: Mr Leong.

Mr Leong Mun Wai: Sir, can I clarify with Minister Josephine then what is the total amount of fines imposed on our banks so far?

Mrs Josephine Teo: Separate the two things, Sir. The Member is asking at the moment what is the total number of fines levied on banks. I believe we do not have the information right now. If that is something that the Member is seeking, perhaps, I can advise him to file a PQ and then we can answer that specifically.

The point that the Member is trying to link together – this $1.45 billion – the case is still live. That amount has not been adjudicated. It is for the Courts subsequently to determine what should be done with them. And, in any case, I do not think it is right to link the amount seized with the fines that are imposed on the bank, on completely unrelated things. There will have to be a proper investigation as to whether there were actors in the financial sector that contributed to this web that we have uncovered. But until that has been properly settled, it is premature for you to draw any conclusions.

Mr Speaker: Ms Sylvia Lim.

Ms Sylvia Lim (Aljunied): Thank you, Speaker. I have two clarifications for the Second Minister for Home Affairs.

The first actually relates to something she said in her main speech about the red flags that alerted the authorities to this billion-dollar money laundering bust, if I can say it that way. She said that in 2021 there were a few STRs filed by financial institutions and also by other companies. So, could she let us know which industries these other companies came from? Were there property agencies, were there law firms, for example? So, that is my first question to clarify where these other companies came from that filed the STRs related to this case?

The second clarification is this: several of the persons arrested and charged were reportedly wanted by Police authorities in China and it was in relation, I think, to possible organised crime activities by these people wanted by police in China. So, my question is, have the Chinese authorities been assisting us in our investigation in Singapore? And related to that, has there been any indication that any Chinese parties will be making a claim on any of the assets or funds that have been seized in Singapore?

Mrs Josephine Teo: I thank Ms Sylvia Lim for her questions. On her first, in relation to the STRs, they came from a variety of gatekeepers and the usual gatekeepers that are involved include the banks, they include corporate service providers, they include real estate agents – and so there is a variety.

As to whether we connect the dots only using STRs, the answer is no. There will also be suspicious transactions exchange of information with foreign counterparts. I cannot comment specifically to what it is in this case; it is premature for me to reveal more but it would not be unusual.

Keep in mind also that there will be other sources of intelligence. Police interact with a wide surface and these can also help to form a picture as to what is going on.

So, I hope that addresses her questions.

Mr Speaker: Ms Sylvia Lim.

Ms Sylvia Lim: Thank you, Sir. Just to clarify again, I wonder if she could, I do not know whether there are any operational issues but whether she could confirm whether the Chinese police authorities are actually assisting us in our investigation; and, secondly, about whether there have been any indications so far whether they are making a claim on the assets seized?

Mrs Josephine Teo: Yes. Specific to this case, I am not at liberty to disclose which foreign law enforcement agencies we are working with. Suffice to say that there would be a variety. Because the proceeds that potentially had been laundered through the Singapore system involve activities that were carried on outside of Singapore; they could involve more than one jurisdiction. And as we cast our net wide, it would not be unusual or unthinkable for us to be cooperating with other law enforcement agencies – not confined to one country, China.

Mr Speaker: Mr Murali Pillai.

Mr Murali Pillai: Mr Speaker, Sir, I seek clarification from the Second Minister for Finance on two areas.

First, in relation to her Statement regarding the AML regime applicable to foreign companies in Singapore, may I ask if the Government is minded to review its decision to exempt foreign companies which hold only property in Singapore and not carrying other forms of business here from the requirement to provide beneficial ownership information? This was explained by the Minister for Finance in response to PQ I filed as striking a balance between regulatory compliance and ease of doing business. From an AML perspective, it makes sense to directly subject such asset holding companies to such requirements instead of relying on intermediaries.

Second, Sir, may I ask the hon Second Minister for Finance whether the Government would be minded to consider providing a Minister with powers to prescribe, through subsidiary legislation businesses that should be subject to customer due diligence requirements? Prior to this Police operation, I suspect not many Members would even know the existence of Bearbrick dolls, much less the fact that these dolls were allegedly purchased for money laundering purposes.

Currently, the CDD requirements are done via specific pieces of legislation. This may not be fast enough. In time to come, there could be other items which may be the money launderer's favourite. Speed would be essential to ensure our system can react to such developments. Hence giving our Minister the power to prescribe businesses that will have to conduct CDD may, therefore, help.

Ms Indranee Rajah: I thank Mr Murali Pillai for his clarification. I think his question really was with respect to foreign companies which do not do anything other than own property, should we not bring them under the ACRA regime and make them disclose any beneficial ownership?

Let me explain first the current thinking behind why we do not require that at the moment. The Companies Act and ACRA look at companies which carry on business in Singapore. If you have a foreign company does not carry on any business and the only thing it does is just buys a property, then strictly speaking, it is not carrying on business, it is just owning a property. And, therefore, it is not caught by the Companies Act regime for registration with ACRA. In fact, such a foreign company does not even need to be registered in Singapore at all. It just is the entity that owns a property. That is the reason why we do not require it come under ACRA.

But that is not to say that there would be no requirement to find out beneficial ownership of that foreign company because when they are buying the property, the financial institutions, the real estate agents and the lawyers who act, would have to make those inquiries as part of their due diligence and so they would have that information and the law enforcement agencies can, if necessary, ask these intermediaries for that beneficial ownership information.

That said, when we do our review as part of the IMC, we will look at all relevant areas and if anything needs to be finetuned or changed, we will look at it.

And I think his final question was – I was not quite sure I have understood the full import of it – if Mr Murali could just clarify that.

Mr Murali Pillai: Mr Speaker, Sir, with your permission, the second area for clarification is whether the Government would consider prescribing the Minister with powers to issue subsidiary legislation to allow businesses to conduct CDD? It would be a bit faster than the current situation where you have specific legislation. For example, precious stones and metal dealers, through legislation, they would now have to deal with customer due diligence requirements. Just so that we can be, hopefully, be at least at pace with the criminals.

Ms Indranee Rajah: The IMC will consider that request as part of its review.

Mr Speaker: Minister Teo.

Mrs Josephine Teo: Mr Speaker, with your permission, I would like to make a further clarification to the question that was raised by Member Mr Leong with regard to the $1.45 billion. Mr Leong was not right to, in the first place, conflate the $3.8 million with the $1.45 billion. They relate to completely different things. The $3.8 million is related only to the Wirecard incident.

With respect to the $1.45 billion, I had said in my Statement that these are seizures of monies in bank accounts amounting to more than $1.45 billion. This money does not belong to the bank. It is certainly not the bank's profits that you should use to weigh against the responsibility that we hold them to. This $1.45 billion has to be properly sorted out in terms of ownership. They just happen to sit in the bank accounts. They do not belong to the banks.

So, I hope that Members understand that these two numbers have no business being talked about together. I hope that makes it clear, Mr Speaker.

Mr Speaker: Mr Leong Mun Wai.

Mr Leong Mun Wai: Sir, I think what the Minister just said hits at the heart of our discussion today. When you want to uphold zero tolerance in money laundering, of course, you have to suppress the profit motive of the people involved, right?

Although the $1.45 billion does not belong to the bank, but the fact that $2.8 billion has been placed in our system and most of it is in the banking system. And now, the Minister has given me the information that $1.45 billion is still in the banking system at the moment. Maybe now, we have frozen the funds so the funds cannot be used by the banks anymore. But in the process of allowing these funds to come into our banking system, that is a huge amount of money the banks have made.

If we do not take away that amount of money, that means if we impose a fine on them equivalent to the amount of money that they have made – maybe that is not in line with international standards, then we can adjust it a bit – but in terms of the amount of money that we are talking about in this case that has come into our banking system, do you know how much money the banks potentially has been making?

You cannot say that these are two different issues. It reflects that the regulators do not appreciate that this is the way that the bank makes money, with this whole thing. I would like to clarify, is that what you are trying to say?

Mrs Josephine Teo: Sir, with all due respect to Mr Leong, I am still trying to figure out what exactly he is saying. Nobody disputes that our financial institutions have a responsibility to uphold the strict measures that we will take against money launderers. Nobody is saying that at all.

Nobody is also saying that if they were to breach their obligations, they should not be taken to task. In fact, what I have presented and what Minister of State Alvin Tan has presented point to the seriousness with which we hold the financial institutions to their obligations. I think that part is very clear.

What I seem to be hearing Mr Leong say is that, "Aha, you have found these amounts in your system. And therefore, it must point to some action on the part of the financial institutions in facilitating this, in helping to make this happen".

I am saying until we get to the bottom of things, this is not the right way to think about it. The correct way to think about it is that the entire machinery that we have put in place was able to uncover such a web.

I mentioned this earlier in my Statement and the response to some questions that were posed by Members – would we be happier if we had acted at an earlier stage in the investigations and then uncovered a smaller web? Or are we in the better position to have rooted out more of these activities?

We should continue to keep this number in perspective. It speaks to the strength of our system to be able to uncover these suspected criminal proceeds. That is what we must continue to strengthen. That is what this effort is all about.

Mr Speaker: Minister of State Tan.

Mr Alvin Tan: Sir, I just want to make a really strong point that if there is wrongdoing, we will be firm with them as we have done so in the past.

Fines are one, but we have invoked other measures, including banning financial institutions, revoking their licences, as well as holding senior management to task. There is a variety, there is a spectrum of it.

As what Minister Josephine Teo had mentioned earlier on, the investigations are ongoing; we cannot, and we ought not to prematurely attribute any guilt or offence to the banks prematurely until investigations have been completed.

But I want to assure the Member and assure Members of the House that we take firm action against errant banks, against errant financial institutions and against the senior management of financial institutions if they are found wanting and if they are found to have contravened our strict AML and CFT standards, which are, as I mention again, aligned with international standards and verified and assessed by FATF.

I think these are parameters we need to be aware of, and these are parameters that the financial institutions know. As I mentioned in my Ministerial Statement earlier on, it is a priority for MAS.

Mr Speaker: Mr Leong, if you have a new clarification, I will allow it but I will not allow any repeat of the same clarifications you have asked. Thank you.

Mr Leong Mun Wai: Sir, I have to clarify some of the things that the Minister has said.

Mr Speaker: Okay, go ahead.

Mr Leong Mun Wai: First of all, Speaker, Sir, I did not say that our banks have facilitated money laundering. The Minister has said something that bordered on that implication.

What I am saying is, with all the good intentions and measures that our banks have taken and MAS has asked our banks to take, we still landed with this case. We have to demonstrate to our gatekeepers – most of our gatekeepers are the banks – that they must do their job properly. They must continue to do their job properly.

In relation to the amount of money that has come into our system and the potential amount of profits that the banks can make from it, we must have penalties that are proportional to the potential profits that can be made if in the future, the verdict of the case has come out and it is demonstrated that some of the banks have been short on their AML measures. This is what I want to say.

What I take from the Minister today is that so far, only a few banks have —

Mr Speaker: Mr Leong, if you can get to your clarification, to the point.

Mr Leong Mun Wai: Yes. Only a few banks, we are very sure that they are at fault. But the other banks, we have to wait for the Court. That is what I get from the Minister. Because if that is not the case, then today, you can tell me what is the total fines imposed on our banks already. Am I right?

Mr Speaker: You may sit down, Mr Leong. Minister Teo.

Mrs Josephine Teo: Mr Speaker, to the specific question of how much fines have been levied on the banks, I think I made it quite clear to Mr Leong if he would like to know the figure, he may file a Parliamentary Question and we will address it.

I think it is not right for him to infer as to the involvement of the banks and financial institutions in this particular case. That conclusion cannot yet be drawn. The investigations are still ongoing. Nothing that Minister of State Alvin Tan or I said implicate the banks right now. We have only stated the facts about where the monies were found and how we seized them. That is all that we said.

It is not right for Mr Leong to infer in his last part of his clarifications.

I think it is helpful that he acknowledged that he may have misunderstood by saying that the banks were complicit. If that is his clarification, that he is not making a sweeping statement that our banks have been complicit, I think I welcome that clarification.

Mr Speaker: Mr Leong, if you would like to clarify Minister's clarification to you.

Mr Leong Mun Wai: Sir, yes. That is exactly what I was saying just now. I did not say our banks are complicit in this scheme. What I am saying is how our rules will play out in ensuring our system continues to be robust and more robust in the future.

What the Minister has said is that —

4.41 pm

Mr Speaker: Mr Leong, it is okay. You have addressed the Minister's clarification. So, that is fine. Any other final clarifications for the Ministers?

Order. End of Ministerial Statements. Introduction of Government Bills. Minister for Law.