Regulators' Response to Recent Reports on Local Banks' Involvement in Suspicious Transactions and Money Laundering

101 Mr Alex Yam asked the Prime Minister with regard to the recent document leaks from the US Financial Crimes Network (a) whether any banks in Singapore are implicated in the money laundering activities; and (b) whether the Government is in touch with the banks named to verify any Singapore connection.

102 Mr Desmond Choo asked the Prime Minister in view of the recent assertions by the International Consortium of Investigative Journalists that a number of banks in Singapore had handled large sums of suspicious transactions (a) how will MAS address the assertions with the banks; and (b) what have been the efforts to enhance our work against suspicious transactions and money laundering.

Mr Tharman Shanmugaratnam (for the Prime Minister): The Members' questions arose from the leaked reports of the US Financial Crimes Enforcement Network, or FinCEN.

Let me explain what these leaked reports are about. Suspicious Transaction Reports (STRs) are filed by financial institutions if they have reason to suspect that a financial transaction could be related to a crime. The reasons for suspicion may be due to an adverse media story on the customer, or the customer not providing a good explanation for an unusually large transaction. FinCEN receives a large number of STRs on an ongoing basis – 2.75 million in 2019.

The leaked reports mentioned in the media articles were filed with FinCEN by banks in the US, involving transactions with banks in almost every country in the world. To be clear, STRs are not in themselves evidence of money laundering. In fact, most STRs are eventually not found to be connected to criminal activities or money laundering.

Notwithstanding, MAS is reviewing the information on the leaked STRs to determine if our banks had appropriately detected suspicious transactions, taken timely action to mitigate the risk, and made the necessary filings to the Commercial Affairs Department. If any bank is found to have weaknesses in anti-money laundering controls, MAS will direct it to rectify them promptly. If there has been a breach of Singapore’s anti-money laundering requirements, MAS will take enforcement action.

Mr Desmond Choo also asked a broader question on how Singapore is combating money laundering and other financial crimes. I note that Ms Foo Mee Har has also raised a similar question for a later Sitting.

The Financial Action Task Force (FATF) has assessed that Singapore’s regulatory framework for combating money laundering is fully aligned with international standards, and that MAS supervision of the financial sector is robust.

For financial institutions at higher risk of being exposed to money laundering, MAS takes a more intrusive approach. MAS directs the financial institutions to take remedial actions, and ensures they report on their implementation of the measures.

As I just mentioned, when financial institutions are in breach of our anti-money laundering requirements, MAS will take firm enforcement actions. These include financial penalties, prohibition orders, public reprimands, and revocation of licenses. MAS has published enforcement actions in connection with serious cases, to send a strong deterrent signal.

MAS and CAD are continually improving their methods of detection. This includes deploying technologies such as network analytics to uncover well-concealed criminal networks with complicated layers of entities and persons. They have also established partnerships with key financial institutions in Singapore to share information on common and emerging criminal typologies. Building trusted relationships with the private sector further enables case-specific intelligence to be shared among the relevant financial institutions.

Further, we leverage international cooperation in combating such crime. Singapore has been playing an active role at the FATF to shape international anti-money laundering standards. We have built strong working relationships with all the leading foreign jurisdictions, enabling proactive sharing of intelligence, joint investigations, and supervisory cooperation.

I would like to assure this House that Singapore agencies are vigilant against money laundering risks, and MAS is working closely with financial institutions to continually strengthen our safeguards against these risks.