Banks not a big worry, but watch other sectors

Banks not a big worry, but watch other sectors

Mr Raymond Koh Bock Swi asked how robust our anti-money laundering laws are (“Are we well equipped to fight money laundering?”; last Thursday).

The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) criminalises money laundering in Singapore.

The Financial Action Task Force (FATF), a global body that polices against money laundering and terrorist financing activities around the world, is satisfied with this law. Singapore is the only Asean country qualified to be a member of this task force.

Mr Koh also asked how closely banks operating in Singapore are complying with the law.

All banks in Singapore must comply with the CDSA, as well as the Monetary Authority of Singapore’s (MAS) anti-money laundering rules and regulations.

The MAS rules require all banks to establish comprehensive customer due diligence policies and procedures to combat money laundering (and terrorist financing) activities in their day-to-day operations. The FATF is also similarly satisfied with the MAS’ rules on money laundering.

Mr Koh also wanted to know if banks are fully equipped to check and clear every customer of any associated risk of money laundering. The answer is “yes”, but no bank in the world can guarantee that every customer is not tainted with money-laundering activities.

One can expect only mitigation, and not total eradication of money laundering, because sophisticated customers who engage in these activities are smart and employ professionals to structure their activities to avoid detection.

The MAS conducts regular inspections to ensure the banks comply with the rules. In extreme cases, the MAS can even revoke a bank’s licence if it refuses to comply. The FATF also conducts its checks on banks here on its routine evaluative visits.

Having trained many bank staff in South-east Asia over the past 20 years, I have found Singapore banks to be the most compliant, because we have a no-nonsense and robust regulator.

My concern lies not with the banks, but with weaker sectors, for instance, the real estate sector, as alluded to by Mr Koh. However, I am glad the regulator is now enforcing anti-money laundering controls on real estate agents in Singapore.


This article was first published on June 4, 2015.
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