The financial regulator has outlined Singapore's anti-money laundering regime after an unfolding scandal at 1Malaysia Development Bhd (1MDB) put the private banking industry here in the spotlight.
The Monetary Authority of Singapore (MAS) said yesterday in a statement: "Singapore is firmly committed to maintaining its status as a clean and trusted financial centre. It has no tolerance for its financial system to be used as a refuge or conduit for illicit fund flows."
Its comments follow a Wall Street Journal report earlier this month that said Malaysian investigators following a paper trail from the debt-ridden state investment fund had traced US$681 million ($924 million) to what they believe are the personal bank accounts of Malaysian Prime Minister Najib Razak.
The transfers were made via the Singapore branch of Switzerland's Falcon Private Bank in March 2013.
The MAS has said that it is cooperating with the Malaysian authorities on the investigation.
As Singapore grows as a wealth-management hub, it has received occasional criticism from international regulators who see the country as being vulnerable to money launderers and tax cheats.
Singapore has tightened anti- money laundering rules over the years. In July 2013, it made it
a money laundering predicate offence for a bank to help tax dodgers hide their funds.
Financial institutions here must monitor and report any suspicious transactions, the MAS said yesterday. The regulator also conducts regular on-site inspections to ensure that these firms comply with its anti-money laundering rules.
The MAS could not comment on the ongoing investigations into Falcon Private Bank, but said that it had conducted 83 anti-money laundering and terrorism financing inspections covering a range of financial institutions between April 2013 and March 2014.
It issued nine supervisory warnings and reprimands, restricted the operations of six financial institutions, revoked the licences of two remittance agents and fined five financial institutions for breaches.
Singapore is also a member of the Financial Action Task Force, a global body that polices money laundering. The task force is scheduled to visit Singapore later this year for a routine round of mutual evaluations.
The last country to be evaluated by the task force was Australia. Its report in April noted that Australia needed to tighten safeguards against money laundering in its property market, seen as a hot destination for Chinese funds with likely links to corruption.
In Singapore, anti-money laundering measures extend beyond the financial sector to other sectors, including real estate agents, lawyers and accountants.
Last year, a multi-agency committee put out a report detailing the findings of a nationwide exercise that assessed money-laundering risks across sectors.
This article was first published on July 16, 2015.
Get a copy of The Straits Times or go to straitstimes.com for more stories.