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$1.8b money laundering probe sparked by suspicious transaction reports, not external pressure, says Shanmugam

$1.8b money laundering probe sparked by suspicious transaction reports, not external pressure, says Shanmugam
The probe into the money laundering case had been going on for months, said Home Affairs and Law Minister K. Shanmugam.
PHOTO: The Straits Times

SINGAPORE – Investigations into the billion dollar money laundering case here did not arise from external pressure and were triggered by suspicious transaction reports (STRs) filed by financial institutions, said Home Affairs and Law Minister K. Shanmugam, stressing that the probe had been ongoing for months.

That the authorities took action right away when they became aware of the facts sends a clear signal that Singapore is a reputable financial centre that will act against people who try to launder money here, he added.

He said this in an exclusive interview published in Chinese newspaper Lianhe Zaobao on Sunday.

“The key point is that we identified and took action against a sizeable network and seized a very large amount of assets. What message does it send?” he said.

“It sends a clear message that we will act firmly against these kinds of illegal activities in Singapore.” 

The investigations came to light in August, after police arrested 10 foreigners – nine men and one woman, aged between 31 and 44 – following an islandwide raid by more than 400 officers led by the Commercial Affairs Department (CAD).

The police have taken control of more than $1.8 billion in assets, raising eyebrows and questions over how the 10 had managed to accumulate so much.

Probe not triggered by China

Quashing speculation among some that the arrests were linked to a visit by China’s Foreign Minister Wang Yi on Aug 10, Mr Shanmugam said there was absolutely no connection between the two events.

“We started the investigations because we had reason to believe that these people had committed offences in Singapore,” he said.

“We didn’t start the investigations at the request of some foreign country or party or because of external pressure.”

He added that Singapore does not yield to pressure from any country.

“Just because a country says arrest so-and-so doesn’t mean we go and arrest. It’s got to be illegal in Singapore. We need to be satisfied and we need to know that things have happened which are contrary to our laws, then we will take action – regardless of what others say,” he said.


In fact, the probe had been going on for months, with the police having to trace any illegal activity here and overseas as well as those involved and the flow of funds, he added.

In this case, the police started looking into the matter based on suspicious transaction reports filed by financial institutions, as well as intelligence and other pieces of information. 

There was no way that tracing such investigations could have been done in a matter of days or weeks, and those familiar with such work would know, he added.

No action if money is clean

That the 10 arrested are believed to have originated from China also spooked some other Chinese nationals in Singapore, worried about being implicated.

Responding to Lianhe Zaobao’s query on this, Mr Shanmugam said those with proper, legitimate businesses who are bringing in legitimate money need not worry.

As a major financial hub, Singapore has seen inflow of huge amounts of money over many years, whether it is brought in by Chinese, Southeast Asians, Europeans or Americans, he noted.

“Action hasn’t been taken in respect of a lot of other money,” he said.

In this case, the group of 10 are suspected to be involved in organised crime overseas, including scams and illegal online gambling, and are suspected of trying to launder the proceeds of those crimes in Singapore, he added.

“So the basic point is this: if you do anything illegal in Singapore, like forge documents or commit crimes, or do illegal things overseas and then try to launder your criminal proceeds here, action will be taken,” he said.

“But if you have a proper, legitimate business and you bring in legitimate money here and don’t break our laws like forging documents – there is nothing to worry about.”

Courts will decide how assets are dealt with

Police seized more than $23 million in cash and hundreds of luxury items, and issued prohibition of disposal orders on dozens of cars and multiple bottles of liquor and wine.  PHOTOS: SINGAPORE POLICE FORCE

Mr Shanmugam was also asked about how the assets will be dealt with once the court case is concluded, and said it will be handled similarly to other cases which involve seizure of assets.

Ultimately, the courts have the final say, he added.

For now, the assets are in police custody, based on standard procedures set out in the law. If the 10 are found guilty, and the assets are traced to criminal activities, the courts will have to determine how the assets will be dealt with, he said.

On what will happen to the 10 foreigners once they are convicted and sentenced, Mr Shanmugam said they will have to serve the sentence, and after that “supposing it’s a custodial sentence... he or she may be deported out of Singapore to wherever the passport will allow the person to go”.

But he added that if there is an extradition request from a country which has such a treaty with Singapore, then the authorities here will comply with the agreement.

Robust anti-money laundering controls

Mr Shanmugam said Singapore has put in place a robust, comprehensive anti-money laundering framework, including taking in international best practices.

The first line of defence in this whole-of-economy effort is the Monetary Authority of Singapore and the financial institutions, he added. Other gatekeepers such as real estate agents, precious commodities dealers and their regulators also have a role to play in guarding Singapore against illicit funds.

“Our laws make it a duty for anyone – including, bankers, property developers – to report suspicious transactions,” he said.

He added that the Financial Action Task Force (FATF), a global body that sets the standards and oversees efforts to combat money laundering and financing of terrorism, had assessed Singapore’s legal and institutional framework before the money-laundering syndicate bust, and concluded that it is robust.

Among the conclusions of the FATF is that Singapore has strong licensing controls, strong detection and supervision, good coordination between agencies, good sharing of data and financial intelligence, and swift and firm law enforcement when criminal activities are uncovered, he said.

Despite this, it does not mean that people will not try to launder money here, he acknowledged.

“They will try. You have to be alert, try and pick it up and deal with it. I would say the fact that we took such action in this case actually enhances our reputation,” he said.

“There are many international financial centres... (and) there are trillions of dollars floating around the world. Not all of it is clean,” he added.

“How many times have you seen such action being taken?”


Must stay open as financial hub

The financial services sector here accounts for 14 per cent of Singapore’s gross domestic product, employs about 200,000 people, and affects growth in other sectors, he noted.

Given this, it is important to ensure that Singapore “upholds its reputation as a place with trusted, sound regulation, good governance, strong rule of law” while staying open, he said.

Singapore cannot afford to close the window to its financial centre as this would mean that even legitimate funds will be kept out, he added.

This also means that some criminals will try their luck by mixing illegal transactions with legitimate ones to evade detection, he said, noting this happens in financial centres all over the world, such as in London, Hong Kong and Australia.

“And inevitably, when you are a major financial centre, a lot of money comes in, some `flies’ will also come in... But everyone, not just us, has to do our best,” he said.

This article was first published in The Straits Times. Permission required for reproduction.

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