Singapore’s dirty money clean-up: US$2 billion laundering scandal prompts reforms

The city state’s new asset recovery strategy is an important piece of the puzzle – but more can be done, experts say

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Commercial buildings in the central business district of Singapore at night. The city state ranks ahead of rival Asian hubs for low money laundering and terrorist financing risks. Photo: Bloomberg

Published: 7:18pm, 28 Jun 2024

Singapore has rolled out a raft of measures to enhance its anti-money-laundering regime in recent months after a S$3 billion (US$2.2 billion) case involving 10 foreign nationals prompted critics to question the city state’s squeaky clean reputation.

On Wednesday, Prime Minister Lawrence Wong unveiled Singapore’s first National Asset Recovery Strategy detailing its approach to seizing unlawful proceeds and handling the confiscation or restitution of associated holdings.

Experts told This Week In Asia that the strategy was an important piece of the puzzle in combating money laundering, but said the country could improve implementation, particularly in overseeing non-financial sectors such as real estate, precious stones and metals.

Wong, who is also finance minister, recognises that Singapore faces greater money-laundering and terrorism-financing risks as a global financial and business hub. “But we are determined to do what is needed to respond to these risks and safeguard Singapore’s reputation as a trusted financial centre,” he said on Wednesday.

Foreign direct investment inflows to Singapore hit a record high of US$141.2 billion in 2022, up from US$131.1 billion in 2021, according to UN figures. This made the city state the third-largest FDI recipient worldwide after the United States and China.

Singapore dollar banknotes. From January 2019 to June this year, Singapore confiscated S$6 billion (US$4.4 billion) connected to illicit activities. Photo: EPA-EFE

The new asset recovery strategy includes legal provisions empowering authorities to petition courts to sell seized, rapidly depreciating goods or high-maintenance assets even before conviction, such as fine art, antiques, investment-grade wine, vessels, exotic livestock like fish and reptiles, and racehorses.