SINGAPORE: Individuals and companies involved in money laundering and terrorism financing will face stiffer penalties, after Parliament passed the Serious Crimes and Counter Terrorism (Miscellaneous Amendments) Bill on Monday (Nov 19).
As such crimes can destroy the country's reputation as a trusted global financial centre or lead to terrorist attacks, Singapore is strongly committed to combating these threats and making sure they do not take root here, said Second Minister for Home Affairs Josephine Teo.
“With banking and financial systems going digital, monies can now be swiftly transferred between persons and across borders with minimum hassle. This opens up more channels to launder illicit funds and support terrorist activities,” she said.
“The growing volume and complexity of financial transactions also make it harder for regulators to detect offences.”
In the last five years, there were about 70 convictions each year for money laundering, while in 2016, six foreign nationals were convicted for terrorism financing.
Mrs Teo said the Government is concerned with two groups exposed to the risk of money laundering and terrorism financing: Corporations and professional service providers, as well as money mules in Singapore.
INCREASING OF PENALTIES
For the first group, the maximum penalty for a money laundering or terrorism financing offence committed by an entity will be raised from S$1 million to the higher of S$1 million or twice the value of the property, financial service or financial transaction involved.
The maximum penalty for failing to file a Suspicious Transaction Report will also be raised from a maximum fine of S$20,000 to S$250,000 and/or up to three years’ jail if the offender is an individual, and a maximum fine of S$500,000 for corporations.
Under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), a person is required to report to the Suspicious Transaction Reporting Office when he knows or has reason to believe that a property is linked to criminal conduct, and comes across such information in the course of his work.
Mrs Teo said the current penalties for not doing so are “manifestly low”, pointing out that they are not sufficient as a deterrent given the vast sums of money involved in such crimes.
For example, she highlighted the example of a property agent who was fined this year for not filing a Suspicious Transaction Report (STR) after finding out that his client was linked to a foreign Ponzi scheme.
The client had wanted to buy a property at Sentosa Cove and had the sale gone through, the agent’s commission would have been in the “range of hundreds of thousands”.
“Such reporting is critical to our ability to enforce against money laundering and other crimes, as law enforcement agencies rely heavily on such intelligence to initiate and support investigations,” Mrs Teo added.
Meanwhile, the maximum fine for tipping off on any investigations under the CDSA or any disclosure made to the Suspicious Transactions Reporting Officer will also be raised from S$30,000 to S$250,000.
As for money mules, the amendments will criminalise an accused’s possession or use of property “which would be suspected by a reasonable person of being benefits from criminal conduct, if the accused cannot satisfactorily explain how he came by the property”.
The maximum penalties for this new offence are a S$150,000 fine and/or three years’ jail for individuals.
Mrs Teo said this will help investigators tackle complex money laundering operations involving multiple money mules that make it difficult for the crime proceeds to be traced to their original source.
“Under our current laws, the prosecution must prove that these money mules know the monies are linked to criminal conduct,” she added. “This is challenging, especially against mules trained to claim ignorance.
“Some money mules are even trained not to make any admission during police investigations, and taught to destroy evidence by deleting handphone messages.”
ASSISTANCE FROM ABROAD
The CDSA will also be amended to make it easier to prosecute money laundering linked to overseas crimes.
For example, the courts can now decide based on evidence presented by the prosecution that an offence had been committed overseas, without having to rely on foreign governments or experts.
Currently, the law requires prosecutors to obtain a certificate from the foreign government or a testimony from a legal expert in the country to show that an offence had been committed.
This is “not ideal” as getting the certificate could take some time, while engaging an expert is costly, Mrs Teo said.
Another amendment makes it easier for Singapore to exchange financial intelligence with overseas authorities.
“As money laundering offences are often transnational, the exchange of financial intelligence between jurisdictions is critical to support the investigation of these cases,” Mrs Teo said.
Member of Parliament (MP) for Holland-Bukit Timah GRC Christopher de Souza described the Bill as timely, saying it is easier to launder money now due to advances in technology.
“The present and rapid advancement of technology has facilitated the exchanging of cash for virtual currency and vice versa,” he said. “Technology has also enabled transactions and transfers to be done from almost anywhere.”
But MP for Bukit Batok Murali Pillai said the amendments could have had “more bite” by allowing civil seizure and confiscation provisions prior to or in parallel with criminal proceedings.
Currently, a public prosecutor can apply to court for a confiscation order against any monies that a person has moved in or out of Singapore. However, this only applies after the accused has been convicted of the offence, he said.
“By then, it may be too late as the monies may have been dissipated by the accused,” he said.
Mr Murali gave the example of the United States, which currently has a civil forfeiture regime that allows law enforcement officers to seize assets from those suspected of involvement with crime, without necessarily charging them with wrongdoing.
However, Mrs Teo said Singapore’s laws already have “several mechanisms to seize, restraint and confiscate” the property of criminals. This includes allowing the police to seize property during investigations if it is suspected to be linked to a criminal offence.
While there is currently “no need” for a civil confiscation regime under the CDSA, Mrs Teo added that it is a matter which the Ministry of Home Affairs will review.
Workers’ Party MP Sylvia Lim also asked for the Government’s assessment of the efficacy of both the CDSA and Terrorism (Suppression of Financing) Act (TSOFA).
In response, Mrs Teo revealed that from 2013 to 2017, the number of STRs filed increased “significantly” from 22,000 to 35,000.
“The increase in STRs filed over the past few years suggests that the different sectors are increasingly aware of their anti-money laundering and countering the financing of terrorism obligations,” she said.