Mutual Evaluation - Ratings and Key findings

1. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 1
Anti-money laundering and counter-
terrorist financing (AML/CFT)
measures in Singapore
Fourth Round Mutual Evaluation
Key findings, ratings and priority actions
September 2016
www.fatf-gafi.org/publications/mutualevaluations/documents/mer-Singapore-2016.html

2. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
Ratings – Effectiveness (1/3)
2
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Singapore
has achieved
this objective
1. ML and TF risks are understood and, where appropriate,
actions co-ordinated domestically to combat ML and TF
Substantial
2. International co-operation delivers appropriate information,
financial intelligence, and evidence, and facilitates action
against criminals and their assets
Substantial
3. Supervisors appropriately supervise, monitor and regulate
financial institutions and designated non-financial
businesses and professions (DNFBPs) for compliance with
AML/CFT requirements commensurate with their risks.
Moderate
4. Financial institutions and DNFBPs adequately apply AML/CFT
preventive measures commensurate with their risks, and
report suspicious transactions.
Moderate

3. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 3
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Singapore
has achieved
this objective
5. Legal persons and arrangements are prevented from misuse
for money laundering or terrorist financing, and information
on their beneficial ownership is available to competent
authorities without impediments
Moderate
6. Financial intelligence and all other relevant information are
appropriately used by competent authorities for money
laundering and terrorist financing investigations.
Substantial
7. Money laundering offences and activities are investigated
and offenders are prosecuted and subject to effective,
proportionate and dissuasive sanctions
Moderate
8. Proceeds and instrumentalities of crime are confiscated. Moderate
Ratings – Effectiveness (2/3)

4. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 4
Immediate outcome of an effective system to combat money
laundering (ML) and terrorist financing (TF)
Extent to
which
Singapore
has achieved
this objective
9. Terrorist financing offences and activities are investigated
and persons who finance terrorism are prosecuted and
subject to effective, proportionate and dissuasive sanctions.
Low
10. Terrorists, terrorist organisations and terrorist financiers are
prevented from raising, moving and using funds, and from
abusing the non-profit sector.
Moderate
11. Persons and entities involved in the proliferation of weapons
of mass destruction are prevented from raising, moving and
using funds, consistent with the relevant United Nations
Security Council Resolutions.
Substantial
Ratings – Effectiveness (3/3)

5. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 5
Ratings – Effectiveness
14-Sep-2016
0
4
6
1
High
Substantial
Moderate
Low

6. 26-Sep-16
6
Ratings – technical compliance
(1/5)
AML/CFT POLICIES AND COORDINATION
1. Assessing risks & applying a risk-based approach LarLarLarLar Largely compliant
2. National cooperation and coordination ComCo ComCo Compliant
MONEY LAUNDERING AND CONFISCATION
3. Money laundering offence LarLarLarLar Largely compliant
4. Confiscation and provisional measures ComCo ComCo Compliant
TERRORIST FINANCING AND FINANCING OF PROLIFERATION
5. Terrorist financing offence LarLarLarLar Largely compliant
6. Targeted financial sanctions related to terrorism & terrorist
financing LarLarLarLar Largely compliant
7. Targeted financial sanctions related to proliferation LarLarLarLar Largely compliant
8. Non-profit organisations LarLarLarLar Largely compliant

7. 26-Sep-16
7
Ratings – technical compliance
(2/5)
PREVENTIVE MEASURES
9. Financial institution secrecy laws Co ComComCom Compliant
Customer due diligence and record keeping
10. Customer due diligence Co ComComCom Compliant
11. Record keeping Co ComComCom Compliant
Additional measures for specific customers and activities
12. Politically exposed persons Co ComComCom Compliant
13. Correspondent banking Co ComComCom Compliant
14. Money or value transfer services LarLarLarLar Largely compliant
15. New technologies Co ComComCom Compliant
16. Wire transfers Co ComComCom Compliant

8. 26-Sep-16
8
Ratings – technical compliance
(3/5)
PREVENTIVE MEASURES (continued)
Reliance, Controls and Financial Groups
17. Reliance on third parties Co Co Co Com Compliant
18. Internal controls and foreign branches and subsidiaries Co Co Co Com Compliant
19. Higher-risk countries LarLarLarLar Largely compliant
Reporting of suspicious transactions
20. Reporting of suspicious transactions LarLarLarLar Largely compliant
21. Tipping-off and confidentiality Co Co Co Com Compliant
Designated non-financial Businesses and Professions (DNFBPs)
22. DNFBPs: Customer due diligence Pa Pa Pa Par Partially compliant
23. DNFBPs: Other measures Pa Pa ParPar Partially compliant

9. 26-Sep-16
9
Ratings – technical compliance
(4/5)
TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL
PERSONS AND ARRANGEMENTS
24. Transparency and beneficial ownership of legal persons Pa Pa ParPa Partially compliant
25. Transparency and beneficial ownership of legal
arrangements ParPa ParPa Partially compliant
POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES
AND OTHER INSTITUTIONAL MEASURES
Regulation and Supervision
26. Regulation and supervision of financial institutions LarLarLarLar Largely compliant
27. Powers of supervisors ComCo ComCo Compliant
28. Regulation and supervision of DNFBPs ParPa ParPa Partially compliant
Operational and Law Enforcement
29. Financial intelligence units ComCo ComCo Compliant
30. Responsibilities of law enforcement and investigative
authorities Co Co ComCo Compliant
31. Powers of law enforcement and investigative authorities ComCo ComCo Compliant
32. Cash couriers ComCo ComCo Compliant

10. 26-Sep-16
10
Ratings – technical compliance
(5/5)
POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES
AND OTHER INSTITUTIONAL MEASURES (continued)
General Requirements
33. Statistics LarLarLarLar Largely compliant
34. Guidance and feedback LarLarLarLar Largely compliant
Sanctions
35. Sanctions ParParParPar Partially compliant
INTERNATIONAL COOPERATION
36. International instruments ComComComCom Compliant
37. Mutual legal assistance LarLarLarLar Largely compliant
38. Mutual legal assistance: freezing and confiscation LarLarLarLar Largely compliant
39. Extradition LarLarLarLar Largely compliant
40. Other forms of international cooperation LarLarLarLar Largely compliant

11. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016 11
Ratings – technical compliance
14-Sep-2016
18
16
6
0
Compliant
Largely compliant
Partially compliant
Non compliant

12. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
Key findings
 Singapore’s AML/CFT coordination is highly sophisticated
and inclusive of all relevant competent authorities.
Driven by the AML/CFT Steering Committee and the Inter-
Agency Committee, the coordination mechanism in
Singapore is a very valuable tool in AML/CFT policy
development. This proved to be true in the development of
the National Risk Assessment (NRA) and the cooperation
and organisation associated with this mutual evaluation
exercise. Singapore has a strong focus on law and order and
enforcement, which often result in dissuasive penalties.
1214-Sep-2016

13. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
Key findings
 Singapore has a reasonable understanding of its ML risks
and has taken steps to mitigate them. Nevertheless,
moderate gaps remain. In particular the nexus between
transnational threats, the inherent risks faced by Singapore
as one of the world’s largest financial centres, and
vulnerabilities within the system is not sufficiently
reflected in Singapore’s NRA.
14-Sep-2016 13

14. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
Key findings
 Singapore’s ability to proactively identify and address
serious foreign predicate ML, and transnational ML
networks will be strengthened with moderate
improvements in Singapore’s understanding of its foreign
predicate ML risks. Singapore provided information that it
was pursuing some complex cases involving transnational
fraud and corruption. However, Singapore has prosecuted
few foreign predicate ML cases outside of wire transfer
frauds involving money mules/shell companies, and has
confiscated low amounts of proceeds of crime. Singapore
has demonstrated that it has a general understanding of its
TF risks. But the weighting placed in the risk methodology
on indicators derived from reported incidences in Singapore
has somewhat hindered Singapore’s ability to appreciate
the inherent TF risks associated to its geographical location
and its status as a global financial centre.
1414-Sep-2016

15. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
Key findings
 Singapore’s FIU, the Suspicious Transactions Reporting
Office (STRO), uses well-functioning systems and
coordination mechanisms to integrate FIU information
into LEA processes. Singapore’s primary investigative
agencies routinely make significant use of STRs at early
stages of ML and predicate investigations. While financial
intelligence information is provided to other agencies, they
are yet to make significant use of such information to
support investigation. STRs relating to TF, while routinely
disclosed to the Internal Security Department (ISD), have
not resulted in any criminal investigations.
1514-Sep-2016

16. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
Key findings
 Singapore’s FIs generally demonstrated a reasonably
good understanding of ML risks impacting Singapore
domestic clients, but a less developed understanding of
the risk of illicit flows into and out of Singapore.
FIs and especially DNFBPs had a less mature
understanding of TF risks, and often failed to
distinguish between terrorism and TF risks.
Overall, there is a significant difference in the level of
understanding of the ML/TF risks between the
financial sector and DNFBP sector, therefore limiting
DNFBPs’ ability to develop a comprehensive risk
understanding.
1614-Sep-2016

17. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
Key findings
 For most FIs, AML/CFT supervision appears robust, with a
variety of off-site factors examined and comprehensive
on-site examinations/follow-up being conducted.
Singapore has recently extended AML/CFT supervision to
most types of DNFBPs, but there are significant differences
in effective supervision of AML/CFT requirements between
relevant supervisory bodies. While Singapore has a range of
remedial measures that it can impose on FIs, the financial
penalty structure across the DNFBP sector is quite diverse
and concerns exist about the differences in approach in
terms of dissuasiveness and proportionality. Apart from the
casino and TSP sectors, sanctions for non-compliance by
DNFBPs have not been tested.
1714-Sep-2016

18. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
 Singapore has not undertaken an adequate ML/TF risk
assessment of all forms of legal persons and legal
arrangements. Authorities however acknowledge that
legal persons and arrangements created in Singapore,
and those registered or operating in Singapore from
foreign jurisdictions, can be used to facilitate predicate
crimes and ML/TF offences. Singapore has implemented
some preventive measures designed to prevent the
misuse of legal persons and arrangements for ML and
TF, including the collection of beneficial ownership
information by FIs and DNFBPs. However, in practice,
some DNFPBs do face challenges in obtaining
beneficial ownership information.
14-Sep-2016 18
Key findings

19. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
 On international cooperation, Singapore provides
constructive and high quality information and assistance
when requested, but faced occasional challenges
executing some MLA requests in a timely manner.
Although few outgoing MLA requests were made prior to
2015, Singapore has taken steps to increase outgoing MLA
requests in 2015, more than doubling the entire number of
MLA requests in the previous 3 years. Singapore also uses
informal channels and the LEAs, FIU and financial
supervisors are generally well engaged in making and
receiving requests where permitted. Singapore shares
domestically available beneficial ownership information for
legal persons and legal arrangements, however there is
limited information available under the domestic
framework.
14-Sep-2016 19
Key findings

20. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
Priority Actions for Singapore to
strengthen its AML/CFT System
 Singapore should conduct comprehensive ML and TF
risk assessments for all types of legal persons (private
companies, public companies, foreign companies,
etc.) to identify where the risks are and develop
policy to address those risks.
 Singapore should ensure effective supervision for
AML/CFT across all categories of DNFBPs through risk-
based, targeted and prioritised outreach to and
inspections of the non-financial professions, and
extend AML/CFT supervision to all PSMDs. Singapore
should also increase the level of communication and
information sharing by competent authorities and
SRBs to ensure a better understanding of the ML/TF
risks by the DNFBP sector.
2014-Sep-2016

21. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
Priority Actions for Singapore to
strengthen its AML/CFT System
 Financial sector supervisors should continue dialogue with
the FIs to promote a better understanding of ML and TF
risks, and more closely target supervisory activity to ML/TF
risks.
 Singapore should take steps to improve the capability of its
LEAs to proactively identify and investigate ML, particularly
complex and foreign predicate ML. Singapore should pursue
more offenders involved in the laundering of foreign
proceeds of crime in addition to the current focus on
pursuing money mules and shell companies.
2114-Sep-2016

22. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
Priority Actions for Singapore to
strengthen its AML/CFT System
 LEAs should more proactively pursue the confiscation of
proceeds of crime and make greater use of the seizure and
confiscation powers in the Corruption, Drug Trafficking and other
Serious Crimes (Confiscation of Benefits) Act (CDSA) to pursue
proceeds of crime that are not directly linked to offences being
prosecuted.
 The next round of Singapore’s NRA should better articulate the
nexus between key threats and vulnerabilities to promote a
deeper understanding of how the ML/TF risks faced by Singapore
will materialise in Singapore’s context. In particular, this analysis
should take into consideration Singapore’s geographic location
and role in the international economy, and deal more specifically
with the ML threats to the financial sector in the context of
Singapore’s position as a financial centre.
2214-Sep-2016

23. Anti-money laundering and counter-terrorist financing measures in Singapore – Mutual Evaluation Report – September 2016
 Singapore should conduct a comprehensive sector review to
better understand the types of organisations within the
NPO sector that are inherently vulnerable to TF abuse and
continue outreach to NPOs to raise awareness of specific TF
abuse risks.
 Singapore should continue to use MLA to follow and
restrain assets that have moved to other jurisdictions, and
to pursue the people involved and improve response times
in responding to foreign requests.
 Given Singapore’s status as a global trade, finance and
transportation hub, the FIU should seek to obtain additional
strategic information sources, such as international
electronic fund transfer reports and trade data, to
complement existing reports that provide insight into
international ML/TF threats.14-Sep-2016 23
Priority Actions for Singapore to
strengthen its AML/CFT System