25/09/23

FINANCIAL CRIME: Singapore's banking revamp following dirty money drama

As published on: cryptopolitan.com, Monday 25 September, 2023.

Singapore’s glitzy financial skyline is currently facing unprecedented scrutiny. Not for its high-rise buildings or posh real estate, but for the uncomfortable spotlight on a money-laundering scandal worth a staggering S$2.4 billion (US$1.8 billion).

While the nation is no stranger to large transactions given its status as an Asian financial hub, this scandal has caused an unmistakable ripple in the banking waters.

Heightened Vigilance is the New Normal

Despite boasting stringent anti-money laundering policies, Singapore’s financial institutions have recently become more fastidious. Wealth advisers, asset managers, and private bankers reveal that the waiting period for opening a private banking account has tripled in some cases.

Although this isn’t an official rule, it mirrors the intensified diligence measures taken up by the authorities since the illicit money drama surfaced in August.

Primarily, it’s no longer business as usual for clients from countries like China, Vanuatu, Turkey, St Kitts and Nevis, Dominica, Cyprus, and more.

The red flags are soaring high for customers with passports from these nations, especially if they hail from China or countries linked to the current investigation.

The root of this scrutiny? A money-laundering syndicate with ties to these nations, which was exposed recently.

A Multi-National Scandal

Last month’s arrest by the Singapore police of 10 individuals – all possessing Chinese passports – has only thickened the plot. The dragnet didn’t stop with individuals; banks, real estate agents, precious metal dealers, and even golf clubs have found themselves under the police scanner.

The unprecedented seizure of assets – think luxury properties, shimmering gold bars, and even designer handbags – has only intensified the media glare. While these individuals and their treasures have been cornered, the larger question looms – how did such a lapse occur under Singapore’s watch?

Singapore’s rise as a globally renowned wealth hub, especially during the COVID-19 pandemic, has been nothing short of meteoric. There was a whopping S$448 billion in net new fund inflows in 2021 alone, marking a 16% rise from the previous year.

Moreover, family offices in Singapore have seen a tenfold increase from 2018 to 2022. With great financial power, however, comes the need for greater responsibility.

Government’s Play: Prevention Over Cure

Taking cognizance of the entire fiasco, Singapore’s central bank, the Monetary Authority of Singapore (MAS), rolled up its sleeves.

In a confidential note to all financial entities, MAS mandated rigorous scrutiny for any dealings linked to the suspects. Several bigwigs of the banking world, like CIMB and Citigroup’s local branch, are already cooperating with the ongoing investigation.

While the central bank is unequivocally serious about the investigation, it is also looking at the larger picture – focusing on high net worth individuals and the massive transactions they bring to the table. It’s evident that for MAS, these dealings hold the potential for future risks.

Singapore’s banking industry, amidst all this chaos, is leaving no stone unturned. The emphasis on painstaking record checks, especially of new clients, is to ensure no links to entities on the MAS’s radar.

Interestingly, while these changes mean longer processing times and more stringent checks, not everyone seems to mind. Many clients view this as Singapore’s commitment to clamping down on any shady activities, solidifying its reputation as a mature, responsible financial hub.

In the grander scheme of things, it’s clear that this scandal is but a hiccup in Singapore’s otherwise stellar financial journey. Yet, it’s a loud and clear reminder that in the world of finance, diligence isn’t just a best practice – it’s the only way forward.

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Money Laundering Sinagpore