SINGAPORE- Singapore faces greater money laundering and terrorism financing risks than other countries because it is an international finance and business hub, Prime Minister Lawrence Wong on Wednesday told a meeting of a global financial crime body.
“But we are determined to do what is needed to respond to these risks and safeguard Singapore’s reputation as a trusted financial center,” said Wong, who is also Singapore’s finance minister, at a Financial Action Task Force (FATF) event.
FATF is a global money laundering and terrorism financing watchdog. Singapore currently holds a two-year FATF presidency until June 30.
On Wednesday, Singapore published a national asset recovery strategy report as part of its efforts to enhance its anti-money laundering (AML) and terrorism financing framework.
“Asset recovery is one of the key priorities of our AML regime,” the home affairs ministry, the finance ministry and the central bank said in the 32-page report.
“We seek to deprive criminals of their illicit gains, thereby removing the financial incentive for laundering their monies in Singapore,” they said in the report.
“We also seek to provide recourse to victims of crime by helping them to recover property and assets lost to criminal activities,” they added.
Between January 2019 and June 2024, Singapore seized S$6 billion ($4.4 billion) linked to criminal and money laundering activities, according to the report.
Out of that amount, S$416 million has been returned to the victims, and S$1 billion has been forfeited to the state, the report said, while the large bulk of the remainder is linked to ongoing investigations or court proceedings.
Last week, Singapore highlighted in a risk assessment report that its banking sector, including wealth management, posed the highest money laundering risk in the city-state.
Singapore last year busted a $2.24 billion money laundering ring run by foreigners, with the last of 10 offenders sentenced on June 10. Those involved had held money in bank accounts in Singapore and converted some into real estate, cars, handbags and jewelry.
With its status as an international financial hub, tax-friendly regime and seen as politically stable, Singapore has long been a haven for ultra-rich foreigners.
It has seen a fresh influx of wealth since 2021 after it became one of the first Asian cities to significantly ease pandemic restrictions.
The number of family offices or one-stop firms that manage the portfolios of the wealthy in the city-state rose to around 1,400 last year from 1,100 a year earlier and around 700 at end-2021, according to government statistics.
Singapore’s economy grew 2.7 percent year-on-year in the first quarter of 2024, the quickest pace in 18 months, data showed as the government said it expected manufacturing and trade-related sectors to improve over the course of 2024.
The growth matched a preliminary estimate released last month and was stronger than the 2.5 percent forecast by economists in a Reuters poll. It was the fastest pace since the economy grew 4.1 percent on a year-on-year basis in the third quarter of 2022.
Edward Robinson, deputy managing director of the economic policy group at the Monetary Authority of Singapore (MAS), said after the data that current monetary policy settings were appropriate.
“The prevailing rate of appreciation of the exchange policy band is needed to keep a restraining effect on imported inflation as well as domestic cost pressures,” he said at a media briefing.
“We had assessed it to be sufficient to ensure medium-term price stability in the economy.”
Separate data showed annual core inflation came in at 3.1 percent in April, matching the rate in March.
The core rate is expected to gradually moderate before a more discernable step down in the fourth quarter, the MAS and Trade Ministry said. Both core and headline inflation were expected to average between 2.5 percent and 3.5 percent this year. The central bank left monetary policy settings unchanged at a policy review in April. The next policy review is due in July.
While inflation has fallen from its peak of 5.5 percent in early 2023, it remains stubborn amid slowing economic growth and had reached a seven-month high in February.
On a quarter-on-quarter seasonally adjusted basis, GDP expanded 0.1 percent in the January to March period, in line with the preliminary estimate.
