Singapore to Toughen Money Laundering, Terrorist Financing Laws

Oct. 27 (Bloomberg) — Singapore, where assets under management have risen fivefold to $1.2 trillion since 2001, said it will consider a “tougher penalty regime” and boost enforcement against money laundering and terrorist financing.

The city-state will also make laundering of proceeds from tax offences a crime, and tighten laws on tax evasion, said Ravi Menon, managing director of Monetary Authority of Singapore, the country’s central bank.

“We will ensure that financial crime does not pay in Singapore and those who jeopardize Singapore’s hard-earned reputation as a financial center of integrity face severe consequence,” Menon said in a speech late today received by e- mail. “Singapore is sending a clear message that it neither wants nor will tolerate these illicit inflows.”

The Asian nation, which has the highest proportion of millionaires of any place in the world and with economic growth of 14.5 percent last year boosted by two new casinos, was criticized in a March U.S. State Department report as being vulnerable to money launderers.

Singapore, where bank deposits for foreigners and gains from investments including equities are tax-exempt, has pledged to comply with international standards and was dropped from the Organization of Economic Co-operation and Development’s so- called gray list in 2009.

The Commercial Affairs Department, or the city-state’s white-collar crime unit, will also double its employees for the monitoring of suspicious financial transactions to detect criminal activity, Menon said.

Tougher Penalties

The central banker’s comments come about a month after Singapore Attorney General Sundaresh Menon said he will seek tougher penalties for white-collar criminals and co-operate more with global agencies to deter money laundering and tax evasion.

The city-state is also considering the use of deferred prosecution, the attorney general said, referring to a commonly- used method in the U.S. under which defendants who agree to cooperate with investigators, pay fines or implement corporate reforms have charges against them dismissed if they fully comply.

Money-laundering convictions in Singapore have climbed to an average of 21 a year from 2008 to 2010 compared with four between 2000 to 2007, according to the Financial Action Task Force, a Paris-based watchdog. Hong Kong had 360 money- laundering convictions in 2010, compared with 179 in 2007.

“Tales of large inflows of funds from Europe into Singapore are vastly exaggerated,” said Menon from the central bank, adding that the growth of the city’s private banking industry was spurred by wealth generated from Asia’s economic growth.

–Editors: Linus Chua, Shamim Adam

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