Reply to PQ on Money Laundering
Question No. 689 and 690
Notice Paper No. 182 of 2004
For Oral Answer
Date: For Parliament Sitting on 19 October 2004
Name and Constituency of Member of Parliament
Q689 & 690, Mdm Halimah Yacob, MP for Jurong GRC
To ask the Senior Minister whether there is any basis for the US State Department's allegation that Singapore is a major money laundering country.
Note: The above Question was originally directed to the Prime Minister and Minister for Finance (vide Q.*689 in Notice Paper No. 182 of 2004).
To ask the Senior Minister (a) whether there are sufficient safeguards to prevent money laundering and terrorist financing activities; and (b) how does the Monetary Authority of Singapore ensure that banks fully comply with such measures.
Note: The above Question was originally directed to the Prime Minister and Minister for Finance (vide Q.*690 in Notice Paper No. 182 of 2004).
1 The US State Department's International Narcotics Control Strategy Report for 2003, which was released on 1 March 2004, listed a range of jurisdictions as being of primary concern in respect of money laundering from international narcotics trafficking and other serious crimes. Singapore was included in that list together with the UK, France, Germany, Hong Kong, Italy, Japan, Luxembourg, Switzerland, as well as the US itself. In short, all the major financial centres of the world were included in the list.
2 The US State Department Report did not provide any basis for suggesting that Singapore-based financial institutions engage in transactions involving significant amount of proceeds from international narcotics trafficking and other serious crimes.
3 However, money laundering must be a concern in every country, and especially in international financial centres which handle huge volumes of transactions on a daily basis. Singapore takes its responsibilities very seriously in this regard. We are a member of the Financial Action Task Force (FATF), the international body that develops policies and standards to combat money laundering and terrorist financing. The US State Department's Report indeed acknowledges that Singapore strongly opposes money laundering and terrorism financing and has been a key player in the regional effort to stop terrorist financing in Southeast Asia.
4 MAS requires all banks and financial institutions operating in Singapore to institute rigorous measures to guard against money-laundering and terrorist financing. These include the need to identify and know their customers and their customers' source of funds. They also have to maintain the records necessary to reconstruct and explain details of transactions, and to report all suspicious transactions. MAS conducts both offsite reviews and onsite inspections of banks and financial institutions to ensure that these measures are in place. External auditors engaged by banks and financial institutions are similarly required to audit for compliance with MAS regulations. Through these rigorous processes, banks have identified and filed suspicious transaction reports with the Commercial Affairs Department (CAD). CAD investigates these reports and where it finds wrongdoing, it will take firm action.
5 In August 2003, Singapore completed its IMF/World Bank Financial Sector Assessment Programme. The team of assessors found that Singapore has a comprehensive legal, institutional, policy and supervisory framework to combat money laundering and terrorism financing. They also noted that our financial institutions have a strong compliance culture for requirements to combat money laundering and terrorist financing.
6 Singapore will stay fully committed to the international effort against money laundering and terrorist financing. Our high regulatory and supervisory standards are recognized internationally. The integrity of our financial sector is a key asset which we intend to preserve.