SINGAPORE: Singapore’s role as a major trading hub has heightened its exposure to money-laundering risks, according to Rory Doyle, head of financial crime policy at Fenergo, as reported by the Financial Times. The comment follows revelations that individuals and companies in Singapore were linked to Cambodia’s Prince Holding Group, prompting renewed scrutiny of the city-state’s vulnerability to transnational crime networks.
Mr Doyle added that criminals who don’t want to lose their money see Singapore as the “safe haven” in Southeast Asia.
Chainalysis’ head of Asia-Pacific policy Chengyi Ong concurred that Singapore’s geographical location and reputation make it a jurisdiction of choice for regional criminals.
The comments came as Singapore police last month seized more than S$150 million in assets allegedly linked to Prince Group, which US and UK authorities have described as a transnational criminal organisation.
The US and UK authorities allege the group, led by Chinese-born Cambodian national Chen Zhi, was running forced labour scam compounds in Cambodia to steal billions from victims worldwide, laundering the proceeds through companies across Asia and offshore financial centres.
They also sanctioned 146 individuals and entities, including 17 Singapore-registered firms and three Singaporean nationals: Karen Chen Xiuling, Nigel Tang Wan Bao Nabil, and Alan Yeo Sin Huat.
Li Thet, former executive director of Singapore-based FSM Holdings, also resigned last month after the US Treasury described him as a “close associate” of Mr Chen.
So far, the US has seized US$15 billion (S$19.62 billion) worth of bitcoin, while the UK has frozen 19 properties linked to Prince Group.
Analysts said the rise of digital currencies has created new loopholes, with Prince Group funnelling funds through unregulated or lightly overseen exchanges.
Sopnendu Mohanty, former Chief Fintech Officer of the Monetary Authority of Singapore (MAS) and current Chief Executive of the Global Finance and Technology Network, warned that the rapid evolution of digital assets has created Singapore’s next major regulatory challenge: “the potential… for moving money between parties and escaping the normally regulated parts of the industry.”
Earlier this month, MAS ceased tax incentives for two single family offices (SFOs) in the city-state linked to individuals associated with the transnational criminal group.
National Development Minister and MAS deputy chairman Chee Hong Tat has emphasised Singapore’s risk-proportionate approach, “not zero-risk”, explaining: “If we were to tighten further to the point where the processes become overly cumbersome, it will affect our competitiveness, deter legitimate investors and put many local jobs at risk.”
According to Mr Doyle, MAS could follow the UK’s Financial Conduct Authority by taking full responsibility for preventing money laundering across finance companies and professional services firms by bringing “gatekeepers”, the law firms, trust companies and professional services providers, all under the same regulatory oversight.
“Think how much better it would be at identifying early and preventing those funds reaching the island,” he said. /TISG
Featured image by Depositphotos
