In recent months, Singapore has redoubled its efforts to prevent individuals and organized overseas groups from using the city state as a conduit for money laundering. This good fight comes at a time when illicit global money flows, coupled with capital flight, have made tracing dark money ever more difficult, if only because of the sheer volume of money flowing through the world’s financial centers and backwaters.
In August, three local law firms were penalized for breaching anti-money laundering requirements in connection with a 2023 case in which USD 2.3 billion, mostly proceeds from online gambling operations, was laundered in the country. After finding the firms had not questioned why real estate purchases and related transactions had been funded by unrelated third parties, the Ministry of Law proclaimed that anti-money laundering obligations must be taken seriously by law firms, lest they face regulatory actions.
In the year ahead, we can expect to see sharper anti-money laundering enforcement, especially given the removal, by the Corruption, Drug Trafficking, and other Serious Crimes Act (“CDSA”), of the requirement for prosecutors to prove a direct link between laundered money and foreign criminal acts. Prosecutors will need to show only that a person or entity receiving money in Singapore had reasonable grounds to assume they were dealing with criminally acquired gains. It will be up to the accused to prove that the money is clean and due diligence was carried out.
New anti-money laundering regulations will also affect corporate service providers, who have long benefited from the ease with which one can establish a business entity in Singapore. However, recognizing that such entities can facilitate money laundering, authorities have sought to ensure their integrity with stricter KYC requirements and tighter qualifying requirements for nominee directors. It has become commonplace to read about company directors facing fines or disqualification for not carrying out proper due diligence on their clients or failing to ensure that basic compliance requirements, such as annual filings to the Accounting and Corporate Regulatory Authority, are met. We can expect to see more fines and disqualifications in 2026 as these regulations are increasingly enforced.
As this article was being written, Singapore Police Force were conducting an operation against the assets of an overseas businessman accused of laundering the proceeds of a fraud. It is part of a global effort to uphold Singapore’s integrity as a trusted financial center, according to a senior official.
Companies seem to be getting the message. In November, two employees of a global accounting firm resigned from their roles as directors of a family office after the US Treasury Department slapped sanctions on the entity. The accounting firm was quick to announce that it takes seriously its responsibilities to conduct thorough due diligence on its clients.
As if further warning were needed, businesses and individuals looking to establish a presence in Singapore, or simply move money through the country, will need to stay abreast of Singapore’s tactics in the ongoing fight against money laundering, as well as understand the second and third order risks to which they may be exposed through their customers and business partners.
