How $2.8b money laundering probe affects Singapore economy, property

Ministers and MPs engaged in a nearly four-hour-long exchange on Tuesday on an ongoing $2.8 billion money laundering probe, the largest in Singapore.

After the three ministerial statements were delivered in Parliament, members of the House spoke at length on how to ensure best practices and compliance with the country's anti-money laundering stance.

Workers' Party MP He Ting Ru (Sengkang GRC) asked how Singapore's economy, specifically its wealth and asset management industries, would be affected as investigations unravel the extent of the money laundering.

Minister of State for Trade and Industry Alvin Tan said the flow of funds into Singapore is testament to the robustness and dynamism of its financial sector. The sector contributes 14 percent of the country's GDP and provides some 200,000 jobs.

"We must and we will continue to build our financial sectors, which means good jobs for Singaporeans and enhances our standing as an international financial centre," he added.

Tan said that while illicit funds may slip through the system, the majority of the transactions in Singapore remain legitimate.

"So it's very important we don't throw the baby out with the bathwater; we throw only the dirty water out. That's really important."

This can be achieved as Singapore has a robust anti-money laundering and counter-terrorism financing framework that is in line with international standards, he added.

Yip Hon Weng (Yio Chu Kang) asked if current checks on property transactions are sufficient, and how compliance with standards is ensured.

Second Minister for Finance Indranee Rajah said property developers and agents have an obligation to file suspicious transaction reports (STRs). They act as gatekeepers against money laundering for the industry, she added.

Indranee said, "The key thing that real estate agents and others in the non-financial sectors have to do is to spot when something seems off, something is inconsistent, something cannot be explained."

She added that while it is impossible to ensure Singapore will never be targeted by criminals due to its status as a financial hub, mitigating steps can be taken.

The Republic can turn itself into an inhospitable place for criminals through prevention, detection and enforcement measures, she noted.

Edward Chia (Holland-Bukit Timah GRC) asked for steps charities can take to safeguard against illicit funds and donations.

Tan said charity organisations have a legal obligation to file STRs. "Charities should exercise vigilance when accepting donations, in particular, when the donors are unknown or unfamiliar to the charities," he pointed out.

Some of the 10 people accused in the probe were reported to have made donations to local charities.

Tan said more precautions should be taken when substantial amounts are donated by people unknown or unfamiliar to the organisations. Reasonable due diligence to check on the legitimacy of the source of funds or donations should also be done by the charity, he added.

Workers' Party chairwoman Sylvia Lim asked how the probe started and if the Chinese authorities have been assisting with investigations.

Second Minister for Home Affairs Josephine Teo said the probe began from a variety of gatekeepers, including banks, corporate service providers and real estate agents.

She added: "As to whether we connected the dots using only STRs, the answer is no.

"There will also be exchange of information with foreign counterparts... There will be other sources of intelligence."

As investigations are ongoing, she cannot reveal with which foreign law enforcement agencies Singapore is working.

"Suffice to say, there will be a variety because the proceeds that potentially have been laundered through the Singapore system involve activities that were carried outside of Singapore," she added.

Copyright: The Straits Times/Asia News Network