Anti-Money Laundering and Other Matters Bill

Second Minister for Home Affairs.

Order for Second Reading read.

Mr Speaker, Sir, I beg to move that, "The Bill be now read a Second time".

Sir, Singapore has a comprehensive anti-money laundering regime, comprising legal and institutional levers. This regime is well established and highly regarded internationally. But the landscape does not stay static and new risks emerge regularly. Rather than to expect perfection at any point in time, our approach has been to stay responsive and to get ahead of the curve once these risks are identified and assessed. This is what this Bill seeks to do.

Mr Speaker, may I have your permission to ask the Clerks to distribute a handout with some details of our regime?

Please proceed. [A handout was distributed to hon Members.]

Sir, our laws to tackle money laundering include the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, or CDSA for short, as well as the Criminal Procedure Code, or CPC. Like our other laws, we regularly review the CDSA and CPC to ensure that they remain relevant and effective.

Money laundering, in particular, is one crime which has evolved significantly. Money launderers are finding new ways to evade detection, taking advantage of technological innovations meant to facilitate legitimate financial and business transactions. Consequently, international standards against money laundering have been enhanced. This includes those set by the Financial Action Task Force (FATF), the international body that sets global standards to tackle money laundering and terrorism and proliferation financing.

Each new money laundering case uncovered in Singapore or around the world provides useful lessons and this includes our $3 billion case. We have been distilling the learning points through careful studies of the changing modus operandi, as well as the new standards promulgated by FATF. This Bill is a continuation of our ongoing efforts to ensure that Singapore’s regime keeps pace with evolving standards and trends, so that we can continue to deal effectively with attempts to launder criminal proceeds through Singapore.

According to the International Criminal Police Organisation (INTERPOL), around US$2 to $3 trillion of illicit proceeds are channelled through the global financial system every year. US$2 to $3 trillion. Think about it. These numbers are bigger than the gross domestic product (GDP) of most countries, Singapore included. In the ocean of money flows, criminal proceeds are like toxic waste that gets carried along. Inevitably, some of them enter pristine waters, polluting rivers and estuaries, much against the wishes of local communities.

Illicit monies flow through many jurisdictions, but are especially attracted to global financial centres, such as London, Hong Kong, New York, Delaware, Switzerland and Singapore. This is because the open, efficient and well-connected infrastructure of such centres that makes them attractive to legitimate investors is also useful for criminals to move and hide their monies. I shared some examples with Parliament last year. More of such cases have surfaced since.

In February this year, the Hong Kong authorities arrested seven Hong Kong residents suspected of laundering US$1.8 billion of proceeds from online scams in India and the illegal sale of electronics and rare gems. The authorities seized more than US$21 million worth of assets as part of the operation. In April, two managers of a Saudi oil exploration company went on trial in Switzerland for alleged fraud and money laundering of at least US$1.8 billion.

Singapore strives to be a reputable, trusted and thriving financial and business hub. We have a hard-earned track record and every intention to keep our system clean. This must mean keeping money launderers out of our system as best as we can.

Our anti-money laundering regime has three pillars: (a) prevention through a robust legal and regulatory framework to deter such criminals; (b) detection to ensure that illicit activities are picked up early; and (c) enforcement. We take firm and prompt enforcement action against money laundering.

In this Bill, we have proposed enhancements across all three pillars to empower our agencies with strengthened levers and toolkits against money laundering.

Sir, allow me to elaborate on the key features of the Bill.

The Bill seeks to: first, align our framework for Anti-Money Laundering and Countering the Financing of Terrorism, or AML/CFT, framework with the FATF standards to better prevent and detect money laundering; second, enhance the ability of Government agencies to detect and enforce against money laundering through enhanced data sharing and strengthened prosecutorial levers; and third, clarify and improve our processes to deal with seized or restrained properties linked to suspected criminal activities.

First, on our AML/CFT framework for casino operators.

Customer due diligence (CDD) checks conducted by gatekeepers in various sectors, is key to preventing suspicious individuals from sinking roots into our system and detecting any illicit activities early. Casino operators are one such gatekeeper.

To align with FATF's standards, clause 2 will amend the Casino Control Act to require casino operators to conduct tighter CDD checks on patrons at the point of transaction. The threshold for CDD checks will be lowered from the current threshold of single cash transactions involving $10,000 or more or deposits into a deposit account involving $5,000 or more to cover single cash transactions or deposits involving $4,000 or more.

Additionally, the Gambling Regulatory Authority of Singapore will be empowered to require casino operators, when conducting CDD checks, to also consider proliferation financing risks. These are the risks of financing the proliferation of weapons of mass destruction.

Second, this Bill will enhance the ability of relevant Government agencies to detect and enforce against money laundering through enhanced data sharing, and strengthened prosecutorial levers.

On data sharing. Very often, money launderers will conduct and layer their activities across different sectors and use different front entities, so as to avoid detection. When interacting with individual Government agencies, they may leave traces of suspicion, which, on their own, may not raise concerns. However, when triangulated and pieced together with information from other agencies and sources, including Suspicious Transaction Reports (STRs), a more revealing picture may emerge. This can then trigger and support investigations by the relevant law enforcement agencies.

Clauses 18 to 21 introduce amendments to the Income Tax Act, Goods and Services Tax Act, Regulation of Imports and Exports Act, and the Free Trade Zones Act. The amendments will allow the Inland Revenue Authority of Singapore (IRAS) and Singapore Customs to share tax data and trade data respectively, with Singapore's Financial Intelligence Unit. This will allow the Suspicious Transaction Reporting Office of the Singapore Police Force to augment its analyses of money laundering risks and, in turn, provide richer financial intelligence to law enforcement agencies and AML/CFT regulators for appropriate enforcement action.

The United Kingdom, New Zealand and South Korea have similar tax data sharing arrangements. Likewise, Hong Kong, the United States (US) and Luxembourg have trade data sharing arrangements with their Customs agencies.

Additionally, clause 10 introduces amendments to the CDSA to allow any AML/CFT regulator, such as the Council for Estate Agencies (CEA) and the Accounting and Corporate Regulatory Authority (ACRA), to have access to suspicious transactions reports filed by their respective regulated entities. Regulators will then have greater insight into the risks and trends relating to their sectors, and be able to take more effective supervisory and regulatory actions. Guardrails for the data-sharing will be implemented to protect data confidentiality.

Next, we will amend and enhance the levers for prosecution of money laundering cases arising from criminal conduct abroad.

After our investigators painstakingly turn over the stones and uncover the suspects and their activities, the next big challenge is navigating the legal hurdles to successfully prosecute them. To do so, the prosecution needs to show that the monies, allegedly laundered in Singapore, are benefits derived from criminal conduct. In cases where the criminal conduct is committed outside Singapore, the authorities are currently required to show the complete trail of the monies from the point the crime was committed overseas to the point the monies were deposited with the money launderer in Singapore.

In many cases, law enforcement agencies face enormous challenges in obtaining the necessary evidence from foreign victims, entities and authorities. This is especially so if the criminal proceeds had flowed through many jurisdictions before entering Singapore, which is often the case. Criminals do this to conceal the origin of their proceeds and exploit such legal requirements to their advantage.

To enhance our abilities to effectively prosecute money laundering offences, clause 11 of the Bill amends section 56 of the CDSA such that the prosecution will no longer need to prove that the monies allegedly laundered in Singapore were benefits from criminal conduct nor show the complete trail. It will be sufficient for the prosecution to prove that the money launderer knew or had reasonable grounds to believe that the property he was dealing with were the gains from criminal conduct. This amendment will significantly alleviate the challenges faced by the prosecution today when dealing with money laundering offences, in cases where the monies laundered had passed through many bank accounts and intermediaries in foreign jurisdictions before entering Singapore.

We also propose to designate foreign environmental crimes as money laundering predicate offences.

Currently, law enforcement agencies are only able to investigate money laundering offences arising from the commission of an offence outside Singapore if the foreign offence is also a serious offence under Singapore's laws. Environmental crimes, such as illegal mining, illegal waste trafficking and illegal logging, are not applicable in our domestic context and, hence, not considered serious offences in Singapore. This limits our ability to investigate money laundering associated with such foreign offences.

However, these crimes are one of the largest contributors to transnational organised criminal activities in the East Asia and Pacific region. There is a high propensity for funds arising from such crimes to flow into Singapore, given that we are a well-connected international financial, trading and transit hub. This was highlighted in Singapore's Environmental Crime Money Laundering National Risk Assessment, which we recently published.

Clause 13 therefore introduces a Third Schedule to the CDSA, which will designate serious foreign environmental crimes as money laundering predicate offences. We have taken a risk-based approach, aligned with FATF's recommendations, and propose to designate specific foreign environmental crimes which have been assessed to pose a higher risk of their proceeds being laundered in Singapore. These are illegal logging, land clearing, mining, waste trafficking and wildlife trade. The amendment will allow the law enforcement agencies to investigate money laundering offences if it is suspected that the monies in Singapore are derived from such serious environmental crimes committed overseas.

Third, this Bill introduces three proposals to improve the processes to deal with seized properties in general, including those linked to money laundering.

Currently, when seized or restrained property is no longer required for investigations or court proceedings, law enforcement agencies must obtain the consent of all parties involved if they want to obtain a court order to sell the property. This is highly impractical because, if there is no consensus amongst the parties, law enforcement agencies will need to continue to manage and maintain the property. These properties can include vehicles, liquor, luxury watches and livestock. Not only are they costly to maintain, they also tend to depreciate in value. The costs of maintenance are borne by the state.

Clauses 14 to 16 will amend the CPC and the CDSA to allow the Court to order the sale of a seized or restrained property without the consent of all parties involved, provided the Court is satisfied that, the value of the property is likely to depreciate or undue costs are involved in maintaining the property; or the sale would be in the interests of justice. These amendments will allow law enforcement agencies to reduce the cost of property maintenance and preserve the value of seized or restrained properties to facilitate subsequent asset recovery and restitution to the victims.

We will also make amendments to deal with properties in cases where the suspect has absconded.

In the course of investigations, law enforcement agencies may seize properties linked to persons who are suspected of having committed offences under Singapore's laws but cannot be found despite efforts to reach out to them. In some cases, the persons may have left Singapore and cannot be extradited or refuse to return. This is not uncommon in cross-border financial crimes, such as money laundering and scams. Investigations can be wilfully stalled by such absconded persons if they decide to stay out of Singapore in order to avoid being imprisoned for their crimes. But law enforcement agencies need to interview them for the investigations.

Today, the CPC prohibits the Court from releasing a seized property if the property is required for any investigation, inquiry, trial or any proceeding under the law. However, if the law enforcement agencies fail to satisfy the Court that any of these grounds for continued seizure of the property applies, the Court may order the property's release or disposal.

If the absconded person refuses to return to Singapore, it may become increasingly difficult for the Police, over time, to justify how the continued seizure of the property remains relevant to the investigations, which are not making headway because they cannot interview the person. This presents an opportunity for absconded persons to frustrate due process. By staying out of Singapore and, hence, stymying investigations, they have hope that the seized property would eventually be released back to them.

Clause 16 amends the CPC such that the Court must not dispose of the seized property, if there is any pending investigation in relation to an absconded person who is reasonably suspected of having committed an offence in respect of the property, regardless of the progress of the investigation. Law enforcement agencies can lawfully seize property only where they have reason to suspect that an offence has been committed or the property has some nexus to the offence. Further, the Court will also have to determine that the continued seizure will not cause injustice to any person entitled to the possession of the property. This ensures due process in the proceedings.

Next, section 372 of the CPC currently provides that if the person entitled to a seized property is unknown or cannot be found, the property will be vested in the Government if no one establishes a claim to it within six months of a public notice. However, an absconded person can lay a claim to the property through a legal counsel, while refusing to return to Singapore to cooperate with the investigations.

Moreover, absconded persons could try to find creative means to insulate their properties from forfeiture or confiscation. For example, they could vest the legal title to the properties in other individuals, who may not have committed offences in Singapore. These individuals may then present themselves as innocent claimants to the property.

Clauses 16 and 17 amend sections 370 and 372 of the CPC, to include a requirement that an absconded person who is suspected of having committed an arrestable offence under our laws or serious offence under the CDSA, must personally present himself before a law enforcement officer to assist in the investigations, prior to making a claim to the property seized in respect of the offence.

Additionally, clause 16 amends the CPC to provide that the Court may consider whether the property was obtained through legitimate sources, such as income or investments, before the seized property may be released to a third party, even if that third party has not committed any crimes. That party cannot prove his entitlement to the property simply because it was a gift from the absconded person.

Taken together, these amendments will enable the Government to better deal with absconded suspects, through depriving them of the financial gains of their money laundering and other criminal activities, if they refuse to return to Singapore for investigations.

To be clear, these amendments continue to be subject to judicial oversight and only affect persons who are suspected to have committed offences in Singapore and have absconded, as well as properties seized in relation to these offences. The proposal does not change the existing law or procedures for persons who are not "absconded persons".

Sir, today's Bill is another step in strengthening our AML/CFT regime. It will not be the last. Criminals will continue to explore other ways to circumvent even the most stringent of measures, in the fast-changing money laundering landscape.

Singapore will therefore have to continue to be vigilant and we will not hesitate to further tighten our laws against money laundering where necessary, to ensure that our financial and business ecosystem remains reputable and trusted and continues to thrive. Sir, I beg to move.

Question proposed.

Ms Foo Mee Har.

Mr Speaker, I rise today to express my support for the Anti-Money Laundering and Other Matters Bill – the AMLOM Bill in short.

As a prominent global financial centre with substantial flows of capital, Singapore faces inherent risks related to money laundering. It is therefore imperative that our anti-money laundering regime remains dynamic and consistently ahead of the evolving tactics of criminals. These individuals are becoming increasingly sophisticated, employing advanced technology, intricate financial networks and cryptocurrencies to outmaneuver systems of detection and prosecution.

Sir, I would like to raise three points in support of the AMLOM Bill.

First, the amendments in this Bill will empower Government agencies to share tax and trade data with Singapore's Financial Intelligence Unit, the Suspicious Transaction Reporting Office (STRO). Additionally, amendments will allow STRs filed by entities regulated under CEA and ACRA to be accessed by relevant authorities.

Data sharing across Government agencies is a significant step forward. It is the key to seeing the full picture of illicit activities. Like pieces of a puzzle, each agency's data may seem insignificant on its own, but together, they reveal the wider scope of money laundering's operations. The ability to corroborate different sources of data will empower enforcement agencies to identify real threats in the vast number of suspicious transactions filed. Without this collaboration, crucial connections are lost and our understanding of the threat remains fragmented.

However, Sir, with the influx of additional data from various agencies, the capability to analyse and make sense of the information must be correspondingly elevated. I would like to ask how STRO plans to handle and analyse the large volume of data from different sources, especially as it already receives an average of 43,000 STRs annually. How will it update its methods, enhance the quality of its intelligence and leverage technologies, such as artificial intelligence (AI), to help agencies better connect the dots from these diverse sources?

Furthermore, with improved detection capabilities, how well-resourced are our agencies to respond promptly and effectively to suspected illicit activities? It is crucial that our analytical capabilities and resources keep pace with the increased data flow to ensure we are not overwhelmed with the sheer volume of information, but rather, empowered to act swiftly and decisively.

Second, the Bill expands the toolkit for law enforcement agencies to deal with seized criminal assets.

I support the provision for early sale of seized assets to minimise the cost of property maintenance and preserve the value of these properties. By streamlining these procedures, law enforcement agencies can act swiftly to order the sale of seized properties, thereby avoiding depreciation or undue costs associated with maintaining these assets.

The importance of these measures is underscored by Singapore's largest money laundering case to date, where the $3 billion in seized assets has already incurred around $650,000 in expenses for storage, maintenance and safeguarding. These provisions are therefore crucial for maintaining the efficiency and effectiveness of our law enforcement agencies and ensuring that justice is both swift and financially responsible.

Mr Speaker, once the assets are seized, it is vital to ensure that the Government has processes in place to secure competitive prices in forced sales. The unique nature of some seized assets, which can include luxury goods, rare collectibles and high-value personal items, requires specialised knowledge and handling to prevent significant losses during forced sales. Ensuring that these assets are appropriately appraised and sold through channels that can attract the right buyers at the best possible prices is essential. This not only maximises the return from these seizures but also reinforces the credibility and efficiency of our asset recovery processes. Therefore, I would like to ask whether the current procedures are robust enough to manage these complex and high-value assets effectively. For instance, how will the authorities market the collectible Bearbrick toy figurines or some 250 luxury handbags and watches to recover the best prices?

Third, I strongly support the provisions in the Bill that allow for the continued seizure of properties in cases where the suspects have absconded and introduce significant barriers to claiming properties linked to these individuals.

Dealing with absconded criminals presents substantial challenges, as jurisdictional issues and international legal complexities often hinder swift justice. The ability for authorities to seize and maintain control over assets even when the suspect is beyond our reach is therefore crucial. It disrupts the financial incentives for fleeing, for running away and makes it clear that evading justice will not protect one's ill-gotten gains.

Moreover, by creating legal barriers to claiming properties associated with absconded suspected criminals, we strike at the heart of criminal networks, undermining their financial base and reinforcing the principle that crime does not pay. These measures are essential for upholding the rule of law and maintaining public confidence in our justice system.

Mr Speaker, the AMLOM Bill will add to Singapore’s ongoing legislative efforts to strengthen Singapore's AML/CFT regime. Since 2023, a total of four Bills have been passed in this House to safeguard our systems from exploitation and enhance our defences to protect the integrity of our systems. There is also an ongoing Inter-Ministerial Committee on AML, with findings and recommendations expected in fourth quarter of 2024.

Sir, the intensity of this legislative activity is a very clear testament to the Government's zero tolerance for money laundering. It underscores our commitment to staying ahead of evolving threats by ensuring our legal frameworks remain both robust and adaptive. We address risks head-on as soon as they come to light.

However, Sir, we must ensure that these new measures do not come at the cost of jeopardising Singapore's reputation as a competitive global business and finance hub. I have received feedback and frustrations from affected parties that the account opening process is now protracted and delayed, with layers of checks perceived as disproportionate and not commensurate with the assessed level of risk. Some have expressed concerns that our banks have taken a knee-jerk reaction in the reviewing accounts, issuing retroactive requests for documents and information that are cumbersome and time-consuming to produce, often seen as unnecessary given the accounts' sizes, tenure of the relationship with the financial institutions and transaction patterns.

Wealth owners shared that they no longer feel welcomed in Singapore. Bankers fear their clients are bringing their money to other centres such as Switzerland, Hong Kong and Dubai.

Mr Speaker, I urge the relevant authorities to work closely with the industry to ensure that the implementation of new AML rules is well guided, well understood and implemented proportionately. Most businesses and investors are legitimate and checks must be risk-based, proportionate and considers the history of the relationship and transaction pattern.

Mr Speaker, as we move forward with these crucial reforms, let us strike a careful balance between vigilance and openness. While we are resolute in our commitment in combating money laundering, we must also ensure that our actions reflect the same confidence and clarity that have long defined Singapore as a trusted global financial hub. By implementing these measures thoughtfully and proportionately, we reinforce that Singapore remains a place where legitimate business thrives and where the integrity of our financial system is safeguarded with both strength and wisdom. And in doing so, we send a strong message to the world: Singapore is open for business and we welcome those who seek to contribute to our shared prosperity under the rule of law. I support the Bill.

Ms Sylvia Lim.

Mr Speaker, I will first make some general observations about money laundering in Singapore before raising three queries about the Bill.

Sir, this Bill is part of Singapore's efforts to enhance its anti-money laundering measures. The Workers' Party supports the Bill. Nonetheless, if implemented, this Bill is just part of an entire ecosystem that needs to be scrutinised for gaps and vulnerabilities. Member He Ting Ru will speak later about some areas of concern regarding Singapore's ecosystem.

Sir, Singapore is one of the 40 members of FATF, which conducts mutual evaluations on the ecosystems of countries. The most recent mutual evaluation by FATF on Singapore was done eight years ago in 2016, with the next one due next year.

In the 2016 evaluation, Singapore was assessed to have a mostly robust and competent regulatory system when it came to financial institutions. However, the same could not be said for sectors outside the finance industry, collectively known as designated non-finance businesses and professions (DNFBP). The DNFBP sectors were noted to lack many of the obligations and supervisions that financial institutions were subject to. The 2016 evaluation identified that we did not have a strong awareness of illegal fund flows from foreign predicate offences. It also pointed out that the private sector had weak knowledge of money laundering risks from transnational transactions.

Fast forward to today, Singapore just published its own Money Laundering National Risk Assessment (ML NRA) report. This report concurred that there were significant risks in the DNFBP sector which needed to be addressed.

Last month, this House took a step in the right direction by enhancing the requirements on corporate service providers. Other private sector industries, such as real estate and luxury retail, have rightly been identified as needing to be stepped up too.

To illustrate, we just need to look at the recent $3 billion money laundering case. The money launderers had managed to channel their ill-gotten gains into Singapore with the purpose of washing them through items of tremendously high value. For example, just one of the men involved had purchased 10 condominium units at Canninghill Piers worth $85 million, a transaction in which red flags should have been raised. It has since been reported that some real estate agents were being investigated for giving kickbacks to their clients from the huge commissions earned. It is clear then that an effective AML approach needs not just a robust framework. How it is executed is key. To this end, Member Dennis Tan will seek clarifications later on the adequacy of AML due diligence measures in the recent cases.

I now move to the Bill before us. On this, I have three queries: (a) on restitution to crime victims; (b) on the change in the law to Jeanette Ang's case; and (c) on STRs.

First, on restitution to crime victims. In the Government's recent paper, National Asset Recovery Strategy 2024, it was stated that the strategy had four operational pillars. I was pleased to note that under Pillar 3, the strategy aims to "deliver maximum recovery of assets for forfeiture and restitution to victims". The paper affirmed that Singapore adopted a victim-centric approach towards asset recovery. I agree that where offenders have profited at the expense of victims, then the assets purchased using such fruits of crime should rightfully be delivered to these victims. I, therefore, welcome the provisions, such as clauses 7 and 14 of the Bill, which will help ensure that the value of seized assets is preserved.

One challenge regarding delivering restitution to victims is that money laundering is typically transnational in nature. The victims of crime are often located in other countries. In the National Asset Recovery Strategy report, it was stated that in the five-and-a-half-year period between January 2019 and June 2024, authorities here seized about $6 billion in assets. Out of this, the majority of $4.6 billion is still tied up in ongoing investigations and Court cases. This leaves about $1.4 billion freed up to make restitution, out of which, $416 million, or less than one third, has been returned to victims.

During the Parliamentary Sitting in July, I had asked whether it would be too late for victims to make claims after a Singapore Court had already forfeited the assets. The Ministry of Home Affairs (MHA) had indicated that it would still be open to foreign parties to make requests for MLA even after the Court had made forfeiture orders. For us to assess whether the MLA route is meaningful for victims, could the Ministry confirm how many countries have filed MLA requests with Singapore in the last two years and which three countries have filed the most MLA requests?

Next, I move on to the change in the law arising from Jeanette Ang's case. I have a query on the change in clause 11. Clause 11 will amend the law set out in the 2011 High Court case of Ang Jeanette vs Public Prosecutor to make it easier for the prosecution to prove certain money laundering offences. Let me summarise why.

In Jeanette Ang's case, the High Court had ruled that to prove that an accused had committed money laundering, the prosecution needed to show that the monies in the accused's accounts came from criminal conduct. Clause 11 would remove this requirement. Instead, it would simply be sufficient for the prosecution to show that the accused had a guilty frame of mind, that is, that he knew or had reason to believe that the monies came from criminal conduct.

In explaining the rationale for the change, the Ministry pointed to evidentiary difficulties. It was said that the proceeds of crime could have been channeled through other bank accounts in other jurisdictions before coming to the accused. It was stated to be difficult to obtain documents from foreign banks to prove the trail of monies. I think earlier, the Minister also touched on this point.

Sir, this amendment in clause 11 would fall squarely within the concern raised by the judge in the Jeanette Ang case. The Court in that case had stressed the importance of requiring the prosecution to prove the trail of monies. The judge noted that if the prosecution did not need to prove that the monies came from criminal conduct, then a person could be prosecuted for money laundering in situations where he mistakenly thought that the monies were the proceeds of crime when the monies were, in fact, clean monies. The Court opined that prosecuting such a mistaken person would not further the purposes of the anti-money laundering conventions and laws. With the change in clause 11, how will be risk be addressed?

Sir, finally, on STRs. STRs are a key step through which the authorities are alerted to potential money laundering transactions. Clause 5 of the Bill will increase the jurisdiction of STRO, that is, the Commercial Affairs Department (CAD). STRO will soon be receiving STRs arising from additional legislation, such as the Free Trade Zones Act, Goods and Services Tax Act, Income Tax Act and the Regulation of Imports and Exports Act. In order to facilitate the work of STRO, what can we learn from our experience so far about the filing of STRs?

In answer to a Parliamentary Question (PQ) I filed in January last year, the Minister for Home Affairs revealed that CAD received an average of 37,000 STRs each year from 2019 to 2021, or about 102 reports daily. I believe the numbers are much higher today, a point that Ms Foo Mee Har alluded to earlier.

Sir, what is concerning is that of the STRs filed in those two years from 2019 to 2021, the Minister reported that only 20% of them resulted in or supported investigations eventually. Does that mean that the other 80% were found to be of low quality and not actionable?

Similarly, when it came to digital payment tokens (DPTs), a similar trend is being observed. According to our Money Laundering National Risk Assessment report this year, a majority of the STRs relating to DPTs did not point to any specific offence.

Sir, all this suggests a possible wastage of investigative resources to look into unactionable STRs. It may also suggest that the STRs are being filed defensively to avoid possible trouble down the road.

Being unclear about the threshold that warrants the filing of an STR harks back to the earlier concerns expressed by FATF about the level of private sector knowledge in Singapore regarding AML risk. What is being done to promote a deeper understanding of what STRs should contain?

Sir, let me conclude. The Workers' Party is in support of the Bill. I look forward to the Ministry's clarifications regarding the three concerns I have raised about restitution to crime victims, the change to the law in the Jeanette Ang case and the quality of STRs.

Mr Derrick Goh.

Sir, safeguarding Singapore's financial integrity is paramount to upholding our reputation as a flourishing global financial hub. A robust legal framework for AML/CFT is critical in this endeavour.

This Bill consists of proposals across prosecution, foreign environmental crimes, cross-agency data sharing and others. Taken together with past amendments fronted by MHA, the Ministry of National Development and Ministry of Law (MinLaw), as well as the recently published National Asset Recovery Strategy and updated Money Laundering National Risk Assessment, it underscores an unwavering whole-of-Government emphasis on strengthening our AML/CFT regime amid a dynamic financial crime landscape. On this basis, I support the Bill but would seek some clarifications.

I will begin with the enhanced levers for prosecution of money laundering cases. As is, Law Enforcement Agencies (LEAs) are required to show the complete trail of monies from point of crime to deposit in the suspect's account. Recognising the challenges, especially when crimes originate or when monies are dissipated through accounts overseas, clause 11 of the Bill makes it sufficient for prosecution if the money launderer should reasonably know or believe he possessed criminal proceeds, with no need to prove the complete trail of funds.

This is sensible. A lower bar for prosecution will further deter money mule activities in Singapore while at the same time avail our LEAs with greater capacity to focus on efforts with more systemic outcomes like crippling syndicates with our international partners. That said, while the public cheers every successful anti-crime operation by our LEAs, what is foremost on their minds, particularly victims of scams, is how to get their money back.

Given that LEAs' efforts on illicit funds tracing would be instrumental in determining their rightful ownership and facilitating their proper seizure for restitution, consistent with one of the four pillars in our National Asset Recovery Strategy, may I seek the Minister's clarification whether the amendment will impact the likelihood of asset recovery for Singaporean victims? Will these victims have any recourse for cases where investigations reveal an ownership connection but where details of fund flows are unavailable or are no longer required to be pursued for prosecution?

In addition, as it is challenging to obtain information from foreign agencies and entities, international partnerships remain a crucial lever to combat financial crimes. This will facilitate the greater visibility and timelier confiscation of illicit overseas assets for investigation and restitution to Singapore victims as well as to detain fugitives on the run. On the $3-billion-dollar money laundering case that the Minister had mentioned, the 17 remaining absconders come to mind.

Given that Singapore was the FATF president for two years until June 2024, can the Minister also share further plans to boost international cooperation for more robust investigations and asset recovery?

I now turn to clauses 4 and 13 of the Bill, which would empower our LEAs to act upon the criminal proceeds resulting from foreign environmental crimes, which will be listed in the Third Schedule of CDSA. These proceeds may inevitably flow through Singapore as we are a global financial centre. In addition to closing the legislative gap highlighted by FATF, this move also signals Singapore's commitment to environmental sustainability on the global stage. On this, I have the following clarifications.

First, looking back, can the Minister share the value and number of money laundering cases from environmental crimes that could have been pursued in the past five years had this legislation been in place; and, secondly, clarify if there will, indeed, be retrospective application of this law?

Looking ahead, we may have limited visibility on how these overseas offences evolve. Other than relying on FATF, can the Minister clarify plans to be more proactive in ensuring the Third Schedule continues to be comprehensive and relevant?

Next, I move to the enablement of cross-agency data sharing to enhance financial intelligence. This is pursuant to clauses 18 to 21, which allow IRAS and Singapore Customs to share tax and trade information respectively with STRO to facilitate more holistic sense-making. Agencies like CEA and ACRA will also have more access to information.

I previously spoke in support of the Monetary Authority of Singapore's (MAS') Project COSMIC, or Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases, and I shared about the parable of the blind men and the elephant, and it is only by collecting information and thereafter pooling them all together, can a more accurate picture and understanding of money laundering risks emerge. I, therefore, welcome the amendment not only because it directly addresses a gap highlighted in Singapore's 2016 FATF evaluation, but more substantially, because it furthers an ecosystem approach to counter AML/CFT.

What is clear from the $3 billion and the other money laundering cases is that, criminals leverage multiple and intertwined points of entry into Singapore's financial ecosystem, be it by asset purchases, shell companies, illegal trade, bank deposits or others. This risk is expected as with any global financial centre, so the key question is: how can we enhance vigilance across the board, by promoting information sharing, pooling and access to risk insights by both agencies and the private sector.

Given the above, may I seek the Minister's view on (a) how may STRO further enhance the collection, pooling and delivery of insights to both the private and public sectors, to boost the effectiveness of entities' CDD, as the first lines of defence; and relatedly, secondly, whether information from agencies, such as IRAS and Customs, can be integrated with COSMIC that was launched in April 2024 this year, in the longer term, for more automated and secure sharing of intelligence across the entire financial ecosystem?

Lastly, I spoke to and I note the amendments related to dealing with seized properties linked to suspects who have absconded, which introduce safeguards to prevent a premature release when investigations are ongoing to trace the absconder. On this, can the Minister clarify the prevalence of previous cases where an absconder had wilfully stalled investigations by staying overseas, and yet, successfully made a claim to seized properties? Was this observed with absconders in the $3 billion money laundering case, which continues to be of public interest?

So, in conclusion, Sir, together with the final key amendment on tightening the CDD thresholds for casinos, this Bill will further align our defences against AML/CFT with international best practices and represent progress in safeguarding Singapore's financial integrity.

Notwithstanding the clarifications, I support this Bill.

Ms He Ting Ru.

Mr Speaker, while the strengthening of our anti-money laundering laws is welcome, the recent $3 billion money laundering case is a good reminder that we have to tackle money laundering comprehensively and I will speak on this today. Like my Aljunied Group Representation Constituency (GRC) colleague, Ms Sylvia Lim, I support the Bill's objectives. However, we cannot just react to the immediate circumstances of money laundering cases, but need to more holistically address structural problems at their root to prevent ourselves from being caught out on the back foot.

It would also prevent a situation where our legislation and regulations, which take time, end up having to constantly play catch-up to outlaw new ways in which criminals evolve to launder illicit funds. The challenge of money laundering that we face has several key facets. First, money laundering can originate from any area within financialised assets, including Single Family Offices (SFOs), cryptocurrencies, fine art and real estate.

Second, we would be best served by a comprehensive omnibus AML Bill that consolidates and streamlines the various existing regulations including CFT, CDSA and MAS guidelines. This unified approach should cover all relevant sectors, including financial institutions to dealers in precious metals. These laws should also be easily understood by all Singaporeans, not just specialised legal and compliance experts.

An omnibus Bill would present an opportunity to future-proof our legislation by introducing a unifying principle of a duty of financial transparency for our intermediaries, which does not require suspicion of a predicate offence and ensures that Singapore does not become a place that facilitates obfuscation of funds.

Third, to effect real change, we must alter the incentive structures to foster a culture of vigilance throughout the financial industry and we should act decisively to establish a whistleblowing fund.

First, individual verticals. Mr Speaker, money laundering is an issue that can only be effectively combated by addressing multiple potential entry points to maintain the integrity of our overall financial system. Given the rapid pace of financial innovation and the increasing complexity of corporate structures, we cannot, realistically, stay ahead of all asset classes unless we legislate proactively. I will focus on three areas not covered by the Bill: SFOs, cryptocurrencies and fine art.

I hope that there can be discussion about the Government's assessment of the risks in these sectors. It will be insufficient to merely state that these areas are not covered by the Bill. We must understand how the Government intends to address these areas and ensure that any gaps are effectively closed.

Mr Speaker, the 2021 collapse of Archegos Capital Management, a US$20 billion SFO, highlights a critical regulatory overlap between AML concerns and systemic risk. Archegos used equity total return swaps to build US$100 billion of portfolio exposure while avoiding disclosure requirements, exposing a significant gap in financial oversight.

In response, the US is contemplating significant regulatory changes. These include bringing family offices under the Investment Advisors Act, mandating ownership and business structure disclosures and enhancing trade reporting under the Securities Exchange Act. Such measures could compel SFOs to provide detailed information about their trades and portfolios. I strongly advocate for similar advanced disclosure requirements for SFOs in Singapore.

This approach would not only bolster our AML defences, but also curb potential market abuses by SFOs. We can hit two targets with a single type of policy instrument. For SFOs, recent events have demonstrated that SFOs can be a significant conduit for illicit funds entering Singapore. In July 2024, Deputy Prime Minister Gan Kim Yong revealed that six SFOs awarded tax incentives were linked to individuals convicted in the recent money laundering case.

The number of family offices in Singapore has grown by nearly 200%. From 400 in 2020 to about 1,100 by the end of 2022. This rapid expansion increases the risk of importing financial crimes from jurisdictions with weaker AML controls. This is a live vulnerability in our AML framework. The current regulatory landscape presents a glaring gap. SFOs are exempt from MAS legislation or licencing requirements under the SFA, as they do not handle third-party funds.

While this is an MHA Bill, cooperation with MAS is key to addressing the risks. What, then, is the current status of the MAS Public Consultation on Strengthening Defences Against Money Laundering Risk in SFOs, launched on 31 July 2023? The consultation proposed that all SFOs maintain a relationship with an MAS-regulated financial institution for AML checks. We have not seen any public updates on actions taken.

If this public consultation has not been operationalised, then, as stated by the Minister of State Alvin Tan in Parliament on 3 October 2023, only SFOs applying for MAS tax incentives are subject to DDCs. This means, SFOs not seeking tax incentives remain outside our AML framework. How do we justify this discrepancy? MAS Managing Director, Mr Chia Der Jiun, stated on 18 July 2024, that Singapore had already issued a set of enhancements for SFOs last year.

Can we get more clarity on this statement? Is this an operationalisation of the July 2023 public consultation? To close the current regulatory gap, I suggest requiring all SFOs, regardless of tax incentive status, to register with and be licenced by MAS. Mr Speaker, there is a related issue of remittance companies working with SFOs. Currently, SFOs are exempt from many due diligence requirements, allowing their transactions with remittance companies to go largely unscrutinised.

Since 2019, MAS regulations have not required remittance houses to seek prior approval for new customers without face-to-face meetings. Are remittance houses now included in the April 2024 MAS Notice PSN01 (Prevention of Money Laundering and Countering the Financing of Terrorism - Specified Payment Services)? If not, what strengthening of remittance house diligence can we expect?

I propose two immediate measures for remittance companies.

First, to introduce cumulative transaction limits for SFOs receiving funds through remittance houses, with an automated system to flag transactions exceeding those limits. Second, reinstate mandatory face-to-face verification for new customers, especially for high-value or frequent transactions involving SFOs.

I will move on to cryptocurrencies. Cryptocurrencies and other digital assets present unique challenges to our AML efforts. Recent data indicates rising illicit fund flows. Chainalysis reports nearly $100 billion has been sent from known illicit wallets to conversion services since 2019, peaking at $30 billion in 2022. Crypto is increasingly used to launder proceeds from off-chain crimes, like drug trafficking and fraud, not just crypto-specific crimes.

In 2022 alone, the FBI reported that US victims lost $2.6 billion to pick butchering and other crypto fraud, with the true scale of losses unknown, as victims are often too embarrassed to report crimes to authorities. There is great technical complexity involved. While blockchains offer transparency, sophisticated laundering techniques involving multiple transactions and intermediaries pose tracing challenges.

Both centralised exchanges with consolidated wallets and decentralised protocols enable the co-mingling of illicit and legitimate funds. This can take the form of consolidated exchange hot wallets for exchanges, such as Binance; but also decentralise co-minglement protocols through crypto tumblers, such as Tornado Cash; or core protocol features, such as Privacy Coins or Monero's ring signatures.

There is a fundamental tension between crypto's desire for instant, irreversible transactions and the need for financial safeguards. While instant transaction finality is desirable in crypto for censorship resistance, it poses risks when it butts up against traditional finance. Our priority must be preserving Singapore's reputation for clean finance over accommodating crypto's preference for irreversibility.

To address these concerns, we should consider methods like increasing off-ramp fiction. Solutions, could include enhancing scrutiny on crypto-to-fiat conversions, including one-to-three-day escrow periods for large transactions, with the time bought to perform on-chain analysis through providers, like Chainalysis, to check for co-mingled funds or suspicious sources both on centralised exchanges and decentralised protocols.

Finally, I will move on to art. The art market, with its high value transactions and potential for anonymity, has recently become an attractive avenue for those seeking to launder illicit funds. The 1MDB scandal provides a stark example of how the art market can be exploited. From May to September 2013, approximately $137 million from an account controlled by Jho Low's associates was used to purchase art at Christie's auctions.

This includes, Jean-Michel Basquiat's Dust Hits for $48.8 million, along with significant works by Alexander Calder and Mark Rothko. Low further leveraged these assets, using 17 artworks to collateralise loans worth $107 million from Sotheby's. Effectively creating additional layers of transactions to obscure the origins of the stolen funds. The scale of this issue is significant and growing with the depth of the market.

In early 2023, China saw a 14% year-on-year increase in art auction sales to $7.9 billion, with the Old Masters' segment alone rising 15% to $1.1 billion. Globally, the art-secured lending market has expanded rapidly, with Sotheby's financial services alone originating more than $10 billion in loans since its inception. The entire global art secured lending space was valued at up to $34 billion in 2023.

This growth in art-related financial services presents new challenges for anti-money laundering efforts. Collateralised portfolios of art can more easily obscure the origin of funds and complicate scrutiny of wealth sources. The US Treasury, recognising these risks, recommended in a 2022 report that certain art market participants be subject to AML requirements, including suspicious activity reporting and KYC requirements.

Given these developments, what steps is Singapore taking to address the risks of money laundering through the art market and other alternative assets? Are we considering implementing AML requirements for auction houses, galleries and art-secured lenders operating in Singapore?

Next, I will move on from individual markets to overarching considerations.

Mr Speaker, given the evolving nature of money laundering techniques, we should consider creating a single dedicated omnibus AML legislation. This would consolidate the various amendments currently scattered across different acts, including the CFT, CDSA and the numerous MAS guidelines. Such consolidation would encompass regulations for financial institutions, professionals, trustees and dealers in precious metals.

This omnibus approach serves two purposes. It simplifies compliance for industry professionals and makes our AML laws more accessible to the general public. Secondly, and more importantly, we should future-proof our legislation by introducing the unifying legal principle and being affirmative in the duty of financial transparency.

Currently, our laws require reporting of suspicious transactions when there are reasonable grounds to suspect criminal activity. I propose we go further. Financial institutions and gatekeepers should have an affirmative duty to ensure the transparency of all the transactions they facilitate. This new standard of care would require reasonable efforts to ensure transparency, which is more proactive than our current suspicion-based reporting. It would involve comprehensive origin and destination checks for funds, verification of the economic rationale for complex transaction structures and enhanced ongoing monitoring for high-risk clients or transactions.

The advantage of this approach is that it does not require suspicion of a predicate offence. Instead, it ensures that Singapore does not become a place that facilitates the obfuscation of funds, which some call "Singapore-washing". We can protect private wealth without enabling financial opacity. This approach allows us to target the core issue of financial opacity, adapting to new financial instruments and practices as they emerge. It positions Singapore as a leader in combating global money laundering while maintaining our attractiveness as a financial hub.

Finally, Mr Speaker, in response to the clear need to shift the culture among our financial gatekeepers, we can approach it from a different angle. Rather than viewing AML measures as mere administrative burdens, we must foster an environment where vigilance is valued and rewarded. In our fight against money laundering, we must recognise the crucial role of whistle-blowers and create a system that incentivises proactive reporting and cooperation. I propose that we allocate a portion of the assets confiscated from money launderers to establish a whistle-blowing fund. This fund would serve to reward those who come forward with valuable information, with the size of the awards proportional to the value of the assets seized as a result of their disclosures.

The US offers an instructive model. In 2023, the US enacted the Anti-Money Laundering Whistleblower Improvement Act as part of the Consolidated Appropriations Act 2023. This legislation, passed unanimously by the Senate, significantly enhances incentives for whistle-blowers. Key provisions include: first, guaranteed awards of 10% to 30% of the financial fines collected for qualified whistle-blowers; second, establishment of a $300 million financial integrity fund funded by criminal forfeitures, fines and victim restitution; and third, expansion of eligibility to include non-US citizens, corporate auditors and compliance professionals. The US experience offers valuable lessons for crafting an effective whistle-blower campaign.

Mandatory awards are crucial. Discretionary awards are rarely paid and have proven ineffective in incentivising whistle-blowers. Confidentiality and anonymity protections allowing whistle-blowers to file complaints anonymously and maintain their anonymity encourage higher participation rates. Compensation for related actions where whistle-blowers are rewarded for enforcement actions by all relevant agencies resulting from their tip promotes comprehensive reporting to all relevant authorities.

For us in Singapore, the $3 billion money laundering case has indicated that there is somewhat of a culture of viewing self-reported checks as administrative hurdles to be avoided in the pursuit of profits. This cultural issue needs addressing in any regulatory framework. I believe that a whistle-blower fund, properly implemented, offers us the best shot of changing the game and mindset around suspicious transaction reporting. In the fight against money laundering, we will need both carrots and sticks.

While the US already has a strong AML framework, as evidenced by its prosecution of the 1MDB case, it still saw the need to enhance the whistle-blower system. Singapore should follow suit, recognising that motivating individuals to come forward is essential to maintaining a clean and transparent financial system.

By implementing these measures, we can turn the current AML lapses into a catalyst for positive change, fostering a culture of integrity and vigilance within our financial sector. A whistle-blower fund, seeded from the ill-gotten gains of the Fujian money launderers, could be the cornerstone of a cleaner, more transparent financial future for Singapore.

Mr Yip Hon Weng.

Mr Speaker, Sir, this Bill represents a significant step in strengthening Singapore's fight against financial crime. The proposed amendments, aimed at enhancing law enforcement capabilities, streamlining asset management and aligning regulatory frameworks with international standards are commendable. While I support the Bill's overall objectives, I would like to seek some clarifications.

First, Mr Speaker, Sir, I have some queries with regard to the potential impact on specific groups. For instance, the reduction of the transaction threshold for customer due diligence checks in casinos, from S$10,000 to S$4,000, raises questions about its effect on small business owners and patrons who rely on these establishments for legitimate recreational or business purposes. In particular, whilst $4,000 is not an insignificant amount, the much-lowered sum of $4,000 may reduce the attractiveness of the casinos to tourists. They may be put off by the additional due diligence process. Can the Minister provide data or studies that justify this reduction and its projected impact on these stakeholders?

We should find a balance between allowing the genuine punters who are here to enjoy the thrill of gambling versus those who are here to game the system and wash their ill-gotten gains in criminal activities. Otherwise, we will be suffocating the very clients who are essential to the casinos to keep afloat and contribute to the tourism traffic in Singapore. Furthermore, the money launderers from the recent high-profile cases or convictions know that they will keep a wide berth from using Singapore as their playground. There is no lack of alternatives in the region for them to move around.

Second, Mr Speaker, Sir, while I understand the necessity of robust customer due diligence measures, I am also mindful of the potential operational challenges and financial burden these measures may impose, particularly on smaller enterprises. The amendments proposed rigorous customer due diligence measures for casinos and other entities. Has the Ministry conducted a cost-benefit analysis on the operational feasibility and financial burden these measures may impose on smaller enterprises? Understanding the rationale and considerations behind implementing such stringent measures across diverse business sizes is critical.

Third, Mr Speaker, Sir, the success of this Bill hinges not only on the strength of its provisions, but also on the effectiveness of its implementation. The Bill emphasises coordination amongst various Ministries and agencies, such as the Gambling Regulatory Authority which oversees the Casino Control Act, amongst others. What measures are in place to ensure seamless coordination and avoid potential jurisdictional conflicts? Can the Minister elaborate on the framework designed to facilitate this interagency collaboration?

Fourth, Mr Speaker, Sir, while I recognise the necessity of information sharing to combat financial crime, it is critical to ensure that individual privacy is protected. The Bill also addresses the sharing of information among Suspicious Transaction Reporting Officers and regulatory bodies. What safeguards are in place to protect individuals' privacy? How do we ensure that the information shared is used solely for its intended purpose? Is there a timeline when information shared needs to be destroyed after its intended use? Given the sensitive nature of financial data, I believe it is paramount to address any potential privacy concerns comprehensively.

Fifth, Mr Speaker, Sir, it is important to understand how we measure up to international standards and best practices. The Bill aims to align with recommendations from FATF. Nevertheless, it would be valuable to understand how Singapore's approach compares with international best practices. Can the Ministry provide a comparative analysis highlighting why certain FATF recommendations were adopted while others were not?

Sixth, Mr Speaker, Sir, it is essential to ensure that the measures introduced in this Bill remain effective in the face of constantly evolving financial crimes. What mechanisms are in place to review the effectiveness of the new measures and make necessary adjustments? Regular evaluation will ensure that the legislation remains relevant and effective in combating evolving financial crimes.

In conclusion, Mr Speaker, Sir, Singapore has long been recognised for its commitment to upholding international standards in the fight against financial crime. This year alone, we have seen a slew of Bills introduced to tackle various aspects of financial crime, demonstrating our unwavering dedication to this critical issue. Despite these Bills, we have also seen a rise in the number of people wanted for money laundering and financial fraud in Singapore.

While I commend the Government for its efforts in introducing this Bill, I believe that it is essential to carefully consider the potential impact on specific groups, ensure operational feasibility and cost-effectiveness and establish robust safeguards for privacy and data protection. A thorough understanding of the comparative analysis with international best practices and the implementation of robust evaluation and review mechanisms will further strengthen this Bill and ensure its long-term effectiveness in safeguarding Singapore's financial integrity. I support this Bill.

Mr Dennis Tan.

Mr Speaker, this Bill seeks to amend certain Acts to give effect to certain recommendations of FATF to enhance the legal framework for preventing, investigating and prosecuting offences relating to money laundering and terrorism financing and so on. The recent infamous $3 billion money laundering case has cast a negative spotlight on Singapore. It is, therefore, important that the right lessons are learnt and applied, and laws and procedures are enhanced to prevent or minimise similar cases in future.

Mr Speaker, I would like to seek a clarification in respect of the amendment under clause 17 of the Bill, that is to say, section 372 of the CPC 2010. In MHA's press release of 2 July 2024, it was stated at paragraph 16 that, I quote, "...taken together, these amendments will prevent the premature release of seized properties while investigations are ongoing and avoid a situation where an absconded person evades investigations by staying out of Singapore and makes a successful claim to the seized properties because investigations have not been able to proceed". May I ask the Minister whether there has been a recent precedent, such as a recent case or precedent, such as from the recent $3 billion money laundering case, or has there ever been any precedent at all where an absconded person evaded investigations by staying out of Singapore and then made a successful claim to the seized properties as investigations have not been able to proceed?

Mr Speaker, in the recent $3 billion money laundering case, we read of mostly Cambodian nationals of Chinese origin setting up residency in Singapore, buying expensive real estate, posh cars and other types of valuables and properties. We read that, and I quote, "millions of dollars earned over the years from an illicit gambling ring were turned into luxury cars, extravagant watches, properties in Singapore's most lavish neighbourhoods, jewellery, designer goods, cryptocurrency and cold hard cash". And this is from a media report.

So far, we read of media reports of kickbacks received by property agents or bankers taking cuts for property purchases. But the purchase of these properties required various parties or professionals who should be obligated to do AML due diligence checks required by the authorities.

The money launderers could have brought monies into Singapore either by cash or by remitting monies to Singapore via their existing bank accounts. Where money was remitted to bank accounts in Singapore, the banks located in Singapore would have had the chance to do their AML due diligence searches. For those who bought real estate here, besides the banks, the real estate agents as well as the conveyancing lawyers would have been required to do AML due diligence checks, including especially on the source of funds they put up for payment.

I would like to ask the Government for the banks, lawyers, jewellers or other persons who helped with or handled any of the sales transactions for the different types of properties on behalf of the members of the $3 billion money laundering ring, whether all of them carry out the necessary AML due diligence searches. Did they file any suspicious transactions report? And if so, what were the authorities' responses to such reports?

Mr Speaker, a few years ago, I was among an early group of practitioners who had to complete a prescribed AML/CFT course and an AML/CFT proficiency test as part of new requirements by ACRA for anyone seeking to register or renew his registration as a Registered Filing Agent (RFA) of companies. The programme aims to ensure that RFAs are well equipped to comply with AML/CFT regulations through continuous education. RFAs have to fulfil the new requirements once every two years as a precondition for their renewal.

I passed the test but, subsequently, I did not remain an RFA. However, the course and the test left me with deep impressions. In particular, while strict adherence can be onerous, if all professionals and service providers were to take the AML due diligence checks seriously and conscientiously, one would have thought that they would greatly help to prevent, or at least to minimise, the bringing in or the utilisation of funds which are subject to prohibitions under the AML regulations.

So far, not much is directly disclosed about AML due diligence efforts of the bankers, property agents, lawyers or other service providers or sales agents who serve or assisted the convicted members of the $3 billion money laundering case. Will the Government share with this House what are the lessons learnt from this case, if any, in respect of the adequacy of the current AML due diligence efforts required of the banks, property agents, sellers of precious stones or metals, lawyers and other service providers involved?

Mr Speaker, I look forward to the Minister's clarification. Notwithstanding the clarifications I seek, I support this Bill.

Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 3.50 pm. Order.

Sitting accordingly suspended

at 3.31 pm until 3.50 pm.

Sitting resumed at 3.50 pm

[Deputy Speaker (Ms Jessica Tan Soon Neo) in the Chair]

ANTI-MONEY LAUNDERING AND OTHER MATTERS BILL

Debate resumed.

Mr Leong Mun Wai.

Mdm Deputy Speaker, before I begin, I would like to declare my interest as the founder and CEO of a fund management firm. With my past experience as the head of a leading local stockbroking company, I am aware of the challenges and temptations faced by financial institutions with regard to money laundering.

The Progress Singapore Party (PSP) welcomes the move by the Government to enhance the legal framework for preventing, investigating and prosecuting money laundering offences through this Bill.

Over the past year, many Singaporeans have been shocked by the scale of the $3 billion money laundering scandal. Our nation's reputation as a rule-based financial centre has taken a great hit.

As one of the premier financial hubs in Asia, we are structurally exposed to money laundering. People from all over the world want to park their money here because they know that their money will be safe. This has created huge economic benefits for our financial industry and PSP recognises this.

But we want the money to be legitimate. Integrity is the most enduring competitive advantage for a global financial centre. We believe that even if the trade-off for taking a tougher stance against money laundering is slower growth of our financial services industry in the short term, it is a worthy trade-off in the long term.

It is vital that we take steps to protect our reputation by tightening our legal and sentencing framework to deter money laundering. We support the Government's decision to reduce the standard of proof for money laundering offences.

Under clause 11 of the Bill, the prosecution will no longer need to show under the CDSA the direct link between the criminal conduct and the monies allegedly laundered in Singapore. It will be sufficient for the prosecution to prove beyond reasonable doubt that the money launderer knew, or had reasonable grounds to believe, that he was dealing with criminal proceeds. This is a step in the right direction, which will enhance the prosecution's ability to pursue and prosecute money launderers.

However, I am also concerned whether this will also lead to banks adopting an overly cautious approach towards restricting or closing bank accounts out of concern for potential legal consequences, thus hindering legitimate transactions. Does the Ministry envision any safeguards to protect legitimate customers who may be inevitably caught in such a scenario?

We also support the move to reduce the threshold for casino operators to perform customer due diligence when they enter into cash transactions with patrons or receive deposits. However, at the same time, I would like to know whether there is a maximum cap on the amount of cash that a casino can accept in one transaction. For example, are our casinos allowed to take in cash exceeding $1 million in one go?

Madam, most importantly, even though the Bill has strengthened the legal framework for money laundering offences, we are concerned that the sentences that have been meted out to the recent $3 billion money laundering case do not provide sufficient deterrence against Singapore being used as a base to launder the proceeds of illicit activities.

We maintain the mandatory death penalty for serious drug trafficking offences because of the immense harm caused to drug abusers, their families and the community. But are we doing enough to punish money launderers who may be trying to conceal money which originated from drug trafficking or other serious illegal activities?

In his written reply to my PQ on 8 May 2024, the Minister for Home Affairs told me that the risk of imprisonment is an important deterrent against money laundering. I agree to that.

However, to an ordinary Singaporean, the jail terms of 13 to 17 months meted out to the nine men and one woman involved in the $3 billion money laundering case appear to be relatively short, especially given that the CDSA provides for jail terms of up to three to 10 years, depending on the nature of the money laundering offences.

In recent years, there have been an increasing number of Singaporeans being caught for being money mules. In many cases, they handed over their bank accounts and private information in exchange for small amounts of money, usually in the range of hundreds of dollars each time.

Some of these offenders have been sentenced to imprisonment for periods of two to three months for their offences. In comparison, the offenders of the $3 billion money laundering case got to enjoy a luxurious lifestyle worth millions of dollars in Singapore for several years before they were caught. Are the jail terms of 13 to 17 months proportional to the crimes they have committed, when compared to those of the money mules?

It would be appropriate for me to ask at this juncture this question. With money laundering in the billion-dollar scale only attracting up to 17 months of imprisonment, what sort of money laundering crimes did the Government envision would potentially attract the maximum imprisonment sentences under Part VI of the CDSA?

The Inter-Ministerial Committee Reviewing Singapore's Anti-Money Laundering Regime will publish its full findings and recommendations in the fourth quarter. PSP hopes that one of its recommendations will be to strengthen the sentencing regime and increase the deterrent effect against money laundering by way of imprisonment.

We understand that MHA most recently reviewed the adequacy of the prescribed penalties against money laundering only in 2023. However, we believe that the sentencing regime should be reconsidered, given the relatively short jail terms that were handed down to those who had been caught in one of the largest anti-money laundering operations worldwide.

Can I also ask the Minister if the Sentencing Advisory Panel will consider issuing an advisory on the sentencing framework for offences under the CDSA based on the lessons learnt from the $3 billion money laundering case?

Finally, for any anti-money laundering regime to be effective, besides the perpetrators, strong actions against the gatekeepers like the banks and other financial institutions who contravene the rules are necessary. Can the Minister tell us for each of the banks and corporates involved in this case, the actions that have been taken against them and the internal actions these institutions have taken so far to strengthen their AML Regime?

Following the review of the Inter-Ministerial Committee, we hope we will further strengthen the penalties against banks, other financial institutions and their senior management who contravened anti-money laundering rules. Mdm Deputy Speaker, in Mandarin, please.

(In Mandarin): Fellow Singaporeans, the $3 billion money laundering case has severely damaged our country's reputation as an international financial center and has had adverse effects on our society. PSP supports the Government in amending several related laws following the money laundering case, including the CDSA Bill being discussed today, to strengthen our enforcement efforts against money laundering.

PSP believes that the most important aspect of the anti-money laundering regime is proper sentencing. Many Singaporeans feel that the 13 to 17 months of imprisonment meted out to the 10 individuals involved in the $3 billion money laundering case is not sufficient to deter and prevent money laundering in Singapore. We would like to ask, under the existing CDSA, whereby money launderers can be sentenced to 3 to 10 years of imprisonment, why the offenders in the $3 billion money laundering case were only sentenced to 13 to 17 months? Furthermore, we hope the Minister can clarify, under what circumstances that money launderers can be sentenced to the maximum penalty?

PSP believes that in order to prevent money laundering and uphold Singapore's reputation and moral values in our society, we should increase the sentencing of money launderers and take strong measures against the implicated financial institutions.

(In English): PSP supports the Bill. For country, for people.

Mr Neil Parekh.

Mdm Deputy Speaker, thank you for allowing me to participate in this debate on this important legislation.

This Bill seeks to send a strong signal to the international community that Singapore is fully committed to combating money laundering.

I also believe the importance of this Bill in strengthening anti-money laundering and counter-terrorism financing measures can improve trade relations with other countries, as partners will have greater trust in Singapore's regulatory framework.

Singapore’s compliance with the recommendations made by the Financial Action Task Force will increase confidence among international investors and financial institutions and help attract more foreign capital. This is quite evident from the healthy inflow of investments we continue to see, as reported in in the recent announcements by the Economic Development Board (EDB) and by the Ministry of Trade and Industry (MTI).

By cracking down on illicit activities, the Bill helps protect legitimate businesses from being undermined by unfair competition from entities engaged in money laundering or financing terrorism.

I believe the Bill may also lead to development of new services and products in the financial sector such as advanced compliance software, consulting services, and anti-money laundering and counter terrorism financing training programmes.

Furthermore, the need for enhanced compliance can spur innovation in Regulatory Technology or regtech, leading to the development of new solutions to help businesses comply with the regulations more efficiently, positioning Singapore as a leader in the regtech innovation.

However, despite many favourable outcomes for the overall economy, this Bill could lead to certain challenges for businesses especially SMEs.

Implementing stringent AML/CTF measures often requires significant investments in technology, staff training, and process changes, which can be financially burdensome. Compliance costs may also increase substantially leading to closure of some SME businesses. While some consolidation in this sector may be necessary there is also a risk that overly stringent regulations might stifle innovation and entrepreneurship. Businesses might be hesitant to engage in new ventures or adopt innovative practices due to the fear of non-compliance or excessive regulatory scrutiny.

Mdm Deputy Speaker, I have a few clarifications for the Minister.

First, regarding the scope and application of this Bill, could you please specify which businesses and sub-sectors are directly affected by the new AML/CTF regulations? Are there any exemptions for small businesses or any specific sub-sectors?

Secondly, is there a stipulated timeline for businesses to comply with the new regulations? Also, are there any transitional provisions provided to help businesses adjust to these new requirements?

Thirdly, how do our regulations align with international AML/CTF standards and the recommendations of the Financial Action Task Force? Are there any specific international guidelines that businesses should be aware of?

Lastly, could you please also clarify the procedures and measures for ensuring privacy and security of collected customer data?

Mdm Deputy Speaker, notwithstanding these clarifications, this Bill has my full support.

Mr Zhulkarnain Abdul Rahim.

Mdm Deputy Speaker, I rise in support of this Bill. Singapore has a comprehensive Anti-Money Laundering Regime centered around the three pillars of prevention, detection and enforcement. This Bill helps us to continue to be responsive to new threats in the future that threatens the status and confidence in Singapore as an international financial hub.

My speech is focused on the amendments: firstly, to remove the requirement to trace back the assets or proceeds as benefits of criminal conduct overseas; secondly, the early sale of seized assets; and lastly, tightening the criteria for third parties to claim assets linked to absconded persons still under investigations.

On the first amendment, the law as it currently stands requires the Prosecution to prove that property or assets are benefits of criminal conduct. This is quite difficult to do especially in sophisticated financial transactions, with layers after layers of sophisticated transactions, across various jurisdictions and split over different amounts. Some are even converted into other types of assets to further mask the transactions.

It will be tough to conduct the tracing exercise to the predicate offence which usually occurs overseas. In fact, even if the account or asset holder admits that he or she has acted as a money mule or has given up control of the account to receive and transfer such illicit funds, that alone may not be enough to prosecute. As such, I welcome the amendments to remove this requirement.

Jurisdictions like Hong Kong, Canada and Australia have already done away with such requirement to prove that the property or asset in question came from or are benefits of the criminal conduct.

However, I have some clarifications and suggestions.

Firstly, I understand that there is still a requirement to prove whether or not the subject was involved in the financial or property transfer. May I confirm that this is still the burden of proof for the Prosecution to discharge? And that it is not presumed that the accused is in receipt of illicit funds just because the last transfer of monies went into his or her account.

Secondly, what level of involvement would the subject have to be, in respect of the transfer? Is this to be referenced similarly to an objective test as to whether or not he or she ought to have known that such monies were criminal proceeds?

Next, I welcome the amendment to allow for the early sale of seized properties. This is especially important for seized assets like vessels or specialised items. In my previous experience as a maritime lawyer, I arrest vessels to secure maritime lien and admiralty claims on behalf of clients and if no release has been made, then through the Sheriff, the arrested vessels will be put up for sale.

However, the process will be long and expensive. While the vessel is still under arrest and if the owner has abandoned the vessel, the arresting party has to foot the bills for the wages and sustenance of the crew, security guards, repairs and maintenance, bunkering costs, insurance coverage, port dues, and many other expenses. And the longer the vessel sits under the arrest, the higher the exposure of liability on the arresting party. For instance, in one case that I had, the Master or the captain of the vessel, fell and suffered a chipped tooth and needed medical attention. In another case, a homesick crew with special extenuating circumstances had to be repatriated and change of crew had to be made.

All of these means more costs and risks will be saddled on the arresting party. We cannot have the same situation saddled on our law enforcement agencies as this will be a burden on taxpayers.

For specialised items that are being seized, they also may require special storage with the right temperature and humidity conditions to ensure that the value and veracity of the items are preserved. Handbags, watches and other high luxury items fall into such category.

I have six clarifications.

Firstly, how much has been spent by MHA annually to preserve or maintain such seized items? What is this in terms of percentage of the value of the seized assets? Will MHA look at setting a standard threshold set for the costs of maintenance in terms of percentage of the value of the seized assets, beyond which it will be unfeasible to continue to retain those assets under seizure because this then will provide clear guidance?

Secondly, I understand that the CPC and CDSA will be amended to allow the Court to order the sale of the seized or restrained property without the consent of all parties involved. However, what are the safeguards to balance the rights on interested parties in the assets? For example, will ample notice be given by way of advertisement to ensure that any interested parties can attend the Court hearing to be heard before the sale of the assets?

Thirdly, before determining that such assets can be sold, what are the steps that can be taken to ensure that any evidential value from the property or asset has been extricated and preserved? For example, through the cloning of any metadata, photographs and videos of the assets, anything and everything that may have evidentiary value to the investigations must already been taken, before such assets can be sold.

Fourthly, the prerequisite to such early sale is that the asset may depreciate in value or undue costs will be involved in the maintaining of the property and that the sale will be in the interests of justice. Hence, will the relevant law enforcement agencies consult industry valuation experts who are familiar with such properties or assets to determine the risk of depreciation?

Fifthly, what are the safeguards to ensure that the sale of the seized assets is for the right value and made to genuine purchasing parties. For example, in the standard Sheriff’s Condition for Sale of vessels, the Court's approval will be required to sanction any accepted bids below the appraised value.

Lastly, what are the safeguards to ensure that the value of the seized assets continue to be protected even after the sale order has been made? For instance, it will be better to approach a calibrated sale rather than flooding the market with many items, all being put up to auction all at once. Alternatively, married deals through specialised auction houses for a specific group of accredited bidders, can be made to ensure the exclusivity of the offer and higher bid returns.

Next, on third parties' claims to properties linked to absconded persons. Usually, the perpetrators not only mask their illicit activities and transactions through layering of transfers and transactions but also through putting such assets in the names of proxies like family members or friends. Hence, I welcome the amendments to the CPC to tighten the criteria of any ownership claims by third parties over assets linked to absconded persons. No longer can such parties hide behind the excuse that these ill-gotten gains are gifts made to them.

The amendments bring the position in line with the common law principle in AB Partners Pte Ltd v PP. In any case, the common law principles of presumption of advancement or gift still apply to family members like spouses or children. Hence, it is incumbent upon this group of third parties to prove that if the assets are not gifts, how are they able to afford the assets with regard to their own income, revenue or savings. This is only fair.

I do have a small clarification in this regard. In law, there is the concept of "equity's darling" – a bona fide purchaser for value without notice. Hence, family members or friends who are truly not proxies need not fear this amendment if they can show how they gave value to the acquisition and how they came into ownership of such asset. However, what about gifts or donations made or pledged to charities or foundations with a social cause? Will such assets be clawed back, given that they are linked to the absconded persons?

In this regard, I have a suggestion. In a previous response to the Parliament, MHA has explained that the forfeited assets and cash will go to the Consolidated Funds. Perhaps, we can set aside a portion of such forfeited assets to be put up to benefit the larger community by establishing some criteria or guidelines.

For example, in Australia, the Proceeds of Crime Act 2002 establishes a scheme to confiscate proceeds of crime and allows for such confiscated funds to be used to benefit the community. Under section 298 of the Australian Act, confiscated proceeds of crime can be reinvested in programmes for relevant purposes, including crime prevention and law enforcement. There is also a call for a grant to be provided for deserving programmes under such a scheme.

If Singapore has a similar lever, then such assets that have been pledged or donated to charities that are recognised and accredited in Singapore can also stand to benefit those charities, assuming that the charities played no part in the commission of the offence.

Mdm Deputy Speaker, notwithstanding the aforesaid clarifications, I stand in support of the Bill.

Assoc Prof Razwana Begum.

Mdm Deputy Speaker, I stand in support of the Anti-Money Laundering and Other Matters Bill. The Bill seeks to amend several other Acts and aligns with the recommendations of the Financial Action Task Force.

[Mr Speaker in the Chair]

Mr Speaker, the $3 billion money laundering case uncovered last year has captured the public's attention. Many wondered how this was possible in a country that is known internationally for being safe, crime and corruption free, and having sound governance. Such cases not only contribute to a negative image of Singapore, they also have direct implications on the public safety and security of Singapore and Singaporeans.

Mr Speaker, Singapore is a global financial hub, which makes it an attractive target for illicit financial activities. Measures that enhance anti-money laundering improve the integrity of our financial systems and foster trust and confidence among domestic and international investors and stakeholders. Additionally, they assist to protect the country's reputation, deter criminals from exploiting our financial infrastructure and safeguard the broader economy from the adverse effects of financial crimes.

Importantly, strengthening anti-money laundering is also crucial for public safety and security as it helps prevent the flow of illicit funds that can be used to finance terrorism or drug trafficking or other criminal activities.

Mr Speaker, Singapore has already taken proactive steps to address money laundering. At the opening of the Financial Action Task Force Plenary Meeting in June 2024, Prime Minister Wong announced the National Asset Recovery Strategy with the objective of deterring money laundering in Singapore by stripping criminals of their illegal profits. The amendments proposed in this Bill aim to actualise the National Asset Recovery Strategy, namely, by allowing greater flexibility to law enforcement agencies so they can detect illicit funds, seize illegal proceeds, maximise asset recovery for restitution and deter the use of Singapore as a haven for illicit wealth.

Mr Speaker, I welcome the proposed amendments. However, I do have some clarifications. Before I do so, I would like to note that I am currently the Head of the Public Safety and Security Programme at Singapore University of Social Sciences.

Mr Speaker, the Bill seeks to enhance levers for prosecution of money laundering cases arising from criminal conduct abroad. I understand the importance of prosecuting so-called money mules and I agree that we need to take timely and firm action against those who circumvent the law. I am, however, concerned about individuals who may be more easily subject to exploitation or coercion, including young people, migrant workers, people with disabilities or women and how we best respond if these individuals have unwittingly or involuntarily become involved in money laundering activities.

Perhaps the Ministry should consider some sort of education campaign to remind people to be vigilant to the risks of unknowingly getting involved in money laundering activities and what to do if they suspect that someone is trying to engage them or someone they know in illegal activities.

I am also concerned about how we respond if charities or non-profit organisations are being exploited for the purpose of money laundering. Perhaps the Ministry should also consider a similar education campaign targeting the community sector.

Mr Speaker, I welcome the suggestion to designate foreign environmental crimes as money laundering predicate offences. However, given Singapore's fortunate position of not experiencing significant environmental crime, I would like to know what training and awareness programmes are in place to assist our officials to identify, detect and investigate crimes that may occur overseas.

Furthermore, successful prosecution of environmental crimes often requires international cooperation. What kind of support is provided to officials to enable them to better collaborate and cooperate with international stakeholders?

Mr Speaker, the Bill enables cross-agency data sharing. This initiative will significantly enhance our ability to detect and prevent financial crimes at an early stage. By sharing data, the Suspicious Transaction Reporting Office can improve its analyses of money laundering, terrorism financing and proliferation financing risks, thus providing more comprehensive intelligence to law enforcement agencies and government regulators.

Given the importance of public awareness in assisting to prevent crime and enhance community confidence, perhaps the Ministry could provide regular update reports on current risks.

Mr Speaker, AI has the potential to be a significant game changer in the global fight against money laundering and financial crime. The Financial Action Task Force acknowledges the importance of innovative approaches to enhance Anti-Money Laundering and Countering Financing of Terrorism activities.

In addition to approaches currently utilised and taken by the COSMIC platform and the STRO, I would like to know how generative AI is being utilised to tackle the issue of money laundering in Singapore and what future plans are in place to integrate advanced AI technologies in this effort.

Relatedly, I would like to know if the Ministry has considered enhancing the COSMIC platform alongside the STRO to strengthen efforts in preventing money laundering activities in Singapore.

Mr Speaker, the measures to seize and restrain properties linked to suspected criminal activities aim to reduce property maintenance costs, preserve the value of these properties and enhance subsequent asset recovery and restitution to victims.

My clarification relates to the process of restitution to victims. Specifically, how is restitution established and what happens to the proceeds if victims are unidentified or cannot be located? In such cases, would the Ministry consider diverting unclaimed or unallocated funds to a general victim compensation fund?

Finally, aligning the Anti-Money Laundering and Countering Financing of Terrorism framework for casino operators with FATF standards is crucial.

Regarding proliferation financing risks, what strategies or programmes are currently in place to educate and support casino regulators in detecting unlawful activities? Is there a need to further strengthen and raise awareness among individuals working in this sector? If so, what specific measures will be taken to achieve this?

In conclusion, as we strengthen our efforts against money laundering, we must reinforce the foundations of our financial systems and uphold global standards of transparency and accountability. Mr Speaker, by implementing the measures proposed in this Bill, we can deter criminal activities and ensure that Singapore remains a secure, trusted and resilient financial hub for future generations.

Mr Sharael Taha.

Mr Speaker, the recent $3 billion money laundering case has illuminated the clandestine activities and loopholes that money launderers exploit as well as their intricate cross-border operations. I would not dwell into the specifics of the particular case, but suffice to say, with billions of dollars involved, many are questioning how this could happen in Singapore, what measures can be taken to prevent a recurrence and whether our current safeguards are adequate.

I am glad that this Bill, amongst many others, would strengthen our stance on anti money laundering.

On the one hand, the arrest of the individuals involved in these money laundering activities, despite their complex cross-border operations, instils confidence in the capabilities of our Police Force to handle such intricate cases. On the other hand, it underscores the need for more robust measures to prevent money laundering crimes and to empower our law enforcement agencies to seek justice more effectively when a crime has been committed.

Hence, the proposed amendments to the Bill are crucial. They aim to enhance the ability of our law enforcement agencies to pursue and prosecute money laundering offences and to clarify and improve our processes for dealing with seized or restrained properties linked to suspected criminal activities. These steps are vital for strengthening our anti money laundering efforts.

While I stand in support of the Bill, I have a few clarifications for the Minister.

Firstly, in Part 2 of the amendment to section 56 of the Corruption, Drug Trafficking and Other Serious Crimes Act, Clause 10 states that the prosecution does not need to show a direct link between the criminal conduct and the monies allegedly laundered in Singapore. It would be sufficient for the prosecution to prove beyond a reasonable doubt that the money launderer knew or had reasonable grounds to believe that they were dealing with criminal proceeds.

This is a welcomed change as it enables the prosecution of money mules in cases where money is laundered through bank accounts and intermediaries in foreign jurisdictions before entering Singapore. However, I have a few concerns.

How will we address situations where money launderers use innocent, unaware victims within Singapore to deceive and mislead investigators? How can we ensure adequate protection for these innocent victims?

I have encountered cases where the bank accounts of suspected mules were frozen for months, only to be cleared of any wrongdoings. In some instances, their accounts remain frozen for over three months, leaving them without access to their funds. How can we better protect innocent victims in such scenarios?

Secondly, in Part 3 of the amendment to the Criminal Procedure Code, clauses 14 to 17 allow for the sale of seized or restrained properties. I have a few questions regarding this.

What is the threshold for the depreciation in value of the properties for the Court to order their sale? In cases where the seized properties are vehicles, does this then imply that the vehicles should be sold off as soon as possible to recover the maximum value?

Mr Speaker, the amendments in the Bill are crucial. They aim to enhance the ability of our law enforcement agencies to pursue and prosecute money laundering offences. However, we must also ensure that the amendments to the Bill are implemented effectively and justly, safeguarding the interests of innocent parties while enhancing our anti money laundering efforts.

Notwithstanding the clarifications above, I stand in support of the Bill.

Mr Don Wee.

Mr Speaker, Sir, I support the proposals in the Anti-Money Laundering and Other Matters Bill to combat money laundering (ML) and related crimes more effectively. Mr Speaker, Sir, in Mandarin.

(In Mandarin): Does the revised law allow banks to hold assets for a certain number of days after a Suspicious Transaction Report (STR) is filed, so that the Suspicious Transaction Reporting Office (STRO) can decide whether to issue a seizure order?When a customer instructs a bank to make a payment and the bank holds the transaction pending STRO approval, how does the law prevent tipping off the customer that an STR has been filed, which could prejudice ongoing investigations?

Regarding the proposal to allow Government agencies to share information and data with one another, it must be done, in order to facilitate and expedite investigations and prosecution. However, I have some concerns about this arrangement too.

How will the Government ensure data privacy and security with the increased sharing of sensitive tax and trade data information? Will there be a heightened risk of shared data misuse and, if so, what preventive measures will be in place to mitigate this risk? Will the Ministry share what kind of guidelines and oversight mechanisms have been established to prevent data misuse and ensure accountability? I urge the Ministries involved to implement robust data encryption and access control measures.

(In English): The prosecution will no longer be required to show a direct link between the money which had entered Singapore and the associated foreign crimes. Would the Minister share which specific challenges are anticipated in the process to prove that the individuals knew they were dealing with criminal proceeds and how will these be addressed?

Next, about the proposed change to designate serious foreign environmental crimes as money laundering predicate offences, how will the authorities manage the increased workload and complexity arising from the inclusion of foreign environmental crimes like illegal logging? May I suggest that we develop agreements and protocols for cooperation with foreign jurisdictions to streamline evidence gathering and information gathering? We also need to provide training and resources to law enforcement agencies to handle the complexities of international money laundering cases.

I strongly support the proposal to allow the Court to order the sale of seized or restrained properties linked to suspected criminal activities. I would like to ask, how will the courts determine the "interest of justice" when deciding to sell the seized properties in the absence of unanimous consent. What procedures will be put in place to ensure fair and transparent sale of the seized assets? How will the Ministry ensure a transparent process for the valuation and sale of seized assets? Will public auctions or third-party assessments be conducted? I hope the proceeds from the sale of seized properties can be used to support victims and further crime prevention efforts.

Finally, regarding the lower threshold for cash transactions and deposits at casinos, do the authorities expect any impact on the operations of casinos? What support will be provided to casino operators to comply with the new regulations? Would the Ministry also consider a phased approach to give casinos time to adjust their processes and systems?

Mr Edward Chia.

Mr Speaker, Sir, I support the proposed amendments to the Anti-Money Laundering and Others Matters Bill.

Singapore plays a pivotal role as a global financial hub. As such, our financial regulations should align with international standards to preserve our reputation. Singapore's reputation has an immense impact on job creation and securing good jobs for Singaporeans. These amendments, along with four other Bills passed since May 2023, collectively enhances our defences against money laundering. This is a critical aspect of our commitment to global financial integrity.

I also recognise that these amendments' roles in fortifying our defences against illicit activities. These enhancements, along with previous amendments, bolster our enforcement capabilities. They also provide us with the tools needed to effectively combat bad actors.

However, the successes of these measures depends on their implementation and the perceptions of those responsible for their enforcement, especially our compliance officers. We need to ensure these regulations are communicated. Compliance officers must have an accurate understanding of the intents and specifications of the various AML amendments and avoid taking an overly-conservative approach that places excessive compliance burdens.

Striking a balance is essential, as being too strict or too lenient can be detrimental. Excessive conservatism can stifle legitimate financial activities, deter investment inflows and negatively impact job creation. Therefore, compliance officers must find a middle ground that ensures regulatory compliance without imposing unnecessary constraints.

Mr Speaker, Sir, I seek clarification on a specific point, namely clause 16. This introduces friction for individuals trying to establish entitlement to properties linked to absconded persons.

There are concerns that these new laws might deter legitimate investments and businesses, particularly, by increasing the risk of property seizure, impacting investments. While we understand the necessity of these amendments, there is a perception that they may confer excessive power on the Police to seize properties without due Court process. This raises questions about the impact on the perception on foreign investors.

It is important to consider the psychological aspect. In Singapore, we enjoy a high trust in our society and law enforcement agencies. This may make these measures seem fair to our citizens. However, foreign investors may come from societies with lower trust in similar institutions. Their concerns about potential overreach should be addressed.

Therefore, I would like to ask the Minister, what specific powers do the Police have under clause 16. What are guardrails are in place to prevent a potential overreach? Furthermore, how can we assuage concerns from our international investors regarding these powers?

Next, I would like to address a significant issue related to compliance, particularly within the financial and real estate sectors.

There is feedback from the ground, including private bankers, that compliance officers are interpreting regulations with an overly-conservative approach. For example, a client who has purchased a property and received the Temporary Occupation Permit is now being retroactively asked to prove the source of funds.

Also, investors are questioning whether real estate developers can depend on the Know Your Client (KYC) and due diligence conducted by banks. This cautious approach can sometimes seem excessive and it has led to perception that Singapore is becoming an onerous place for investment and that Singapore is no longer open for business.

Given the measures in this Bill and the four AML-related amendments enacted since May 2023, there is a concern that this could unduly increase the compliance burden on our industries, particularly in finance and real estate. Could the Minister ensure that these amendments do not lead to an excessive compliance burden?

It is important to note that compliance officers in different industries have varied timelines to adjust to new regulations. For example, the finance industry has had a longer period to develop KYC policies, compared to the real estate industry. There is also a concern about uneven standards of personal data protection. Therefore, we need to support these industries in levelling up their compliance practices for consistent application.

Additionally, could we provide clear guidance to compliance officers to ensure they do not adopt overly conservative approaches that could deter investment and hinder our economic growth?

Mr Speaker, Sir, these regulations intend to safeguard our financial systems. However, they must not, inadvertently, create a heavier compliance load or foster negative perceptions. While we aim to strengthen our defences against illicit activities, our approach should also foster a dynamic economic environment.

Mr Saktiandi Supaat.

Mr Speaker, Sir, the topic of AML has been a subject of numerous speeches and PQs since news of the $3 billion money laundering case broke in August 2023. Since then, the last of the 10 offenders have been convicted and deported from Singapore just last week.

So, I am sure most of my Parliamentary colleagues would agree with the principle behind this Bill – to enhance and clarify our powers to combat attempts to use Singapore's trusted reputation for illegal activities. However, I would like to take the opportunity to seek the Minister's clarifications on the implementation of a tighter AML, terrorism financing (TF) and proliferation financing (PF) regime.

First, on the timing of this Bill.

In the Ministerial Statements regarding the billion-dollar money laundering case last year, it was announced that an Inter-Ministerial Committee, comprising officeholders across MAS and various Ministries, would look into keeping our AML regime up-to-date.

The latest announcement was that the Inter-Ministerial Committee is due to share its full findings and recommendations in the fourth quarter of 2024. May I ask the Minister is there a reason why this Bill is being tabled before the Committee's full findings and recommendations are shared for this House's consideration? Is there a special urgency for the measures that are proposed in this Bill?

As was pointed out in the Ministerial Statements of October 2023, we must avoid a "knee-jerk" reaction to the billion-dollar case. We must balance any responsive measures with the consideration that there are still legitimate business and fund flows, which we do not want to unduly impede.

With that consensus, would it be more expedient to consider our AML strategy in the round after the Inter-Ministerial Committee's findings and recommendations are known? That way, we can fashion a more holistic update of our regime, as compared to making piecemeal tweaks at various times. That would also allow businesses and investors to undertake a single review of their operations and compliance policies and keep compliance costs competitive.

Just as an illustration, I note that the Bill is lowering the monetary threshold for casinos to perform CDD measures when it is entering into a single transaction of $4,000 or more with a patron. By way of comparison, the Precious Stones and Precious Metals (Prevention of Money Laundering, Terrorism Financing and Proliferation Financing) Act 2019 (PSPM Act), sets the threshold amount at $20,000 for a dealer of precious stones and metals to perform CDD measures. How are these quantitative thresholds set? We should ensure that they do not come across as arbitrary.

Mr Speaker, one aspect of the Bill, which clearly appears to be triggered by the recent case, is the new power to convert seized property to cash under certain circumstances, without the consent of all parties involved.

When I asked a PQ back in May 2024, Minister Shanmugam updated that the Police had incurred about $646,282 as of March 2024 for the storage, maintenance and safeguarding of the seized assets. How much more have been spent to store, maintain and safeguard properties, vehicles and luxury goods to date? What is the amount of depreciation suffered from the time that the various assets were seized? How much of the seized assets have yet to be appropriated to the consolidated fund for Government use?

The new powers will allow the Police or the Public Prosecutor to apply to Court for an order of sale if the property is likely to depreciate in value, if keeping or maintaining the property would be dangerous, unduly costly or not reasonably practicable or if the sale would be in the interests of justice. Can the Minister please clarify, what circumstances would fall under the "interests of justice" limb? If these proposed powers were available in 2023, for example, what are the types of assets which would have been sold after they were seized in the billion-dollar case?

I note that the Bill also contains new provisions to prevent absconded persons from making successful claims to seized properties. May I ask how commonly has this occurred over the past 20 years? What is the value of seized properties that absconded individuals have been able to make away with and how have they managed to obtain delivery of such properties from the authorities despite being absent from jurisdiction?

Clause 11 of the Bill also seeks to make it easier for the Prosecution to prove a money laundering offence. The Prosecution will no longer need to provide the full chain of how the monies laundered in Singapore are traced to the benefits or gains from criminal conduct, as long as they can show that the money launderer knew or had reasonable grounds to believe that the person was dealing with the benefits from criminal conduct.

Does this mean that someone can be criminally liable as a money launderer if he mistakenly believes that he is dealing with ill-gotten gains, or must the monies dealt with still need to be attributable to criminal conduct? If it is the latter, what would be the standard of proof required?

This change comes slightly a year after we had tightened our laws to act against money mules, who sell or use their payment and Singpass accounts for criminals to receive or transfer money. May I ask if there was a reason why we did not make the present amendment then as well?

The Bill also introduces amendments to allow Government agencies to share tax data and trade data with Singapore's Financial Intelligence Unit, the STRO of CAD. Sectoral regulators, such as the CEA and ACRA, will also be given access to STRs filed by their respective regulated entities.

As explored in the clarifications to the Ministerial Statements last year, the key is not in an indiscriminate blasting of the confidential STRs to anyone who wants them, but to be clear about who is the central node who is making sense of all the STRs and the data that is being reported and fed to. Who will play the role of this central node or do we envisage a semi-decentralised system where different regulators keep an eye on different scopes? Is there merit in setting up a central coordination point like the Anti-Scam Centre does for our scam-fighting efforts?

An effective solution must harness an ability to access information across different spheres. This would include the developed system of STRs that are now regularly filed by our financial institutions. While I understand that MAS is taking a phased approach in the implementation of the COSMIC platform, starting with six major commercial banks, is there an update on when we would consider if it can be extended for use by a larger audience, including other non-financial institution gatekeepers, such as law firms and accounting firms? What is the status of the implementation of COSMIC and what are some of the lessons learnt so far?

Finally, given the new laws to enhance detection and enforcement against money laundering and improve our processes to deal with seized or restrained properties linked to suspected criminal activities as well as increasing frictions for any person connected to an absconded person to establish his entitlement to properties and assets, may I ask if MHA and MAS can reassure concerns that the new laws will not deter legitimate investments and businesses as well as lead to higher compliance costs and layers in the financial sector?

The concern is that it may lead to higher risks of seizures and impact wealth flows. Can MHA and MAS share their assessment of these new laws impact on the financial sector flows either directly or indirectly? Would it be possible for the relevant agencies to engage the financial sector's compliance departments, to clarify that the efforts are targeted and aimed solely on illegitimate investments and should not be taken as a further broad tightening on all investment flows?

So, I look forward, Mr Speaker, to seeing the Inter-Ministerial Committee's findings and recommendations later this year. Among other things, I think it is key to our AML objectives to focus on parts of the ecosystem that have not been regulated or as closely regulated. For example, high-value assets, such as luxury cars, bags and liquor, do not have the same structural regulation as financial instruments and real estate. But these are beyond the scope of this Bill.

Mr Speaker, Sir, notwithstanding the clarifications sought, I support the Bill to strengthen our AML/CFT regime.

Mr Louis Ng.

Sir, this Bill will enhance the powers of law enforcement agencies to pursue and prosecute money laundering offences, clarify our processes to deal with seized or restrained properties and put into effect certain recommendations of the FATF. This is a positive move that will strengthen both our ability to address the transnational nature of money laundering operations and tighten our internal anti-money laundering processes.

I have four points for clarification.

My first point, is on the lower threshold for the prosecution of money laundering cases arising from criminal conduct abroad. Under the amended section 56 of the CDSA, the prosecution will no longer need to prove, as a physical element of the offences that property dealt with by the defendant is, in fact, the benefits of drug dealing and criminal conduct. The rationale provided by the Ministry for removing the physical element is to remove the impediment that law enforcement agencies currently face in obtaining evidence from victims, entities and authorities outside jurisdiction.

To address evidential difficulties, there are other legal mechanisms, such as rebuttable legal presumptions. Can the Minister share why the Ministry considered legal presumptions to be insufficient for addressing the evidential difficulties, such that it had to resort to removing the physical element altogether?

Next, it is a defence if a defendant can raise a reasonable doubt as to whether the money laundered in Singapore were, in fact, benefits from criminal conduct. Given that the defendants in such cases may be money mules, who may have limited resources and access to financial institutions, can the Minister share examples of how practically a defendant might be able to show reasonable doubt?

I previously filed PQs on classifying wildlife crimes as serious offences in the Organised Crime Act 2015. On 5 October 2020, the Ministry said that no links with corruption, money laundering or fraud were established for cases of illegal wildlife trade in Singapore. On 2 November 2021 and 7 November 2022, the Ministry said that, where illegal wildlife trade seizures involve entities outside of Singapore, our enforcement agencies work closely with the source and destination countries and share information with international organisations, such as the Convention on International Trade in Endangered Species of Wild Fauna and Flora and INTERPOL.

In removing the physical element for prosecuting money laundering cases, the Ministry explained that documents from financial institutions of foreign countries to prove the trail of monies are dependent on the cooperation of foreign entities, which is often difficult to secure.

Is it the case, then, when no links were found between illegal wildlife trade and money laundering when cooperating with entities outside of Singapore, we were working on the basis of inadequate evidence? Will the amendments, then, allow us to more proactively tackle environmental crimes?

Beyond prosecuting money mules, can the Minister confirm that tracing the financial trails to prosecute the masterminds and kingpins behind these operations will remain a priority? If documents from financial institutions are difficult to secure, what other steps are being taken to improve the flow of information between countries?

My second point, is on the proposed sharing of data between Government agencies. Under the proposed Bill, STRO has powers to obtain information on personal tax and trade data from a number of Government agencies. The data that is obtained by STRO may be passed on to the AGC or other prosecuting agencies for use in prosecutions. The information may, then, emerge in open court trials. Can the Minister share what safeguards are in place when data is passed from one agency to another?

If a prosecution is brought based on evidence obtained by STRO from other agencies, would the data still be treated as confidential? Would the Prosecution apply to Court to redact or seal the documents? Or would the public interest in an open hearing mean that the information will no longer be treated as confidential?

The amended section 45 of the CDSA, allows STRO officers to disclose information disclosed by a regulated person to a regulator. Can the Minister share what factors STRO will consider in deciding what data to share with regulators? What are the purposes and limits on STRO's power to share data with regulators?

Can the Minister also share what happens to the data after there is no longer a need for STRO or regulators to possess the data? For instance, if it is determined, after investigations, that no wrongdoing has been committed, will STRO and regulators permanently delete the data obtained? If data is retained, what is the retention period for this data and where will the data be stored?

My third point is on the sale of seized or restrained properties. The amended section 35 of the CPC allows the court to order the sale of any property that is seized or restrained. One scenario where the court can do so is if the property is likely to be subject to depreciation.

Can the Minister clarify how the law enforcement agencies will determine if the value of the property is likely to depreciate? What factors or framework will be used by said agencies to determine the expected value of the property? Will there be a specific timeframe set by the agencies to determine the expected valuation of property within that timeframe? Will the agencies seek the assistance or expertise of professionals in determining the valuation of more niche assets?

One example of a highly volatile asset in today's landscape is cryptocurrency. How will law enforcement agencies determine the valuation of a defendant's cryptocurrency wallet, which is highly volatile?

The Ministry has stated that the powers relating to the sale of properties is to enhance restitution to victims. Can the Minister consider detailing how the proceeds of sales will be used for victim restitution? What factors will determine whether an individual qualifies to receive restitution? Further, what is the process for an individual to receive said restitution?

My fourth and final point, is on the designation of foreign environmental crimes as money laundering predicate offences. The Third Schedule to the CDSA recognises environmental offences, such as illegal mining, illegal logging and illegal wildlife trade, as serious offences in Singapore.

I welcome the Ministry's designation of illegal wildlife trade as a "foreign serious environmental offence". Defining and addressing wildlife crimes as transnational crimes is a step in the right direction.

As a possible next step, I would again propose classifying certain wildlife crimes as serious offences in the Schedule of the Organised Crime Act. I have previously spoken up about this suggestion, as the close links between wildlife crime and other organised crimes, such as drug trafficking and money laundering, constitutes a serious threat to public safety in Singapore.

This measure would empower our local enforcement agencies to effectively tackle wildlife crime. Further, it would have a strong signalling and deterrence effect against wildlife crime, both in Singapore and globally. Given this, can the Minister look into taking this next step to classify wildlife crimes as serious offences in the Organised Crime Act?

Notwithstanding these clarifications, Sir, I stand in support of the Bill.

Mr Desmond Choo.

Mr Speaker, I rise in support of the Anti-Money Laundering and Other Matters (Amendment) Bill. This legislation aims to fortify our financial system against the threats of money laundering, terrorism financing and the financing of weapons of mass destruction.

Singapore, known for its clean and transparent financial hub, remains a target for malicious actors. Against backdrop of the recent $3 billion money laundering case, it is crucial that we take decisive action to further strengthen our financial system.

The Bill proposes crucial amendments to the CDSA to simplify the prosecution of money laundering cases, particularly those with international ties. Currently, prosecutors must establish a direct link between criminal conduct and laundered money in Singapore. This is extremely challenging when funds move across multiple jurisdictions.

The proposed amendments remove this requirement to prove this physical link, allowing prosecution based on the intent of the accused. Prosecutors must, of course, still demonstrate beyond reasonable doubt, that the accused knew or had reason to believe that they were handling criminal proceeds.

This amendment strikes a necessary balance between facilitating prosecution and protecting individual rights. However, the subjective nature of the "reasonableness" standard requires careful monitoring. How would the Ministry be guided in determining what constitutes "reasonableness"? What are the precedent cases and judgments that would guide the Ministry?

The Bill also introduces a Third Schedule to the CDSA, categorising serious foreign environmental crimes as predicate offenses. This move is timely, reflecting the global urgency to combat environmental degradation. Offenses, like illegal mining, logging and waste trafficking, will now be recognised as serious offenses under our laws, aligning Singapore with international efforts to protect the environment.

To ensure effective enforcement, I ask the Ministry to clarify the measures it will implement to foster international cooperation in investigating these offenses. Establishing partnerships with global environmental agencies and enhancing information-sharing protocols will be essential.

The Bill also emphasises the importance of enhanced cross-agency data sharing to improve the detection of money laundering activities. Amendments to various Acts will enable agencies, such as IRAS and Customs to share data with STRO.

Given the increasing complexity of financial crimes, real-time data sharing is vital for timely intervention and regulatory action. Considering the recent data breaches, the Ministry must ensure that robust data privacy and security measures are in place within this framework. Strengthening data security protocols and conducting regular audits will be crucial to protecting sensitive information.

A key aspect of the Bill is the focus on leveraging technology to combat money laundering and other financial crimes. Technologies, like artificial intelligence (AI), blockchain and advanced data analytics, offer significant potential to enhance transaction monitoring and regulatory oversight. Can the Minister also share, how does the Ministry intend to use these technologies and to outline plans for further integration?

The Bill also amends the Casino Control Act to tighten requirements for casino operators regarding CDD checks. Under the new provisions, operators must conduct CDD checks for cash transactions or deposits of $4,000 or more, considering the risks of proliferation financing.

These changes align our regulations with international standards, ensuring that our casino sector remains resilient against money laundering and terrorism financing threats. However, it is also important to balance these new requirements with operational feasibility.

I suggest that the Ministry also consider a phased approach to introducing these requirements, accompanied by industry feedback sessions and consultations. The Labour Movement is ready to assist with any education or awareness sessions required. This phased implementation will help a smooth transition while upholding robust AML/CFT standards.

Mr Speaker, in conclusion, the Anti-Money Laundering and Other Matters (Amendment) Bill represents a significant step towards strengthening our financial system and aligning with international standards in the fight against financial crimes. I support this Bill.

Minister Josephine Teo.

Mr Speaker, I thank all 16 Members who spoke for their support of the Bill. I will respond to their speeches in two parts. The first part will be on the broad themes that they raised. The second part will be on specific questions.

One broad theme concerns the robustness of Singapore's anti-money laundering, or AML, regime. Members acknowledge that the Bill would further strengthen our regime. Some, like Ms He Ting Ru, advocate for more proactive legislation, although it is not clear, how much in advance, proactive means. At the same time, Members, like Mr Edward Chia, Ms Foo Mee Har, Mr Saktiandi Supaat and even Mr Leong Mun Wai, worry about the signal to legitimate investors and businesses.

In astronomy, there is a sweet spot known as the "Goldilocks Zone" where planets are orbiting at a distance from a star that is "just right". Any closer to the star and water on that planet turns into steam. Any further and the water will freeze. Neither scenario will support life as we know it.

Though just a character in a children's story, Goldilocks' famous approval of things that are "just right" has been applied many times over, including in regulations, to describe the desire to strike a right balance.

Is our AML regime within the "Goldilocks Zone", enough to deter criminals but not so much as to drive away legitimate investors? Here are some facts that strongly suggest that we are "in the zone".

Singapore was ranked third in the Global Financial Centre Index last year, behind only New York and London in terms of competitiveness. A broad range of factors was considered, including "Political Stability and Rule of Law" and "Institutional and Regulatory Environment".

The financial sector contributes to about 13% of our GDP and employs about 200,000 of our people in good paying jobs. It is also important for sustaining Singapore's vibrant business environment and growth in other sectors, such as legal and professional services.

In the last Mutual Evaluation of Singapore in 2016, FATF assessed Singapore to have a strong legal and institutional framework to fight money laundering, with highly sophisticated coordination involving all relevant authorities. While Singapore had achieved strong outcomes in some areas, FATF recommended improvements in others, such as DNFBPs, for example. Notwithstanding its recommendation, FATF's overall assessment of Singapore puts us in good company. The handout I had circulated earlier contains some further details that show this clearly.

Mr Neil Parekh and Mr Yip Hon Weng asked how our AML regime compares internationally. The Basel AML Index of 2023 ranked 152 regions around the world for money laundering risks. Singapore was placed within the lowest quartile, which means that more than 75% of the regions presented higher AML risks than Singapore, and they include Hong Kong and Japan.

We share Mr Yip's view that interagency coordination is critical for the successful implementation of our AML measures. To achieve this, we have established interagency mechanisms, such as the AML/CFT Steering Committee, co-chaired by the relevant Permanent Secretaries of MHA, the Ministry of Finance and MAS.

The fight against money laundering is a journey without end and our measures cannot come as one burst of fire with no further heat applied to the problem areas. This is, in fact, how we have worked in the past and how we will need to work in the future.

To Mr Saktiandi's question, we did not time this Bill to respond to any specific case. We continually review and tighten our regime in response to new threats.

To Mr Dennis Tan's question on what lessons have been learnt from the recent money laundering case, I have dealt with this comprehensively in my Ministerial Statement last year. Many further enhancements have been made. I thank Ms Foo Mee Har for mentioning some of those on our behalf.

Members will also recall that in April, we launched COSMIC, a digital platform which MAS co-developed with the major banks to allow financial institutions to share information with one another on customers whose behaviours are indicative of financial crimes. In June, we updated our Money Laundering National Risk Assessment as part of our ongoing efforts to raise awareness and guide all stakeholders to better detect key money laundering risks. We also launched our inaugural National Asset Recovery Strategy, which sets out Singapore's comprehensive approach towards the recovery of illicit assets from criminals for forfeiture and restitution to victims. We convened an Inter-Ministerial Committee, or IMC, to review our AML regime, which will publish its findings in the fourth quarter of this year.

We are pushing ahead with this Bill because it has been in the making for about two years and there is no value to hold it back once the work is done. Should the IMC recommend further measures that require legislative updates, we will plan for them to be enacted as soon as practicable.

Sir, the Government does not consider it a chore to keep our AML regime effective and robust. In fact, it is critical to our success as an international financial centre. We cannot be competitive if financial services are poorly regulated or if financial institutions and other gatekeepers here are inadequately supervised. Legitimate investors and asset managers will not feel sufficiently protected to flow their capital through Singapore.

On the other hand, poorly designed regulations will not keep out illicit money flows and may instead turn away legitimate businesses, to our detriment. More regulation and, sometimes, proactive legislation, do not always equal effective protection – we must be clear about that.

In short, we have zero tolerance towards criminals who exploit our financial system and have sought to get our AML regime "just right" by taking a risk-based approach in line with the FATF standards. This means that we must have a good understanding of the risks we face, including emerging trends and developments that are being exploited by criminals.

To prevent, detect and enforce against their illicit activities, we developed tools and frameworks which are fit-for-purpose, proportionate to the risks and effective. Guided by the principle of responding appropriately to risk, we have established a strong track record of providing a stable and predictable environment for businesses to thrive and investors to manage their wealth here. This will not change with the passage of the Bill.

Mr Chia, Ms Foo, Mr Parekh and Mr Saktiandi raised concerns about potential increases in compliance costs. To be clear, this Bill does not introduce any additional regulatory requirements in the financial and real estate sectors. The proposed amendments are very targeted. They seek to improve our law enforcement agencies' abilities to detect and enforce against illicit activities. The amendments will also not impose undue friction nor burden for legitimate businesses. In fact, we made it a priority to ensure that they are reasonable and practicable.

Nonetheless, I thank Members for raising concerns about knee-jerk reactions. It is not surprising to see financial intermediaries heighten compliance checks after major cases, especially in the sectors which the money launderers exploited.

Such vigilance is not a bad thing in and of itself. Gatekeepers do have an outsized role in our collective defence against money laundering. However, aligned with our overall approach towards money laundering, these checks need to be sensible and calibrated and not unduly impede legitimate businesses and investors. Sectoral regulators will continue to engage and work with the gatekeepers in the respective industries to level up compliance capabilities and to strike the right balance.

This approach also applies to the sectors which Ms He Ting Ru raised in her speech, namely, single family offices, cryptocurrency and fine art. While we do not disagree with the need to be vigilant, ultimately, what serves us best is a risk-based approach, which we have taken. This means not viewing all transactions with suspicion but looking into instances of concern.

Sir, I will now deal with specific queries about the Bill.

Mr Desmond Choo, Mr Don Wee, Mr Saktiandi and Mr Yip asked about the lowered threshold for customer due diligence checks, or CDD checks, and its impact on casino operations. FATF stipulates a lower CDD threshold of about S$4,000 for casinos compared to about S$20,000 for dealers in precious stones and metals based on the money laundering risks it has assessed for each sector. Other FATF jurisdictions are similarly expected to impose the same CDD threshold on their casino operators. While this would increase the number of CDD checks on patrons, it is unlikely to deter bona fide patrons from visiting the two casinos or affect their competitiveness.

To Mr Leong's question, while there are no limits to the amount that casinos can accept, casino operators will be required to conduct the necessary CDD checks, and be satisfied that the funds are from legitimate sources.

Assoc Prof Razwana Begum also asked about educating and supporting the casinos in tackling proliferation financing. The casino operators have already put in place processes to prevent and detect proliferation financing in line with FATF standards, such as monitoring of patrons for proliferation financing risks. The Gambling Regulatory Authority had consulted the casino operators on the revised CDD threshold and upcoming requirements to mitigate proliferation financing and they did not raise any concerns.

Mr Choo, Mr Derrick Goh, Ms Foo, Mr Louis Ng, Assoc Prof Razwana, Mr Saktiandi, Ms Sylvia Lim, Mr Wee and Mr Dennis Tan asked about the processes to enhance data sharing and sensemaking by STRO.

To Mr Tan's question on whether STRs were filed for the recent money laundering case, financial institutions and other companies had, indeed, filed STRs. The Police had looked into these alerts, as I shared in my Ministerial Statement last year. Where possible offences are detected, STRO disseminates financial intelligence to law enforcement agencies or regulators for further investigations and appropriate actions.

In response to Mr Tan and Mr Leong's queries, supervisory follow-ups and investigations had been conducted against the regulated entities and individuals relevant to the recent money laundering case.

The amendments will allow STRO to develop richer financial intelligence. STRO regularly engages gatekeepers and their regulators to discuss ways to enhance the quality of STRs filed and the efficiency of the processes. The amendments will further enhance upstream detection by allowing regulators to access the STRs filed by their regulated entities. This is already the case for regulators, such as MAS, MinLaw and the Gambling Regulatory Authority. After the Bill is passed, other prescribed regulators, such as ACRA and CEA, will also have such access.

The amendments do not change the existing process of how entities like the banks handle assets after filing an STR. STRO is not an approving authority. There is also no obligation for filers to withhold transactions unless, of course, they have assessed the risk to be unacceptable. Likewise, any tipping off or disclosure of information relating to the filing of STRs continues to be an offence under section 57 of the CDSA.

Like Mr Choo, Ms Foo and Assoc Prof Razwana, we recognise the need to leverage technology and optimise resources as we connect the dots in the sea of financial information. I shared previously that in February 2022, STRO commissioned an enhanced data analytics and management system to strengthen its ability to process large volumes of STRs and other data to be translated into richer financial intelligence. STRO will continue to update its capabilities to keep pace with the evolving operational needs and share relevant intelligence with the community of regulators and gatekeepers.

We agree with Mr Choo, Mr Ng, Mr Parekh, Mr Wee and Mr Yip on the importance of data safeguards. There are strong legal safeguards and information security protocols within STRO to protect and prevent unauthorised access to all data received by STRO, including tax and trade data. Only selected STRO personnel are authorised to request relevant tax or trade data from IRAS or Singapore Customs. They are strictly prohibited from onward sharing of the data.

Furthermore, STRO can only share the results of its analyses of tax and trade data. Where law enforcement agencies need tax or trade data for investigation or prosecution, they have to separately request them from the data owner. This is regulated under the legislation relevant to that data.

Next, I will touch on the amendments to section 56 of the CDSA. Mr Choo, Mr Goh, Mr Leong, Ms Lim, Mr Ng, Assoc Prof Razwana, Mr Saktiandi, Mr Sharael Taha, Mr Wee and Mr Zhulkarnain Abdul Rahim asked about the elements of proof, impact on victim restitution and international cooperation.

This amendment will allow us to better act against money laundering cases and to pursue persons who exploit our financial system, whether the subject is a money mule or kingpin. This would in turn facilitate confiscation of illicit monies and any subsequent restitution to victims.

To clarify, the Prosecution would still have to prove the physical element of the offence, namely that there was transferring, converting, receiving, or acquiring of the property by the accused. What is no longer required? Only the need to prove, as a physical element of the offence, that the property is in fact the benefits of criminal conduct.

The Prosecution would also have to prove the necessary fault element – that the person dealing with the monies knew, or had reasonable grounds to believe, that he was dealing with benefits of criminal conduct.

Other jurisdictions such as Hong Kong and Australia already have similar laws where there is no need to prove a direct link between the property and criminal conduct.

A few Members have questions on reasonableness, both what the Prosecution must do to show reasonable grounds and defendants can do to demonstrate reasonable doubt.

Members will appreciate that we are unable to provide examples of how a defendant might show reasonable doubt to counter the Prosecution’s assertion of reasonable grounds. Explicitly spelling this out may also unwittingly benefit criminals. Such a determination would be made by the Courts based on the specifics of the case. These are not matters unfamiliar to the Courts. Proof of reasonableness is something that they deal with all the time.

An innocent person engaged in legitimate business should easily be able to show that the monies received were not benefits from criminal conduct and that he did not have the necessary fault element. Legitimate businesses that do not break the laws in Singapore, therefore, need not worry about this amendment.

The Police will continue to raise awareness on the consequences of being unwittingly involved as money mules or in other criminal activities through advisories and public education campaigns.

On international cooperation, Singapore actively leverages MLA arrangements with bilateral counterparts and multilateral platforms, such as INTERPOL’s Global Rapid Intervention of Payments, Egmont Group and the Asset Recovery Interagency Network Asia Pacific, to trace, intercept and freeze criminal proceeds.

We will strengthen our partnership with international colleagues when there are good opportunities to do so.

To Ms Lim’s question, Singapore received MLA requests from 53 foreign jurisdictions in 2022 and 56 foreign jurisdictions in 2023. The Government does not disclose the foreign jurisdictions from which we have received MLA requests, so as not to prejudice ongoing foreign criminal matters.

Mr Goh, Mr Ng, Assoc Prof Razwana and Mr Wee also spoke on the introduction of the Third Schedule to CDSA, including its intent, impact on Police training and resourcing, and whether it would apply retrospectively.

The introduction of a Third Schedule to the CDSA will allow law enforcement agencies to investigate money laundering offences arising from foreign serious environmental crimes, which they were previously not able to do. This Schedule will be reviewed periodically, in tandem with evolving money laundering risks. We will also regularly review the training and resourcing of law enforcement agencies to equip them with the capabilities to deal with these risks. This amendment will not be applied retrospectively.

Ms Foo, Mr Ng, Mr Saktiandi, Mr Sharael Taha, Mr Wee and Mr Zhulkarnain sought clarifications on the processes involved in the early sale of seized property, including how law enforcement agencies assess whether a property is likely to depreciate, how the Court would determine whether the sale would be in the interests of justice, how the sale process would secure competitive prices, as well as the safeguards to ensure fairness.

The underlying intent of these amendments is to preserve the value of seized or restrained properties, at reasonable costs. Examples of assets which may be eligible to be sold under the amendments include vessels and vehicles.

It might not be practical or desirable to set a standard threshold for the costs of maintenance or depreciation beyond which the seized assets will be sold. The timeframe for assessment of the value of a seized property will depend on factors such as the estimated length of the investigations or court proceedings, and the expected rate and extent of depreciation of the value of the property.

Agencies will generally look at open-source market value trends or seek expert opinion. Mere fluctuations in valuation will not be sufficient for the Court to order an early sale. Seized properties will only be put up for early sale when there is no evidential value from the actual property that is necessary for investigations or court proceedings.

Before the application to the Court for the sale, law enforcement agencies will notify all known parties by delivering the notice personally through registered post or other prescribed modes of delivery under the CPC. If any person objects to the sale, he can raise this for the Court’s consideration. Furthermore, the Court can only order the sale of the property if it is satisfied that the costs of sale are, or are likely to be reasonable.

There are also established protocols on the conduct of the sale of seized property. In general, law enforcement agencies would follow established industry practice for the sale of particular properties, which can include public auctions or direct sale.

The Court will also have the flexibility to order the early sale of a property if the sale would be in the interests of justice. In determining so, the Court may take into account various factors, such as the interests of the parties involved and whether there would be any injustice caused by the sale.

To Mr Ng's and Assoc Prof Razwana's questions on victim restitution process, this Bill does not change the current process. Victims with an interest in the property will be duly notified and the Court will assess what they are entitled to.

As Ms Foo, Mr Saktiandi and Mr Zhulkarnain have pointed out, the Police have incurred over $600,000 in the last financial year, to maintain the seized assets in the recent case. This is the latest we have, as the Police track the consolidated expenses on an annual basis. They also do not track the costs of asset depreciation. Seized assets will only be appropriated to the consolidated fund after the Court has ordered their disposal and they have been converted into cash.

Of the $3 billion in seized assets, $944 million have been forfeited and are in the process of being converted and appropriated into the consolidated fund. Investigations are still ongoing for the remaining assets.

Mr Chia, Mr Tan, Mr Goh, Mr Saktiandi and Mr Zhulkarnain asked about the amendments to deal with seized properties linked to absconded persons, including their impact on foreign investors and the relevant safeguards. We thank Ms Foo’s for recognising that the amendments here, and I quote her, "strike at the heart of criminal networks and reinforce the principle that crime does not pay".

To be clear, the proposed amendments do not change our existing thresholds for the seizure of properties, as expressly provided under the CPC – they concern the procedure for the disposal of seized property. Law enforcement agencies are empowered to seize properties only in certain circumstances, as expressly provided for under sections 35 and 78 of the CPC. One such circumstance is when the law enforcement agency suspects that the properties are evidence of an offence.

Under the proposed amendments, the seized properties will continue to be dealt with in accordance with the CPC and subject to judicial oversight. Interested persons can make their claims to the relevant Court and the Court will determine their entitlement to the properties and deal with it as appropriate.

The mere fact that the seized property was a gift will not be sufficient, without other evidence, to prove a person’s entitlement to the property. This will similarly apply to any donations by absconded persons that may have been seized.

There have been cases where persons, who were under investigation here but remained overseas, appointed counsel to apply for the release of their funds while investigations were ongoing. While there have been no successful claims by absconded persons thus far, the scenario of an absconded person remaining overseas to frustrate investigations while making a claim for his seized properties is a real possibility. Thus, we act proactively.

As to whether this has been observed with the absconded persons in the recent money laundering case, investigations are still ongoing and I can only say that none of them have returned to Singapore so far.

I reiterate these proposals are targeted at absconded persons, as well as properties linked to them. Legitimate investors have nothing to worry about.

I will now deal briefly with the other questions and suggestions which are outside the scope of this Bill.

Mr Leong asked about the adequacy of our sentencing regime. This issue was dealt with during the Parliamentary Sitting last month and there is nothing more to add. But allow me to reiterate the key points for the benefit of Members who may not have seen the written reply.

First, the maximum penalties for money laundering under the CDSA are comparable with the sentencing regime in other jurisdictions, such as Japan, Switzerland, New Zealand, Germany and France.

Second, the sentenced meted out for money laundering would depend on the nature of the offence. The penalties for money laundering offences in the CDSA are comparable to those for other serious offences that are similar in nature, like cheating and forgery. The penalties meted out to convicted subjects can only be for the offences committed in our jurisdiction and not for the offences they may have committed outside of our jurisdiction.

Third, the Courts independently considered the facts of the case to decide on the appropriate sentence. Generally, the Courts considered factors such as the length of the offending conduct, the culpability of the accused persons as well as the mitigating factors such as the accused person's plea of guilt and whether he has shown any remorse such as by voluntarily disgorging his illicit proceeds of crime.

Mr Ng has suggested that wildlife crimes will be prescribed as a serious offence under the Organised Crime Act. The Government is studying his suggestion carefully and will respond on this matter separately.

On Mr Goh, Assoc Prof Razwana and Mr Saktiandi’s questions about COSMIC, MAS will be providing updates in due course.

To Ms He's suggestion on the whistle-blowing programme, we will look into all leads that are worth investigating, whoever provides the information.

On Ms He's suggestion of an Omnibus Bill for AML, it may be ideal but there is a trade-off between tidiness and timeliness. We have to be practical because there are existing laws, and it is easier said than done to try and put everything together. What is most important is whether together our laws help us prevent, detect and enforce against money laundering effectively. And I believe the answer is that as we continue to update these laws through amendments such as those that are proposed today, we can keep our anti-money laundering regime robust and effective, whilst ensuring that our interest in promoting and strengthening our financial ecosystem is not compromised.

Mr Speaker, once again, I thank Members for their support of the Bill. I beg to move.

Are there clarifications for the Minister? Ms Sylvia Lim.

Thank you, Speaker. I have one clarification for the Minister. Earlier in my speech, I talked about STRs and I noted that in a previous reply by the Minister for Home Affairs, he had indicated that out of the STRs filed, 20% of them led to or assisted in the investigations.

So, I wanted her comment on whether she finds that this percentage of 20% indicates that the quality of STRs still needs beefing up or is this percentage acceptable for some other reason?

Thank you, Mr Speaker. It is a very interesting question and I think it is a reminder to us not to take any single number on its own and forget the context.

If you look at 20% of a very large number of STRs, are we happier that filers have chosen to surface information that they are concerned about and then we manage to find that only 20% of them are useful, or are we happier that they are very sparse with their filing and then the base becomes very small, but those that you can act on may be very high, and are you better off under those circumstances?

I would say that we are not overly seized by a single number, but the point that the Member made is still a relevant one, which is that gatekeepers and their sector regulators need to improve the way in which they are looking at transactions and their effectiveness in identifying those that are suspicious.

So, that is the process that is still ongoing, and I think because the landscape for money laundering will change very quickly, what may look like very obvious signs of financial crime today will be superseded by new types of behaviour that deserve greater attention. So, that is, I think, the greater emphasis of where our efforts need to be.

Mr Leong Mun Wai.

Speaker, I have three questions for the Minister. First, she said there is no limit for the casinos to accept cash. So, can the Minister confirm that the casinos are actually allowed to take in more than a million dollars in cash in one go? And, if possible, can we know what is the maximum amount of cash that our casinos have accepted? This is the first question.

The second question is, while she said that the 13 months and 17 months sentencing given to the offenders are in line with international standards, can I ask whether, in the IMC review, will we be demonstrating our resolve further to look at this sentencing regime? Is it part of the review that the IMC will do?

And my last question is, can the Minister update us what are the actions taken against all the institutions that are involved in this $3 billion money laundering case?

Mr Speaker, I think, with respect, I would request the Member to file PQs to his first and third questions. He asked specifically about what casinos may have received in terms of cash proceeds from their customers and from their patrons. I do not have the information offhand. So, respectfully, I would ask the Member to file a PQ if it is something that he is very interested in. And I believe his third question is also in terms of the actions. They do not relate directly to this Bill. So, respectfully, please file a PQ.

The Member did talk about sentencing and I think I have responded to it in my round-up speech. The Member himself has referred to Minister Shanmugam's reply to the Member at the Sitting in May. To reiterate, the sentencing regime is quite comparable to other leading jurisdictions. What the Courts decide to mete out by way of the sentence itself is something for the Court to decide. And I have explained earlier what are the factors that the Courts look into. I think one thing that we need to keep in mind is that, ultimately, the Courts must consider what crime was committed within our jurisdiction. The sums may be very large, but what was the activity in Singapore that constituted the crime? That is something we have to keep in mind.

Any other clarifications for the Minister? I do not see any.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Mrs Josephine Teo].

Bill considered in Committee; reported without amendment; read a Third time and passed.