SINGAPORE, July 3 — The Republic is stepping up its fight against financial crime, with the Monetary Authority of Singapore (MAS) laying out several moves to address issues such as money laundering and terrorism financing.

Financial crime is a “serious global threat” with the amount of money laundered every year coming up to 2 to 5 per cent of global gross domestic product (GDP), or between US$800 billion (S$997 billion) and US$2 trillion, showed estimates by the United Nations.

“The challenge before us — as is often noted — is that the fight against money laundering and financing of terrorism is never done,” MAS deputy managing director (financial supervision) Ong Chong Tee said in his keynote speech at the ABS Financial Crime Seminar on Tuesday.

“Rapid advancements in information, communication and payment technologies have led to great conveniences around speed, ease and often anonymity, so these developments also open up more potential loopholes and avenues for perpetrators to escape detection.”

A National Risk Assessment report published in January identified “cash intensive” and “internationally oriented” businesses, such as casinos and remittance agents, as high-risk sectors for money laundering and terrorism financing. The report also identified emerging risk areas such as virtual currencies and large-value deals in precious stones and metal.

One of the steps the MAS is taking to lower such risks is to discontinue the issuance of S$10,000 notes from Oct 1. Existing notes in circulation will remain legal tender, including those under the Currency Inter-changeability Agreement with Brunei, but worn notes returned to the MAS will not be replaced.

“The development of more advanced and secured electronic payment systems has reduced the need for large-value cash-based transactions. Therefore, we do not expect the discontinuation of the note’s issuance to create any major inconvenience,” Mr Ong said.

OCBC’s head of branch and group premier banking Sunny Quek told TODAY the bank does not foresee major issues arising from the discontinuation as few customers ask for S$10,000 notes. “Very few of our customers carry out transactions using S$10,000 notes. Those who do so are typically our high-net-worth customers and are usually for special occasions like Chinese New Year,” he said.

The central bank is also looking at reinforcing its preventive supervisory approach by publishing details of “more severe penalties” imposed on financial institutions that breach anti-money laundering (AML) and counterterrorism financing requirements.

“The announcement today that the MAS will progressively increase the level of disclosure on supervisory actions taken for breaches … is a positive move in the spirit of raising awareness of money laundering and what needs to be done to effectively combat it,” said Mr Lem Chin Kok, partner leading AML and Sanction Services at KPMG in Singapore.

“For these changes to be effective, compliance officers must understand and see the spirit of the changes as guidance to help them manage the risks of money-laundering transactions. Simply trying to interpret and meet the minimum requirements for compliance will merely make these changes part of a lengthier tick-box exercise.”

In addition, the MAS plans to launch a public consultation later this month on proposed amendments to its regulatory framework to tighten checks against money laundering and terrorism financing.

The proposed amendments include requiring banks to screen customers, tightening the threshold for enhanced measures on cross-border wire transfers and providing a risk-based approach for politically exposed persons.

The Association of Banks in Singapore (ABS) welcomed the measures outlined by the MAS to combat financial crime. Its spokesperson said: “(We) support these progressive measures as we do not want Singapore and its financial system to be used to perpetuate money laundering and terrorist-financing activities.”

Its sentiment is shared by OCBC, whose head of legal and regulatory compliance Loretta Yuen said: “Singapore’s rigorous regime is critical for combating the increasingly sophisticated methods used by money launderers and terrorists to conceal the source and use of funds.

“Financial institutions need to be constantly one step ahead in detecting irregular activities and devising counter measures, given the growing complexity of such activities.

“We will continue to work closely with the regulators, which have been providing vital guidance to financial institutions, and cooperate with and share information among industry participants in our ongoing efforts against new and emerging threats.”— TODAY