Central Bank of Singapore has raised its watch against money launderers who are increasingly using shell companies to hide their transactions. Over the past year, banks had closed accounts of several onshore shell companies after detecting unlawful transactions.

Valerie Tay, head of Anti-Money Laundering department at the Monetary Authority of Singapore (MAS) said, “When we looked deeper into the risks, we realized that while criminals may still be using offshore companies, actually they have shifted to using onshore companies to evade detection. When the modus operandi of criminals shifts to evade detection and the industry isn’t vigilant enough, the criminals can get their way.”

As one of the world’s leading financial centres and trade hub, Singapore is particularly vulnerable to money laundering due to large cross-border flows. The relative ease of starting a business in Singapore renders it potentially more vulnerable to misuse of shell firms. Disproportionately large or high velocity transactions and unusual patterns in dealings are red flags in shell companies, according to MAS.

MAS has instructed banks to “actively look for shell companies that can be abused for illicit financing. So, there’s a supervisory expectation for pro-active detection and disruption of illicit finance.”

In 2015, Singapore had identified that funds to 1MDB had been laundered by way of its banking system. In response, MAS took corrective measures like shutting down the native models of two personal banks, froze financial institution accounts, charged personal bankers and imposed fines on banks.

 

Date: 14 August 2019

Argus Global specializes in regulatory compliance. We can help you determine if your company is up to date with the latest regulations with compliance reviews, and we offer as well ongoing support for all your compliance needs.

 

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