PM Lawrence Wong at the Financial Action Task Force Plenary (Jun 2024)
Speech by Prime Minster and Minister for Finance Lawrence Wong at the Financial Action Task Force Plenary on 26 June 2024.
President of the FATF, Mr Raja Kumar,
FATF Delegates and Observers,
Ladies and Gentlemen,
Let me start by extending to all delegates a very warm welcome to Singapore. This year marks the 35th anniversary of FATF. I would like to take this opportunity to congratulate FATF on reaching this milestone.
FATF was originally formed with 16 members to stop drug traffickers and cartels from laundering their ill-gotten gains.
Today, it has become a global organisation with a wider mandate. The standards developed by FATF are used by over 200 jurisdictions to combat money laundering, terrorism financing and proliferation financing.
Your efforts have ensured the safety and integrity of the global financial system and made the world a safer place.
In recent years, the rise of digital transactions has made it easier to buy and sell goods and services. But it has also presented new opportunities for criminals to commit crimes, like scams.
The advent of virtual assets and increasing availability of digital payment channels have also made it easier for criminals to move and hide their illicit proceeds. They are able to operate across borders, and exploit the information silos that exist between national law enforcement agencies.
No country can address these threats by itself. That is why the FATF’s work in leading a coordinated global effort has become more important. In this regard, I am glad to note the progress that FATF has made over the recent years in addressing these challenges.
First, in the interception of illicit funds.
According to INTERPOL, around US$2 to US$3 trillion worth of illicit proceeds are channelled through the global financial system every year. A very small fraction of these criminal assets is intercepted and recovered. Which means that criminals can largely get away with, and profit handsomely from their crimes.
To address this, FATF has revised its standards to improve international cooperation, for example, by requiring countries to recognise and enforce each other’s court orders on the confiscation of assets.
FATF also worked together with INTERPOL to bring operational experts and policymakers together to discuss best practices in asset recovery, and enhance collaboration between law enforcement, financial intelligence units and policymakers.
It is early days in this drive to enhance global asset recovery. The latest figures from INTERPOL showed that recovery rate from illicit funds have improved. From less than 1% a decade ago, to about 3% this year. 3% actually is still low, we need to do better. But at least we are moving in the right direction, and we can aim for even higher recovery rates in the years to come.
The second achievement that FATF has made in the recent years is in improving transparency of legal entities, like companies and trusts, which can be used to hide criminal activities. Of note, FATF has updated its standards to require the disclosure of additional information that can allow law enforcement agencies to better identify the real owners behind these entities.
The third achievement that FATF has made is to identify ways to break down information silos. It is understandable why law enforcement agencies and private financial institutions would want to put safeguards around their information concerning their sources and clients. However, these safeguards create silos that criminals can exploit to hide their tracks. To address this, FATF has recommended ways that information can be shared between law enforcement agencies and financial institutions, and amongst private financial institutions, that are within acceptable guardrails.
Singapore supports these effort as we have seen the benefits when such information silos are broken down.
Earlier this year, our central bank, the Monetary Authority of Singapore, launched a platform for private financial institutions to securely share information with each other on customers that exhibit red flags. This enables them to better detect criminal networks and activities.
Our Singapore Police Force established an Anti-Scam Centre – where officers from law enforcement agencies, the major banks, and online e-commerce platforms all sit together at one venue, one site, to facilitate real-time coordination in tracing suspicious fund flows and freezing illicit monies.
We have seen positive outcomes from such initiatives. We have been able to detect fraud earlier and recover more monies for victims.
Singapore is fully committed to doing our part. As an international financial and business hub, we recognise that we face greater money laundering and terrorism financing risks. But we are determined to do what is needed to respond to these risks and safeguard Singapore’s reputation as a trusted financial centre.
To this end, we continually review and strengthen our legal frameworks to make them in line with the FATF’s standards.
Over the past few years, we have tightened our regulations to increase transparency on beneficial ownership; introduced new regulations; and strengthened existing laws to address risks related to virtual assets, as well as precious stones and metals dealers. We have also strengthened our laws to give our law enforcement agencies more tools and powers to pursue, prosecute and sanction offenders for money laundering offences.
We have made asset recovery a priority in our national anti-money laundering regime. Later today, Singapore will publish our first ever National Asset Recovery Strategy, which will set out how we will deprive criminals of their illicit funds and assets, remove the financial incentives for criminals to launder their illicit proceeds in Singapore, and return these assets to victims.
Singapore takes a strong approach against financial crime. But zero tolerance does not mean zero occurrence.
Even the most stringent anti-money laundering regimes can be circumvented by determined criminals who will continuously search for gaps to exploit.
It is also important that our measures are not over-zealous and do not unnecessarily stifle legitimate activities and investments.
So we adopt a risk-based approach. We focus on understanding the latest trends and developments in the financial world that can be exploited by criminals, and we develop tools and legal frameworks that will allow us to detect suspicious individuals and activities early.
Our approach has enabled us to take quick and strong enforcement action against criminals who try to use Singapore to launder their illicit funds.
In August last year, our law enforcement agencies conducted one of the largest anti-money laundering operations in the world.
After we picked up signs of illegal activities, we undertook extensive investigations.
And we seized more than S$3 billion in assets from 27 suspects.
10 suspects have since been convicted within a year of their arrest. Around S$940 million of their assets have been forfeited to the State, which is more than 90% of what we seized from them.
Investigations are ongoing against the 17 other suspects who are currently overseas.
The experience and lessons gleaned from this operation will be used to strengthen our regulations and enforcement.
I am confident that the FATF will continue to make significant progress under the incoming Mexican Presidency, where we will embark on the upcoming round of mutual evaluations to help members strengthen their regulatory and enforcement regimes in the face of ever-evolving threats.
On that note, I wish you a fruitful and productive Plenary meeting in Singapore.
FATF Delegates and Observers,
Ladies and Gentlemen,
Let me start by extending to all delegates a very warm welcome to Singapore. This year marks the 35th anniversary of FATF. I would like to take this opportunity to congratulate FATF on reaching this milestone.
FATF was originally formed with 16 members to stop drug traffickers and cartels from laundering their ill-gotten gains.
Today, it has become a global organisation with a wider mandate. The standards developed by FATF are used by over 200 jurisdictions to combat money laundering, terrorism financing and proliferation financing.
Your efforts have ensured the safety and integrity of the global financial system and made the world a safer place.
New Threats
While we have made progress, criminals are always looking for opportunities and loopholes to exploit. The fight against financial crime is an ongoing battle, and we must stay vigilant and continually evolve to tackle new threats.In recent years, the rise of digital transactions has made it easier to buy and sell goods and services. But it has also presented new opportunities for criminals to commit crimes, like scams.
The advent of virtual assets and increasing availability of digital payment channels have also made it easier for criminals to move and hide their illicit proceeds. They are able to operate across borders, and exploit the information silos that exist between national law enforcement agencies.
No country can address these threats by itself. That is why the FATF’s work in leading a coordinated global effort has become more important. In this regard, I am glad to note the progress that FATF has made over the recent years in addressing these challenges.
First, in the interception of illicit funds.
According to INTERPOL, around US$2 to US$3 trillion worth of illicit proceeds are channelled through the global financial system every year. A very small fraction of these criminal assets is intercepted and recovered. Which means that criminals can largely get away with, and profit handsomely from their crimes.
To address this, FATF has revised its standards to improve international cooperation, for example, by requiring countries to recognise and enforce each other’s court orders on the confiscation of assets.
FATF also worked together with INTERPOL to bring operational experts and policymakers together to discuss best practices in asset recovery, and enhance collaboration between law enforcement, financial intelligence units and policymakers.
It is early days in this drive to enhance global asset recovery. The latest figures from INTERPOL showed that recovery rate from illicit funds have improved. From less than 1% a decade ago, to about 3% this year. 3% actually is still low, we need to do better. But at least we are moving in the right direction, and we can aim for even higher recovery rates in the years to come.
The second achievement that FATF has made in the recent years is in improving transparency of legal entities, like companies and trusts, which can be used to hide criminal activities. Of note, FATF has updated its standards to require the disclosure of additional information that can allow law enforcement agencies to better identify the real owners behind these entities.
The third achievement that FATF has made is to identify ways to break down information silos. It is understandable why law enforcement agencies and private financial institutions would want to put safeguards around their information concerning their sources and clients. However, these safeguards create silos that criminals can exploit to hide their tracks. To address this, FATF has recommended ways that information can be shared between law enforcement agencies and financial institutions, and amongst private financial institutions, that are within acceptable guardrails.
Singapore supports these effort as we have seen the benefits when such information silos are broken down.
Earlier this year, our central bank, the Monetary Authority of Singapore, launched a platform for private financial institutions to securely share information with each other on customers that exhibit red flags. This enables them to better detect criminal networks and activities.
Our Singapore Police Force established an Anti-Scam Centre – where officers from law enforcement agencies, the major banks, and online e-commerce platforms all sit together at one venue, one site, to facilitate real-time coordination in tracing suspicious fund flows and freezing illicit monies.
We have seen positive outcomes from such initiatives. We have been able to detect fraud earlier and recover more monies for victims.
Singapore’s Commitment
Through the collective efforts of FATF and its partners, we have made progress against money laundering and terrorism financing at the global level. But the success of the global effort against financial crime is also dependent on effective implementation within national borders.Singapore is fully committed to doing our part. As an international financial and business hub, we recognise that we face greater money laundering and terrorism financing risks. But we are determined to do what is needed to respond to these risks and safeguard Singapore’s reputation as a trusted financial centre.
To this end, we continually review and strengthen our legal frameworks to make them in line with the FATF’s standards.
Over the past few years, we have tightened our regulations to increase transparency on beneficial ownership; introduced new regulations; and strengthened existing laws to address risks related to virtual assets, as well as precious stones and metals dealers. We have also strengthened our laws to give our law enforcement agencies more tools and powers to pursue, prosecute and sanction offenders for money laundering offences.
We have made asset recovery a priority in our national anti-money laundering regime. Later today, Singapore will publish our first ever National Asset Recovery Strategy, which will set out how we will deprive criminals of their illicit funds and assets, remove the financial incentives for criminals to launder their illicit proceeds in Singapore, and return these assets to victims.
Singapore takes a strong approach against financial crime. But zero tolerance does not mean zero occurrence.
Even the most stringent anti-money laundering regimes can be circumvented by determined criminals who will continuously search for gaps to exploit.
It is also important that our measures are not over-zealous and do not unnecessarily stifle legitimate activities and investments.
So we adopt a risk-based approach. We focus on understanding the latest trends and developments in the financial world that can be exploited by criminals, and we develop tools and legal frameworks that will allow us to detect suspicious individuals and activities early.
Our approach has enabled us to take quick and strong enforcement action against criminals who try to use Singapore to launder their illicit funds.
In August last year, our law enforcement agencies conducted one of the largest anti-money laundering operations in the world.
After we picked up signs of illegal activities, we undertook extensive investigations.
And we seized more than S$3 billion in assets from 27 suspects.
10 suspects have since been convicted within a year of their arrest. Around S$940 million of their assets have been forfeited to the State, which is more than 90% of what we seized from them.
Investigations are ongoing against the 17 other suspects who are currently overseas.
The experience and lessons gleaned from this operation will be used to strengthen our regulations and enforcement.
Conclusion
To conclude, Singapore is honoured to have held the Presidency of the FATF over the past two years, and we would like to thank all FATF delegations for your support. The accomplishments over the past two years would not have been possible without your continued commitment to our shared mission and contributions to the FATF’s work.I am confident that the FATF will continue to make significant progress under the incoming Mexican Presidency, where we will embark on the upcoming round of mutual evaluations to help members strengthen their regulatory and enforcement regimes in the face of ever-evolving threats.
On that note, I wish you a fruitful and productive Plenary meeting in Singapore.
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