Anti-Money Laundering and Other Matters Bill enhancing AML/CFT regime passed: Key takeaways from second reading

20 August 2024

On 6 August 2024, the Anti-Money Laundering and Other Matters Bill (“Bill”) was passed in Parliament. The Bill, which was introduced on 2 July 2024, seeks to:

  • enhance the ability of law enforcement agencies to pursue and prosecute money laundering (“ML”) offences;
  • clarify and improve processes to deal with seized or restrained properties linked to suspected criminal activities; and
  • align the anti-money laundering and countering the financing of terrorism (“AML/CFT”) framework for casino operators with the Financial Action Task Force (“FATF”) standards.

On 2 July 2024, the Ministry of Home Affairs (“MHA”) issued a press release explaining the changes that the Bill will introduce, details of which are explained in our article “Anti-Money Laundering and Other Matters Bill introduced: Key amendments and enhancements to AML/CFT regime”.

MHA has published the opening and closing speeches by Josephine Teo, the Minister for Digital Development and Information and Second Minister for Home Affairs (“Minister”), at the second reading of the Bill. The following are some notable points covered in the second reading:

  • Risk-based approach: Singapore’s anti-money laundering (“AML”) regime is calibrated to strike a balance between deterring criminals and not driving away legitimate investors. The Government’s risk-based approach, which is aligned with the FATF’s recommendations, involves the Government developing tools and frameworks which are fit-for-purpose, proportionate to the risks, and effective.
  • Lower threshold for customer due diligence (“CDD”) in casinos: The threshold for casino operators conducting CDD checks will be lowered from the current threshold of single cash transactions involving S$10,000 or more, or deposits into a deposit account involving S$5,000 or more, to cover single cash transactions or deposits involving S$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. While this would increase the number of CDD checks on patrons, it is unlikely to deter bona fide patrons from visiting Singapore’s two casinos or affect their competitiveness.
  • Enhancements in data sharing and financial intelligence: The Bill will introduce amendments to allow any AML/CFT regulator to have access to suspicious transactions reports (“STRs”) filed by their respective regulated entities. Regulators will have greater insight into the risks and trends relating to their sectors, and be able to take more effective supervisory and regulatory actions. The amendments do not change the existing process of how entities like the banks handle assets after filing an STR. The Suspicious Transaction Reporting Office (“STRO”) is not an approving authority. There is also no obligation for filers to withhold transactions, unless they assess the risk to be unacceptable.

Guardrails for the data sharing will be implemented, to protect data confidentiality. STRO has strong legal safeguards and information security protocols that 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 the Inland Revenue Authority of Singapore or Singapore Customs and are strictly prohibited from onward sharing of the data. STRO can only share the results of its analyses of tax and trade data. Law enforcement agencies have to separately request tax or trade data from the data owner if such data is needed for investigation or prosecution.

  • Prosecution of ML cases: The Bill will introduce amendments 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 or she was dealing with were the gains from criminal conduct.

The Prosecution will still have to prove the physical element of the offence, i.e. that there was transferring, converting, receiving, or acquiring of the property by the accused. The Prosecution will also have to prove the necessary fault element, i.e. that the person dealing with the monies knew, or had reasonable grounds to believe, that he or she was dealing with benefits of criminal conduct.

  • Designation of serious foreign environmental crimes as ML predicate offences: The Bill will introduce a new Third Schedule to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992, designating specific serious foreign environmental crimes as ML predicate offences 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 risk-based approach taken here is aligned with FATF’s recommendations. This amendment will allow law enforcement agencies to investigate ML offences if it is suspected that the monies in Singapore are derived from such serious environmental crimes committed overseas.

This Third Schedule will be reviewed periodically, in tandem with evolving ML risks. The Minister also clarified that the Third Schedule will not be applied retrospectively.

  • Court empowered to order sale of seized or restrained property without consent of all parties involved: The Bill will amend the Criminal Procedure Code 2010 (“CPC”) to allow the courts 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. This allows 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. The underlying intent is to preserve the value of seized or restrained properties, at reasonable costs. Examples of assets which may be eligible to be sold include vessels and vehicles.

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. A person who objects to the sale can raise their objection for the court’s consideration.

The court must be satisfied that the costs of the sale are or are likely to be reasonable before ordering the sale of the 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.

  • Dealing with properties where the suspect has absconded: The Bill will amend the CPC such the court must not dispose of 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. 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. The amendments concern the procedure for the disposal of seized property, and do not affect the existing thresholds for the seizure of properties under the CPC.

The amendments impose the requirement that an absconded person who is reasonably suspected of having committed an arrestable offence under Singapore’s laws or serious offence under the CDSA must personally present himself or herself before a law enforcement officer to assist in the investigations into the relevant offence, if the absconded person wants to make a claim on seized properties in respect of the said offence.

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 party has not committed any crimes. That party cannot prove his or her entitlement to the property simply because it was a gift from the absconded person. This also applies to donations.

Reference materials

The following materials can be found on the Parliament website www.parliament.gov.sg and the MHA website www.mha.gov.sg: