What is Money Laundering?
Money laundering involves hiding the origins of money gained through illegal means, allowing “dirty” money to enter the financial system as if it were legitimate. This can be done through businesses, luxury goods, or real estate. Although often associated with organised crime, ordinary people may unknowingly become involved, for instance, by sharing their bank details or Singpass credentials with scammers.
Key Legislation Against Money Laundering in Singapore
1. Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA)
The CDSA is the main law targeting money laundering. It aims to seize profits from crimes such as drug trafficking, extortion, and illegal gambling. Offences include:
- Helping others retain criminal proceeds
Knowing or suspecting that money comes from illegal activity and assisting in keeping, investing, or using it.
Penalty: Up to $500,000 fine or 10 years’ jail (individuals); up to $1 million fine for companies. - Concealing or moving criminal funds
Hiding, converting, or transferring illegal funds—even abroad.
Penalty: Same as above. - Helping someone hide or transfer illegal funds
Knowingly helping to “clean” someone else’s criminal money, e.g., a lawyer helping a client buy property with illicit funds.
Penalty: Same as above. - Acquiring or using criminal funds
Buying or using property knowing it came from crime.
Penalty: Same as above. - Rash and Negligent Money Laundering
- Rash: Ignoring red flags and failing to investigate (e.g., taking suspicious job offers involving bank transfers).
Penalty: Up to $250,000 fine or 5 years’ jail. - Negligent: Failing to notice obvious warning signs (e.g., renting out your bank account for money transfers).
Penalty: Up to $150,000 fine or 3 years’ jail.
- Rash: Ignoring red flags and failing to investigate (e.g., taking suspicious job offers involving bank transfers).
- Failing to verify suspicious financial activity (Section 55A)
Examples include allowing others to use your bank account or handling money disproportionate to your income without checking its source.
Penalty: Up to $50,000 fine or 3 years’ jail (individuals); higher fines for entities.
Other Relevant Laws
2. Computer Misuse Act (CMA)
- Disclosing your own Singpass for gain or without verification
Penalty: Up to $10,000 fine or 3 years’ jail. - Using or distributing others’ Singpass details for crime
Penalty: Up to $10,000 fine or 3 years’ jail (1st offence); higher for repeat offenders.
3. Penal Code
- Receiving stolen property (Section 411)
Keeping items known or suspected to be stolen.
Penalty: Up to 5 years’ jail or fine, or both. - Helping conceal or dispose of stolen property (Section 414)
Assisting in hiding or getting rid of stolen items knowingly.
Penalty: Same as above.
Other Measures and Regulations
- Terrorism (Suppression of Financing) Act: Targets terrorism-related financial crimes.
- Monetary Authority of Singapore (MAS): Issues AML guidelines for financial institutions.
- Legal Profession Rules: Regulate how law firms handle AML compliance.
The Law Society conducts annual checks on firms to ensure compliance.
Conclusion
Money laundering can happen in both complex and simple forms. While Singapore’s legal framework is comprehensive, individuals must remain vigilant to avoid being exploited or unintentionally aiding criminal activities.