Industry Impact of Singapore’s National Asset Recovery Strategy 2024

This week, combatting financial crime was on the front page of Singapore’s broadsheets as Prime Minister Lawrence Wong addressed the plenary of the Financial Action Task Force on 26 June 2024.

In his address, PM Wong announced the publication of Singapore’s first ever National Asset Recovery Strategy 2024 (NARS 2024). The 33 page NARS sets out Singapore’s approach to combatting money laundering against the rubric of the 4 Ds of combatting money laundering: Detect, Deprive, Deliver and Deter.

Here are some key figures in the report, that informs the conclusions businesses need to draw and follow up action to take: –

  • $651 million: the amount lost by victims of cyber-enabled fraud in 2023 alone, involving 46,563 victims. This was a year-on-year increase of 46.8% from 2022.
  • 24h: the amount of time now taken by banks to transmit banking information to investigators. This was reduced from a previous 10 – 90 days as a result of a public-private partnership called Project POET (Production Orders: Electronic Transmission)
  • 905: the number of incoming Mutual Legal Assistance requests from Singapore’s foreign counterparts pertaining to money laundering offences in 2023
  • 204: the number of outgoing Mutual Legal Assistance requests to Singapore’s foreign counterparts pertaining to money laundering offences in 2023

Some of the insights from the NARS 2024: –

  • Cost and liability: While the increasing levels of public-private partnership for combatting financial crimes increases is an overall net positive, private sector actors will need to assess the cost of compliance and potential liability that may arise as a result of non-compliance
  • Increasing globalisation of white-collar work: As money laundering globalises, the law-enforcement and defence landscape will also internationalise. The clear uptrend in MLA requests from and to international partners of Singapore under the Mutual Assistance in Criminal Matters Act demonstrates the importance of understanding international standards and global frameworks for combatting money laundering.
  • Forensics will be key: familiarity with the tools of forensic analysis is critical, and white collar crime professionals will have to work with experts like accountants and forensic analysts to keep relevant. To illustrate, the NARS highlights Concealed Income Analysis (“CIA”) as a prominent tool of law enforcement in combatting money laundering. CIA involves an assessment of a person’s or business’ income, expenditures, and net worth to determine the presence of unexplained income. The last reported decision citing a CIA report was in 2021, but expect this to feature more prominently in money laundering prosecutions in the future.

What businesses need to do:

  • Conduct a risk analysis of your business exposure to fraud and money laundering risk. Money laundering risks are more prevalent in industry like corporate services providers, and fraud risk is more pronounced in e-commerce and IT, but commercial crime can also be sector-agnostic;
  • Consider if your fraud risk liability adequately covered. Understanding your legal exposure is key to pricing in the cost of liability coverage;
  • Understand industry-specific legislation that intersects with financial criminal liability. Singapore is set to pass a corporate services providers Bill that will tighten industry standards and safeguards against money laundering.

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