Singapore: Money Laundering — Legal Implications for Financial Institutions

Pages184-189
Publication Date01 Feb 1997
DOIhttps://doi.org/10.1108/eb027137
AuthorTan Sin Liang
SubjectAccounting & finance
Singapore
Singapore: Money Laundering Legal
Implications for Financial Institutions
Tan Sin Liang
INTRODUCTION
In October 1995, the Singapore Commercial
Affairs Department (CAD) with the assistance of
the Royal Canadian Mounted Police and the US
Drug Enforcement Administration, uncovered a
multi-million dollar global money-laundering syn-
dicate run by a North American drug syndicate
using a Singapore bank.1 The CAD recovered
S$5.4m stashed in the bank. It was Singapore's
largest money-laundering case. The joint investiga-
tors found that the drug syndicate used couriers to
smuggle money physically into Singapore between
1989 and 1992. The cash was laundered through
money-changers in Singapore and in the Middle
East. Some of the illegal cash found its way into a
secret Asian Currency Unit (ACU) account in the
Singapore bank. The ACU account was in the
name of an account holder who was arrested in
Canada for drug trafficking. He surrendered the
balance of S$5.4m found in the ACU account to
the CAD after a Confiscation Order was issued by
the Subordinate Court. The Canadian authorities
believe this amount is 'just the tip of the iceberg'.2
Since money laundering is not an extraditable
offence, the account holder was not prosecuted in
Singapore. The bank used by the syndicate was
also not prosecuted for money laundering.
The Financial Action Task Force (FATF) has
viewed Singapore as a major target for money
launderers because of its sophisticated financial
centre, efficient communication network and
absence of exchange controls.3
DTA GUIDELINES ON MONEY
LAUNDERING
Singapore criminalised money-laundering activities
in 1992 when it enacted the Drug Trafficking
(Confiscation of Benefits) Act (Cap. 84A) (DTA).
Although the DTA was passed in 1992, it only
came into operation on 30th November, 1993. So
far, Singapore is the only country in the Asean to
have passed a specific money-laundering law.4Alth-
ough the DTA came into effect on 30th Novem-
ber, 1993 it, however, operates retrospectively.5
Hence, all money-laundering offences committed
before 30th November, 1993 are nevertheless
caught under the DTA. The DTA also has extra-
territorial effect.6 A money-laundering offence
committed by a Singaporean or Singapore entity
overseas will therefore be caught under the DTA.
Besides the DTA, the Monetary Authority of
Singapore (MAS), the de facto central Bank of
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