SINGAPORE - Authorities in Singapore have seized or frozen assets worth more than S$2.8 billion (US$2 billion) in a major money laundering investigation, a senior official said on Tuesday, while signalling the government could tighten immigration rules to curb illicit inflows.
The investigation is ongoing and authorities continue to interview Singaporeans and foreigners alike, Josephine Teo, Second Minister for Home Affairs, told Parliament.
The city-state will review how to tighten its immigration verification checks, though “no screening process is foolproof”, said Teo, who also heads the Ministry for Communications and Information.
“Singapore takes money laundering seriously,” she said. “We do not turn a blind eye to any risks, once we become aware of them. This is not the first time that we have taken serious enforcement action against money laundering offences. Nor will it be the last.”
Singapore has long capitalised on its reputation for clean governance and zero tolerance for crime to attract foreign investments and the well-to-do. That has been called into question after the authorities seized assets and arrested 10 foreigners — all originally from China — for alleged forgery and laundering proceeds from scams and illegal online gambling.
The country is working with international counterparts and local regulators will take action against those who have fallen short, Ms Teo said.
The case, which erupted into the public view in mid-August, is shining a light on fund flows from abroad and whether the $2-trillion financial sector driving the city-state’s economy has done enough to block dubious transactions.
Singapore has seen an influx of affluent Asians, including those from China, seeking safe investments amid crackdowns in the mainland and pandemic restrictions.
Lawmakers had previously submitted dozens of questions to be answered by the government, including the need to tighten existing money-laundering rules, further steps to prevent cross-border crimes and immigration checks.
“Most people are not illegal money launderers or criminals,” Teo said. “If the rules are too tight, then it is the vast majority of innocent applicants who will be unnecessarily penalised.”
At least 240 individuals were convicted of money laundering offences from 2020 to 2022 with the police seizing more than S$1.2 billion worth of assets, she said.
Cross-border wealth inflows into Singapore totalled US$1.5 trillion last year, according to an estimate by Boston Consulting Group. This makes the country the world’s third largest offshore financial hub after Switzerland and Hong Kong where the wealthy park their assets.
The authorities said last month that additional operations resulted in the seizure of bank accounts with a value of more than S$1.13 billion and cryptocurrencies worth S$38 million. The police have also issued orders to prevent the sale of more than 110 properties and 62 vehicles totalling over S$1.24 billion.
Banks in the wealthy city-state are increasing scrutiny of some Chinese-born clients with other citizenships.
Some lenders have been reviewing new account openings and transactions with clients of Chinese origin carrying investment-linked passports, Bloomberg reported.
At least one international bank is closing some accounts of clients with citizenship from countries including Cambodia, Cyprus, Turkey and Vanuatu.
Authorities are also investigating the role that some so-called family offices might have played in laundering activity.
Authorities found that one or more of the accused in the case involving more than S$2.8 billion ($2 billion) of assets, may have been linked to single family offices that were awarded tax incentives, Minister of State Alvin Tan said.
Singapore has seen an influx of family offices — set up by ultra-rich to manage their affairs and investments. The number of single family offices there rose to 1,100 by the end of last year, compared with just 400 at the end of 2020.