A Guide to Singapore’s Anti-Money Laundering Laws

You may think of money laundering as a complex criminal operation undertaken by sophisticated syndicates with deliberate planning and premeditation. While this is undoubtedly true in most cases, money laundering can take many forms and the common man on the street may also unknowingly become a conduit for money laundering activities.

This article will explain the process of money laundering, focusing on the laws that make money laundering illegal and covering the types of offences that constitute money laundering in Singapore.

What is Money Laundering? 

Money laundering refers to the process of disguising or concealing the true source of funds which have been derived from illegal or criminal activities. Hence, money laundering allows “dirty funds” to enter the financial system without being detected by the authorities. Money laundering is a criminal offence in Singapore.

Money may be laundered by using a legitimate business as a front, making “dirty” money appear “clean”. This is done by injecting the proceeds of criminal activity into a seemingly legitimate business entity (such as a restaurant), which “cleans” the money and creates the illusion that the money is simply part of the restaurant’s profits.

In what is known as Singapore’s largest-scale money laundering case to date, a criminal syndicate channelled the proceeds of illegal gambling through luxury properties, jewellery, liquor, watches, vehicles and electronic devices in order to launder the money.

As mentioned earlier, a layperson may also unwittingly become involved in a money laundering scheme. For instance, enticed by the promise of earning quick cash, one may disclose their Singpass or bank account details to an unknown person (who could be pretending to be an acquaintance or even a potential employer in order to gain the layperson’s trust), which are then used by a criminal organisation to launder the proceeds of crime.

What are the Laws/Legislation That Criminalise Money Laundering? 

The main legislation governing the offence of money laundering in Singapore is the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA).

The purpose of the CDSA is to provide for the confiscation of proceeds and benefits derived from illegal activities such as money laundering, drug trafficking and other crimes. The CDSA covers 14 types of drug dealing offences as specified in the First Schedule of the Act and a wide range of other serious offences that are stipulated in the Second Schedule. Among others, such offences include human trafficking, unlawful remote gambling and extortion.

Apart from money laundering offences under the CDSA, this article will also discuss money laundering offences under other legislations, specifically the Computer Misuse Act and the Penal Code.

What are the Types of Money Laundering Offences That Fall Under the CDSA?

The CDSA covers several types of money laundering offences, including:

Assisting another to retain the benefits of drug dealing/criminal conduct

Under sections 50(1) and 51(1) of the CDSA, where person A is involved in an arrangement which he/she knows or has reasonable grounds to believe:

• Facilitates the retention/control of person B’s benefits of drug dealing/from criminal conduct; or
• Where person B’s benefits of drug dealing/from criminal conduct are used to secure funds placed at their disposal or are used to acquire property via investment or otherwise,

and person A knows/has reasonable grounds to believe that person B’s benefits have been acquired via drug dealing or criminal conduct, then person A shall be guilty of an offence.

This happens when a third party assists a drug dealer or someone involved in criminal conduct to retain/control the proceeds of a crime, secure such “dirty” funds or invest such funds.

The penalties for such an offence are as follows:

• If the offender is an individual, he/she shall be liable on conviction to a fine of up to $500,000 or imprisonment for a term of up to 10 years, or both.
• If the offender is not an individual (i.e. an entity), it shall be liable on conviction to a fine of up to $1 million or twice the value of the benefits of drug dealing/ criminal conduct in respect of which the offence was committed, whichever is higher.

Concealing, disguising converting or transferring the benefits of drug dealing/criminal conduct 

According to sections 53(1) and 54(1) of the CDSA, a person who:

• Conceals or disguises any property which represents the benefits of drug dealing or criminal conduct;
• Converts or transfers that property or removes it from the jurisdiction; or
• Acquires, possesses or uses that property,

shall be guilty of an offence.

These provisions apply to criminals attempting to launder their own money made from drug dealing or criminal conduct, perhaps by funnelling it through shell companies or other business fronts as explained above.

The penalties for such an offence are as follows:

• If the offender is an individual, he/she shall be liable on conviction to a fine of up to $500,000 or imprisonment for a term of up to 10 years, or both.
• If the offender is not an individual, (i.e. an entity), it shall be liable on conviction to a fine of up to $1 million or twice the value of the benefits of drug dealing/ criminal conduct in respect of which the offence was committed, whichever is higher.

Assisting another in concealing or converting the benefits of drug dealing/criminal conduct 

Under sections 53(2) and 54(2) of the CDSA, where person A knows or has reasonable grounds to believe that any property represents person B’s benefits of drug dealing/ criminal conduct and person A:

• Conceals or disguises that property; or
• Converts or transfers that property or removes it from the jurisdiction,

person A shall be guilty of an offence.

This occurs when a third party assists a drug dealer or criminal by “cleaning” the “dirty” money, thereby becoming involved in money laundering. An example of this would be a conveyancing lawyer who, despite knowing that a client’s money has been derived from criminal activities, nonetheless assists him/her by using the “dirty” funds to purchase property on his/her behalf.

The penalties for such an offence are as follows:

• If the offender is an individual, he/she shall be liable on conviction to a fine of up to $500,000 or imprisonment for a term of up to 10 years, or both.
• If the offender is not an individual (i.e. an entity), it shall be liable on conviction to a fine of up to $1 million or twice the value of the benefits of drug dealing/ criminal conduct in respect of which the offence was committed, whichever is higher.

Acquiring, possessing or using the benefits of drug dealing/criminal conduct 

According to sections 53(3) and 54(3) of the CDSA, where person A knowingly or having reasonable grounds to believe that any property represents person B’s benefits of drug dealing/ criminal conduct, acquires that property or has possession of or uses such property, person A shall be guilty of an offence.

This applies to a third party who is not a drug dealer or has been involved in criminal conduct but nonetheless acquires property/ proceeds derived from criminal activities. For example, if  person A knowingly bought gold (worth $150,000) for $50,000 from person B (a drug trafficker), while suspecting that the gold was part of the proceeds from person B’s drug trafficking activities, person A would be guilty of an offence under these provisions.

The penalties for such an offence are as follows:

• If the offender is an individual, he/she shall be liable on conviction to a fine of up to $500,000 or imprisonment for a term of up to 10 years, or both.
• If the offender is not an individual (i.e. an entity), it shall be liable on conviction to a fine of up to $1 million or twice the value of the benefits of drug dealing/ criminal conduct in respect of which the offence was committed, whichever is higher.

Rash and negligent money laundering

Rash money laundering occurs when a person carries out a transaction despite having suspicions that he/she could be handling the proceeds of crime, and he/she does not inquire further to address those suspicions.

An example of rash money laundering is as follows: Person A takes up a job offer to be an “accounts manager”. He is told that all he has to do is receive money using his personal bank account and transfer sums amounting to more than S$100,000 to other bank accounts on a weekly basis. He is offered $2,000 a month in exchange for doing so. Person A suspects that the funds could be proceeds of crime, but does not make further inquiries into the source of the funds, the legitimacy of his employer or the purpose of the transfers. He chooses to carry out the transactions despite his suspicions, and the money is eventually discovered to be the proceeds of a crime derived from scamming victims.

The offence of rash money laundering attracts a fine of up to $250,000, imprisonment of up to 5 years, or both.

Negligent money laundering occurs when a person carries out a transaction despite the presence of obvious red flags or suspicious indicators that would be noticeable by any ordinary, reasonable person.

An example of negligent money laundering is as follows: Person B responds to an online advertisement calling for people to “rent out” their bank accounts and provides his online banking details to an unknown person for $800. It was eventually found that B’s bank account was used to receive approximately $20,000 from a victim of a love scam. Even though B claims that he genuinely did not suspect anything fishy, such an arrangement would have raised alarm bells to an ordinary, reasonable person and therefore B would be guilty of negligent money laundering.

The offence of negligent money laundering attracts a fine of up to $150,000, imprisonment of up to 3 years, or both.

Assisting another to retain benefits from criminal conduct in certain circumstances

Under section 55A of the CDSA, a person could be found guilty of assisting another to retain the benefits of criminal conduct in the following circumstances:

• The value of the criminal proceeds he dealt with is disproportionate to his known sources of income; or
• He allowed another person to access, operate or control his payment account and failed to take reasonable steps to ascertain the purpose of this arrangement; or
• He received or transferred money using his payment account and failed to take reasonable steps to ascertain the source or destination of the money; or
• He received money from or transferred money to another person and failed to take reasonable steps to ascertain that person’s identity and physical location.

An example of this offence is where Person C agrees to use his personal bank account to receive money from a company’s customers and transfer the money to the company’s bank account. He is paid $100 a day for the use of his personal bank account. C does not question why his personal account is required to receive and transfer money, nor does he take reasonable steps to find out the source and destination of the funds. C is guilty of an offence under section 55A of the CDSA.

The penalty for the offence of assisting another to retain benefits from criminal conduct in the above circumstances is a maximum fine of up to $50,000, imprisonment of up to 3 years, or both.

If the offender is not an individual (i.e. an entity), it shall be liable on conviction to a fine of up to $1 million or twice the value of the benefits of drug dealing/ criminal conduct in respect of which the offence was committed, whichever is higher.

What are the Money Laundering Offences That Fall Under the Computer Misuse Act (CMA)? 

Disclosing a user’s own Singpass credentials to facilitate an offence

There have been numerous instances of people disclosing their Singpass credentials to unknown individuals, who then use the information to open bank accounts that are used to launder the proceeds of crime.

According to section 8A of the CMA, a person who discloses their Singpass credentials to facilitate criminal activities in the following circumstances is guilty of an offence:

• The disclosure was carried out for any form of gain (whether or not the gain is realised, a wrongful gain or the gain is to themselves or another person);
• The disclosure was carried out with the knowledge it is likely to cause wrongful loss to any person; or
• The disclosure was carried out without reasonable steps being taken to ascertain the identity and physical location of the person to whom the credentials were disclosed.

For example, a person commits an offence under this section if they sell their Singpass login credentials for financial gain while suspecting that their credentials would be used to facilitate criminal activities.

The penalty for disclosing an individual’s own Singpass credentials attracts a maximum fine of up to $10,000, imprisonment of up to 3 years, or both.

Obtaining or supplying another person’s Singpass credentials to facilitate an offence

Under Section 8B of the CMA, a person who obtains, retains, supplies, offers to supply, transmits or makes available another individual’s Singpass credentials to facilitate criminal activities is guilty of an offence.

People who purchase Singpass credentials for the purpose of facilitating crime and syndicates who trade Singpass credentials would be guilty of an offence under this section.

The penalty for such a first offence attracts a maximum fine of up to $10,000, imprisonment of up to 3 years, or both. For a second or subsequent offence, the maximum penalty is a fine of up to $20,000, imprisonment of up to 5 years, or both.

What are the Money Laundering Offences That Fall Under the Penal Code? 

Apart from the CDSA and the CMA, money laundering offences can be found in the Penal Code as well.

Receiving stolen property

According to section 411 of the Penal Code, whoever receives or retains any property despite knowing or having reason to believe that the property was stolen, shall be guilty of an offence.

Offences under this section are not limited to drug dealing offences or serious offences under the Second Schedule of the CDSA. The provision may be applied in a situation where person A knew that his friend, person B, stole money from B’s employer (e.g. a bank) and A kept the stolen money for B.

In 2023, an 18-year-old teenager was arrested for his suspected involvement in dishonestly retaining stolen property under section 411 of the Penal Code. Among other items, he was found possessing bank ATM cards and cash amounting to more than $34,000. He was unable to satisfactorily explain why he possessed such items. Upon investigation, the police discovered that criminal proceeds derived from scam cases were deposited into bank accounts linked to some of the recovered ATM cards and the teenager was suspected of having used the ATM cards to make transactions linked to criminal activities on behalf of others.

The penalty for an offence under section 411 of the Penal Code is imprisonment for a term which may extend to 5 years, a fine, or both.

Assisting in the concealment or disposal of stolen property

Under section 414 of the Penal Code, whoever voluntarily assists in concealing, disposing of or making away with property despite knowing or having reason to believe that the property was stolen, shall be guilty of an offence. An example of such offence may be when person A agrees to help pawn person B’s gold watch despite knowing that B had purchased the watch using money made from multiple love scams.

The penalty for an offence under section 414 of the Penal Code is imprisonment for a term which may extend to 5 years, a fine, or both.

What are the Other Laws/Regulations Governing Money Laundering in Singapore? 

Beyond the legislation cited above, there are other regulations governing anti-money laundering. For example, the Terrorism (Suppression of Financing) Act prohibits the financing of terrorism while the Monetary Authority of Singapore publishes notices and guidelines for financial institutions to comply with in order to combat money laundering.

In addition, the Legal Profession (Prevention of Money Laundering and Financing of Terrorism) Rules govern anti-money laundering and countering the financing of terrorism in relation to lawyers and law firms.

The Law Society of Singapore is a professional body for the legal profession in Singapore that takes proactive steps in this regard by conducting anti-money laundering inspections into 50 law firms every year. This is to ensure that law practices in Singapore are actively involved in countering money laundering risks that they may be exposed to.

Taken together, all these regulations help to create a robust framework that effectively targets money laundering offences in Singapore.

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To conclude, money laundering can take many forms ranging from simple to complex. Although we do have comprehensive regulations aimed at preventing money laundering (with the CDSA as the primary legislation), it is still important to be careful that you do not inadvertently end up becoming involved in a money laundering scheme.

If you or a loved one have been charged with a money laundering offence or are being investigated for money laundering offences in whatever capacity, you may wish to seek further advice from a criminal lawyer. A criminal lawyer would be able to assess the unique facts and circumstances of your case, determine whether a money-laundering offence is made out, and provide you with guidance on how best to proceed moving forward.

You may refer to our list of highly rated criminal lawyers in Singapore, or kickstart your search using our Find a Lawyer service.