Anti-Money Laundering Laws and You

While money laundering seems like criminal acts committed only by sophisticated criminals, there are man on the street who become conduits for money laundering activities in Singapore unwittingly. This article sets out the laws on money laundering in Singapore and shows how it can affect the common man on the street.

What is money laundering?

Money laundering (ML) is defined as a process to make ‘dirty’ money (proceeds from criminal activities) look ‘clean’ (or legitimate) by masking the benefits derived from criminal conduct so that it appears to have originated from a legitimate source.

Criminal offence under the Corruption, Drug Trafficking and Other Serious Crimes Act (“CDSA”)

The key legislation that criminalises money laundering is the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (“CDSA”) which was passed to expand the scope of money laundering offences to include non-drug related activities. According to the CDSA, the laundering of proceeds from 10 types of drug dealing offences in the First Schedule and serious crimes specified in the Second Schedule, (collectively, “criminal conduct”) constitutes a money laundering offence.

There are mainly four types of money laundering offences covered by the CDSA:

(1) Criminals laundering their own money

The first money laundering offence is committed when a person:

(a) conceals or disguises any property which (in whole or in part, directly or indirectly) represents his benefits from drug dealing or from criminal conduct; or

(b) converts or transfers that property; or

(c) removes it from Singapore.

The relevant provisions are sections 46(1) and 47(1) of the CDSA, for benefits from drug dealing and criminal conducts respectively. They apply to criminals who are laundering their own money from drug dealing and other criminal conducts.

(2) Benefitting from someone else’s money laundering

The second money laundering offence is committed when a person who:

(a) knowing or having reasonable grounds to believe that;

(b) any property (in whole or in part, directly or indirectly) represents another person’s benefits from drug dealing or criminal conduct; and

(c) acquires or has possession of or uses that property.

The relevant provisions are sections 46(3) and 47(3) of the CDSA for benefits from drug dealing and criminal conducts respectively. The provisions apply to a third party, who is not a drug dealer or did not commit a criminal conduct himself or herself.

An example would be, if a person knowingly bought gold (worth $150,000) for $50,000 from a drug trafficker while suspecting that the gold was part of the proceeds from his drug trafficking activities, he may be charged for this second offence.

(3) Abetment of money laundering

The third money laundering offence is committed when a person who:

(a) knowing or having reasonable grounds to believe that;

(b) any property (in whole or in part, directly or indirectly) represents, another person’s benefits from drug dealing and criminal conduct;

(c) conceals or disguises that property; or

(d) converts or transfers that property or removes it from Singapore.

The relevant provisions are sections 46(2) and 47(2) of the CDSA. The offence is essentially an offence of abetment (knowingly assisting’), where the third party assists a drug dealer or a person who committed a criminal conduct to make the ‘dirty’ money ‘clean’ again. An example would be a lawyer who knowingly assists a client by using ‘dirty’ money to purchase property on behalf of the client.

(4) Entering into an arrangement to benefit from someone else’s money laundering

The fourth money laundering offence is when a person who enters into or is otherwise concerned in an arrangement, knowing or having reasonable grounds to believe that, by the arrangement —

(a) the retention or control by or on behalf of another (referred to in this section as that other person) of that other person’s benefits of drug dealing or criminal conduct is facilitated (whether by concealment, removal from jurisdiction, transfer to nominees or otherwise); or

(b) that other person’s benefits from drug dealing or criminal conduct —

(i) are used to secure funds that are placed at that other person’s disposal (directly or indirectly); or

(ii) are used for that other person’s benefit to acquire property by way of investment or otherwise,

and knowing or having reasonable grounds to believe that that other person is a person who engages in or has engaged in drug dealing or criminal conduct or has benefited from such shall be guilty of an offence.

The relevant provisions are sections 43(1) and 44(1) of the CDSA. This offence is also an offence of abetment. This offence criminalises a person assisting a drug trafficker or a serious crime offender to (a) retain or control his benefits from these criminal activities or (b) secure such ‘dirty’ funds or (c) invest such funds.

However, the prosecution has to prove that there is an ‘arrangement’ (ie some form of agreement) between the money launderer and the criminal (evidence of such arrangement would typically be some payment of commission) before the offence could be made out.

(5) Cross border movements of cash

It is worth noting that the CDSA makes it an offence for anyone moving or attempting to move cash into or out of Singapore, with the value exceeding the prescribed amount or its equivalent, without first giving a report to the Immigration Authority. Currently, the prescribed amount is set at $20,000 and a person who fails to declare this amount to the authorities is liable for prosecution.

A person charged under this offence has a good defence if he or she can prove that (a) he or she did not know and (b) had no reasonable ground to believe that the whatever is used to transport the cash contained cash.

Criminal offence under the Penal Code

(1) Dishonestly receiving stolen property

Section 411 of the Penal Code punishes any person who

(a) knows or having reason to believe the property to be stolen property; and

(b) dishonestly receives or retains stolen property.

The provision may also be used in money laundering cases. In this case, the provision is not limited to any drug dealing offences or serious offences under the relevant schedule in the CDSA. It may be applied in circumstances such as, when a person knew that his friend stole money from the employer (eg. a bank) and kept the stolen money for his friend.

(2) Disposal and concealment of stolen property

Section 414 of the Penal Code criminalises the act of voluntarily assisting in the concealing or disposing of stolen property as long as the person knows or has a reason to believe the property to be stolen.

Consequences for a money launderer

The penalty for the commission of the four money laundering offences under section 43, 44, 46 and 47 of the CDSA for an individual is a fine not exceeding $500,000 or a term of imprisonment not exceeding ten years, or both.

The penalty for the failure to report cross border movements of cash exceeding prescribed amount under section 48C of the CDSA for an individual is a fine not exceeding $50,000 or a term of imprisonment not exceeding three years, or both.

Anyone convicted of sections 411 and 414 of the Penal Code would be punished with a fine or a term of imprisonment which may extend to five years, or both.

Case Study: Public Prosecutor v Razali Bin Mohamed Idris [2017] SGDC 22

To illustrate how the common man on the street can run afoul of money laundering laws, the case of Public Prosecutor v Razali Bin Mohamed Idris [2017] SGDC 22 is instructive on this matter. In this case, the accused was convicted of one charge of dishonestly receiving stolen property (section 411 of the Penal Code) and three charges of transferring the stolen property (section 47(1)(b) of the CDSA) out from Singapore’s jurisdiction.

The accused was a 56-year-old man with O’ levels education. He became acquainted with one “Rose” through the Internet. In the course of their communication, he agreed to assist “Rose” to transfer monies amounting to S$171,091.25 overseas on three separate occasions.

The court found that the accused had reasons to believe that the money he was requested to transfer overseas were criminal proceeds as the accused was not as “naïve and gullible” as he claimed and the amount of S$171,091.25 was a huge sum of money that ought to have arose his suspicion. Furthermore, the accused had no reason to trust “Rose” as he had never met her before and there was no reason for him to transfer the money from Singapore back to Malaysia where “Rose” claimed that she resided in. Consequently, these “red flags” were found to be sufficient reasons that the source of the monies he received was illegal in nature and that the accused knew what he was doing was illegal.

This case illustrates that money laundering offences are not necessarily committed by the well-educated or white-collared workers. Rather, a common man on the street could also commit such offences. A cautionary tale to this is to exercise due diligence when handling large sums of money from unknown sources or simply to “help” a friend.

Some other acts that may constitute a breach of money laundering laws includes:

• Traveling in or out of Singapore with S$20,000 or more without declaring it to the authorities;
• Engaging in part-time jobs found on job portals that involves transferring funds from one account to another or to remit money overseas;
• Helping “friends” to sell off properties that could have been stolen; and
• Being requested by an online “friend” to receive money or to transfer money overseas.

These acts may well be criminal offences and it pays to be aware as you would not want to run afoul of the law.