Reported by Shawkat Hossain

Singapore is dubbed ‘Asia’s business district’. It has also earned the dubious epithet of a ‘tax haven’. Singapore tops the choice list of many money launderers to stash their illegal money. That Singapore, for many of these launderers, is behaving a bit strangely. Many feel Singapore is no more a place to ensconce with laundered money. That’s why those who siphoned off money from their own countries now want to slip out of Singapore. Their new destinations are places like Dubai or Cyprus, where they can keep their money safe. The question is why are the money launderers leaving Singapore? 

Why is Singapore being strict?

Singapore woke up to reality mainly due to the 1Malaysia Development Berhad scandal. The state fund was created mainly for Malaysia’s economic development. A total of USD 4.5 billion was embezzled from the fund. The fund was embezzled using the banking system of six countries. Singapore was one of the countries. This led to a loss of reputation as well as internal pressure for Singapore.

In bid to do something to steer clear of that bad reputation, the country formed The Financial Action Task Force in 2016 and passed the Anti-Money Laundering and Terrorism Financing Act in 2018. As these laws failed in damage control, the country took up stricter laws. Singapore passed ‘New Anti Money Laundering and Terrorism Financing’ bill in 2023, with effect from 28 June. This left the money launderers of different countries harbored in Singapore—who bought properties, luxury hotels, cars –cringing.

What is in the new law?

The incident started back in 2016. Two real estate agents were fined for not providing information on suspicious transactions. One is related to the sale of a bungalow in Sentosa Cove at a price tag of 23.8 Singaporean dollars and the other is about the sale of a new condominium unit. These properties were sold to two individuals who later were found guilty. The new law, enacted after much scrutiny, is intended to stop recurrence of such incidents.

Real estate developers have been following some new rules since 28 June. As per the new rules, for now on, housing companies must carry out customer due diligence (CDD), inform the authorities concerned about suspicious transactions and keep transaction records for five years. That means details of the buyer, his/her country of origin and sources of money must be verified. Buyers must have a real identity. No properties will be sold to any unknown persons or people who wish to remain anonymous or use a pseudonym.

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