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Legal analysis by Allen & Gledhill on Singapore’s recent bills related to anti-money laundering and foreign environmental crimes.
SINGAPORE has introduced a Bill to give more teeth to law enforcement agencies to prosecute money laundering suspects and to deal with properties linked to suspected criminal activities. Tabled in Parliament on Tuesday (Jul 2), the proposed changes pave the way for certain seized assets to be sold, to reduce the cost of maintaining them.
The Bill also proposes to allow probes to extend to environmental crimes such as illegal mining, and to facilitate the prosecution of money mules who launder funds on behalf of someone.
On Wednesday (Jun 26), Prime Minister and Minister for Finance Lawrence Wong announced Singapore’s national asset recovery strategy, as part of the country’s continued efforts to enhance its anti-money laundering and counter-terrorism financing regime.
Singapore will reinforce laws governing its anti-money laundering regime, to allow for certain seized assets to be sold before court cases conclude, and for probes to extend to environmental crimes such as illegal wildlife trading.
A short summary of Singapore’s environmental crimes money laundering risk assessment by legal firm Allen & Glendhill.
The Monetary Authority of Singapore (MAS) has warned the city-state is vulnerable to criminals laundering the proceeds of environmental crime and is urging local banks to conduct greater scrutiny of trade transactions. Last week, MAS published the findings of a government-wide review into Singapore’s financial sector and its potential exposure to crimes such as wildlife trade, illegal logging and the illicit shipping of hazardous waste.
Later this year, Singapore is preparing to expand the scope of its existing Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, which targets environmental crime laundering. The expansion would allow Singapore’s authorities to investigate offences that first take place overseas but have “no domestic equivalent”, such as illegal logging or waste trafficking.
Singapore’s casino industry has been named as one of four sectors deemed at medium-high risk of being exploited for environmental crime money laundering, although no specific cases have been identified, according to a new report issued by multiple Singapore agencies.
The “Environmental Crimes Money Laundering National Risk Assessment” was jointly published by the Ministry of Home Affairs, the Monetary Authority of Singapore and the Ministry of Finance on Wednesday, providing a detailed overview of the nation’s environmental crime money laundering risk environment and identifying key threats, vulnerabilities, controls and areas of enhancements.
The report, which claims environmental crimes generate between US$110 billion and US$281 billion in criminal gains globally every year, highlights Singapore’s status as an international financial centre, and an international trading and transport hub with a highly-externally-oriented economy, as the reason it is utilized by criminal groups as a transit country for environmental crimes, such as those associated with illegal wildlife trafficking or illegal logging and waste trafficking.
Today, Singapore published an Environmental Crimes Money Laundering (ML) National Risk Assessment (NRA) which identifies the key threats and vulnerabilities in environmental crimes ML that Singapore is exposed to, and outlines mitigation measures which government agencies, financial institutions (“FIs”) and Designated Non-Financial Businesses and Professionals (“DNFBPs”) can develop to address the risks. Env Crimes ML NRA – Final for Publication.pdf (mas.gov.sg)
UNODC’s 2024 World Wildlife Crime Report has a case study on the illegal trade in rosewood, with a focus on Nigeria. Major players in the case study include China, India, Singapore, Mali, Guinea-Bissau, Brazil, Vietnam and Ghana.
According to Global Canopy, US$6.1 trillion in funding was provided to the 350 companies with the greatest risk exposures to tropical deforestation by some 150 financial institutions in 2023.
Through this exposure, land conversion presents numerous supply-chain risks to firms, namely:
- The reputational risks posed by adverse media (exacerbated further if linked to any human-rights abuses in the context of land conversion).
- The legal risks represented by increasing regulatory and legislative pressures on companies and financial institutions to prevent deforestation.
- The physical risks present, given that most bank-financed businesses and commercial services ultimately depend on natural capital and resources directly or through their supply chains. Aggressive consumption of resources reduces their availability in the long term, undermining sustainable development and creating economic instability. Indeed, the World Economic Forum (WEF) has estimated that at least 50 percent of global GDP is reliant on nature and warned that the impacts of climate change would significantly destabilise global trade.
Wilmar International’s No Deforestation, No Peat, No Exploitation policy, announced ten years ago, marked a significant milestone in environmental conservation by prohibiting deforestation, peatland destruction, land-grabbing, and labor abuses in their global supply chain, impacting thousands of palm oil companies.
The policy, a result of global campaigning and intense negotiations, contributed to a dramatic reduction in deforestation for palm oil by over 90%, influencing other industries and contributing to the lowest deforestation levels in Indonesia, as well as progress in Malaysia, Papua New Guinea, and tropical Africa, argues Glenn Hurowitz, the Founder and CEO of Mighty Earth, who led the negotiation with Wilmar.
Hurowitz says this “success story” highlights the importance of private sector involvement, effective campaigning, diligent implementation, the necessity of continuous effort, and the insufficiency of data alone in driving change.
But an investigation by nonprofit newsroom The Gecko Project reveals how First Resources’ majority shareholders, the billionaire Fangiono family, have breached their company’s pledge of “sustainable” production by secretly controlling companies that environmental analysts found had cleared large areas of rainforest in Indonesia.
The investigation in collaboration with the International Consortium of Investigative Journalists also spotlights a loophole in the Singapore Exchange’s reporting rules that allows listed companies to publish so-called sustainability reports, without requiring that an independent firm audits the company’s green claims.
The report by the Financial Accountability and Corporate Transparency (FACT) Coalition, published on Oct. 26, said that “critical gaps” in the U.S. anti-money laundering system are vulnerable to exploitation by criminal groups, including those behind the destruction of the Amazon, the world’s largest tropical rainforest.
FACT’s analysis focuses on forestry crimes and illegal mining in Peru and Colombia. The report also summarizes how U.S. importers sidestep the law by not trading directly with the blacklisted Myanmar Timber Enterprise (MTE) but instead with non-sanctioned Myanmar exporters and middlemen based in Singapore, Thailand and other third countries.
Key Resources
Methodology
Data Tools
Click here to access the Global Illegal Logging and Associated Trade (ILAT) Risk assessment tool and to download the Forest Trends User Guide describing the functionality of the ILAT Risk Data Tool.
Click here to access the Cattle Data Tool.
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