His Excellency Mr Takaaki Kojima, Ambassador from the Embassy of Japan,
Mr Eric Tan, Director CNB,
Ladies and Gentlemen,
Scope of the problem
In today's globalized economy, organized crime groups generate huge sums of money through drug trafficking, arms smuggling, financial crime and other forms of organized crime. "Dirty money", however, is of little use to organized crime syndicates because it arouses the suspicions of law enforcement agencies and leaves a trail of incriminating evidence. Criminals who wish to benefit from the proceeds of large-scale crime have to disguise their illegal profits without compromising themselves. This process is known as money laundering.
Impact of money laundering
2 The infiltration and sometimes saturation of dirty money into legitimate financial sectors and national economies can threaten economic and political stability. For instance, it could cause volatility in exchange and interest rates due to unanticipated cross border transfers of funds; the threat of monetary instability due to unsound asset structures; effects on tax collection and public expenditure allocation due to misreporting of income; misallocation of resources due to distortions in asset and commodity prices; and contamination effects on legal transactions due to the perceived possibility of being associated with crime.
International Plan of Action
3 An important initiative towards combating money laundering came in 1989 when the Financial Action Task Force (FATF) was established by the Group of 7 major industrialized countries and the President of the Commission of the European Communities. This is an inter-governmental body whose purpose is the development and promotion of policies, both at national and international levels, to combat money laundering and terrorist financing.
4 Through this course, we aim to contribute to the objectives of the Financial Action Task Force in combating money laundering. We are all aware that drug syndicates launder money in order to evade detection. Drug syndicates are profit-driven and engage in this nefarious activity for the sole purpose of making money. Therefore, one way to deal a significant blow to drug syndicates is to deprive them of their income sources by making it very difficult for them to launder their ill-gotten gains.
5 In the common fight against the drug scourge, it is important for drug enforcement agencies to share knowledge and best practices, and their strategies in drug control. It is also important that they understand each other's work processes and culture. The ASEAN Senior Officials on Drug Matters, or ASOD, has been an important platform for drug enforcement agencies in ASEAN to meet regularly. These occasions all help to strengthen ties and working relationships, which will enhance ASEAN's effectiveness in the drug fight.
6 Singapore has been involved in a number of ASOD projects in the past, either as host or project coordinator. I am pleased that Singapore is now the organiser of another ASOD project with the sponsorship of the Government of Japan under the auspices of the Japan-ASEAN exchange project.
7 During this course, we will share with you the efforts of both Singapore and Hong Kong in anti-drug money laundering. Through presentations, discussions and visits, we hope to share with you as much as possible the processes involved in combating money laundering. I hope that all participants will also share their experiences, so that all of us can gain valuable insights to some of the enforcement strategies and best practices adopted by your respective countries.
8 As you take this opportunity to also network and forge new friendships, I hope that you would also gain a better understanding of the vital importance for countries to co-operate closely to solve the drug problem.
9 On this note, I would like to wish all the participants an enjoyable and fruitful stay in Singapore.