Transcript of Lianhe Zaobao’s Interview on the Recent Money Laundering Case With Mr K Shanmugam, Minister for Home Affairs and Minister for Law

Published: 10 September 2023

Lianhe Zaobao (ZB): Understand that the money laundering case is before the court, but would you be able to give an update?

Minister: The amount seized is now closer to $1.8 billion, and it could be even more. This is one of Singapore's largest anti-money laundering operations. More than 400 officers conducted the raids on a single day and 10 persons were arrested. The investigations leading to this, have been going on for many months. There is a lot of interest. You can understand, the amount of money, other assets that have been seized. When it first came out, the amount was about a billion dollars. Now, as I have said, closer to $1.8 billion, so catches the imagination, of course, the pictures of the cars, the houses, and so on. So it is entirely understandable the amount of interest, and we are a major financial services centre.

Matter is before the courts, so as you said, not much I can say, investigations are ongoing. I can tell you that 10 persons, as some people know, have been charged. For money laundering – they get criminal proceeds from illegal gambling, unlicensed money lending, and so on, from overseas; forgery in Singapore – for example, forging documents to substantiate, explain where the money came from. Because when you go to the banks and you are putting money, the banks will ask you, where did the money come from? That's one of the checks that are necessary to make sure that the money is clean. And they are being charged with forging documents to not tell the truth. If they did it, and I emphasise – if – then they would have committed offences in Singapore; and of course, two persons have also been charged - one for resisting arrest, and the other for perverting the course of justice. All of these are charges, they have to be proven in court beyond reasonable doubt. There could be more charges, of course, based on investigations. The key point is that we identified and took action against a sizeable network and seized a very large amount of assets. What message does it send? It sends a clear message that we will act firmly against these kinds of illegal activities in Singapore.

ZB: Because investigations for this case are ongoing, so the amount involved and the people involved, need to be determined. But there are some Chinese foreigners who are very worried that they might be implicated by the investigation work. Could you share your views?

Minister: I can understand there might be some concerns. But you need to look at the facts. We are a major financial centre – Chinese, Southeast Asians, Europeans, Americans have all brought in huge amounts of money into Singapore over many years. When the money is brought in properly, their businesses, it is not illegal funds – we haven't taken action. So you need to look at the facts, understand why action was taken in this case. In this case, the group is suspected to be involved in organised crime overseas, including scams and illegal online gambling, and they are suspected of trying to launder the proceeds of those crimes, those offences in Singapore. So the basic point is this, if you (1) do anything illegal in Singapore, like forge documents or commit crimes, or (2) do illegal things overseas and then try to launder your criminal proceeds here, action will be taken. Action hasn't been taken in respect of a lot of other money. If you, for example, try and launder money through shell companies, buying and selling luxury goods, illegal gambling, and if we find out, of course, action will be taken. But if you have a proper, legitimate business and you bring in legitimate money here and don't break our laws like forging documents – there is nothing to worry about.

ZB: Chinese Foreign Minister Wang Yi was in Singapore for a two-day visit on 10 August this year. 10 individuals were arrested on 15 August. Some speculated that Wang Yi had actually sought Singapore's assistance to crack them down, and China has been helping our law enforcement agency. Possible to share some details on this?

Minister: I can say categorically that that's not true. Any such suggestion would be absurd. There's absolutely no connection between the Foreign Minister's visit and these arrests. First, people who know Singapore will know, we don't yield to that sort of pressure from any country. Just because a country says arrest so and so doesn't mean we go and arrest. It's got to be illegal in Singapore. We need to be satisfied and we need to know that things have happened which are contrary to our laws, then we will take action – regardless of what others say. And second thing people know is that, if you look at these sorts of investigations, anyone who knows about them will know you can't investigate these sorts of things against 10 people, so much assets, money laundering, tracing, in a matter of days or weeks. The investigations have been going on for many, many months. You've got to identify, what is the illegality in Singapore? What's the possible criminality overseas? Who are the people involved? What's the network? How did the money track through to Singapore? What were the transactions? You can do all these in a matter of days? You need thorough investigations. And you know, in Singapore, it's not just a question of Ministry of Home Affairs or Police saying, we arrest you. It has got to stand up in court. It's got to be proven in court. So you need to do your investigations thoroughly. We have been working on this for many, many months. It's got no connection with the Foreign Minister's visit. It's quite a lot of effort, to identify the offences, trace the assets and funds. It takes time. In this case, there were Suspicious Transaction Reports (STRs) that were filed by financial institutions. The Police then investigated, looked into various things based on different pieces of information, the STRs, intelligence, other aspects.

ZB: Of course, Singapore Government will also seek help from other countries to look into the case, right? Including China.

I won't go into details of how we do our investigations, but you can take it that we will try and be thorough and we will try and look for information wherever we can find it, both within Singapore and outside of Singapore. But we didn't start the investigations at the request of some foreign country or party or because of external pressure. We started the investigations because we had reason to believe that these people had committed offences in Singapore.

ZB: Now we talk about the seizure and freezing of assets, it’s $1.8 billion now. Many are interested in the ultimate outcomes of these items, including does the foreign country have the rights to claim them? And also, other plans to deal with the seized items, like the cars – the depreciating value. Any comments?

The seized items are now under Police custody. That's the way Police handle any seizure. If you file any Police report, a matter involving a $10,000 case and there's a fraud, and Police seized some asset, they have a certain SOP, which is set out in the law. They'll keep it in custody, whether it's $1.8 billion or you know, $18,000. The money or assets will have to be kept and dealt with. There's a set procedure. The money and assets seized here will be dealt with in the same way that they're dealt with in other cases. What does that mean? Case will have to be dealt with in court. Once the case is over, the courts will decide how the assets will be dealt with. It depends on who the courts identify as owning the assets. These are issues that will have to be gone into based on whatever findings the courts make. That's on the assumption that persons are found guilty and these assets are traced to criminality. But of course, if they are acquitted, then it's a different story. The assets will be dealt with in the same way they're dealt with in other cases.

ZB: Because the assets, maybe it's from online illegal gambling, so it's not easy to pinpoint who it belongs to and..

Well, that is what the Police and the courts are there for.

ZB: Questions about foreign nationals – once they are convicted and sentenced, you know, will they be sent back, like for this case deported back to China or the countries that they hold their nationalities?

Again, how these people will be dealt with if they are found guilty or not found guilty, would be the same way in which others who are before our courts are dealt with. Whenever a foreign national is convicted and sentenced in Singapore, that person will have to serve the sentence. After completing the sentence – supposing it's a custodial sentence, after serving jail – he or she may be deported out of Singapore to wherever the passport will allow the person to go. You have a valid passport, it allows you to go somewhere, you can go to that place. But of course, if there is an extradition request from a country and assuming that, there is an agreement for extradition, extradition treaty, then we will comply with the treaty or arrangement.

ZB: Now we come to Singapore’s reputation as a global financial hub. Singapore seems to be attractive destination, so called a hotspot for money laundering activities. What’s your take and, is money laundering surging in Singapore?

I would be careful about these sorts of characterisations. We are a leading international financial centre. The third largest, important financial centre in the world after New York and London – that's what the Global Financial Centre's index puts us at. The financial sector is extremely important to us. It is 14% of our GDP, it employs about 200,000 people. And it creates a huge number of good jobs for our people. So we need to be careful how we handle it and what are the key principles.

The financial services sector is also important for growth in other sectors. For example, legal services, industry development, many other sectors. And what does that mean? We have to be very strict, to make sure people don't abuse our financial system, or use Singapore as a haven to launder money. We have to uphold our reputation as a place with trusted, sound regulation, good governance, strong rule of law. And part of being a leading financial hub, at the same time, is that you are open to, and you are able to manage large amounts of flows of money. If you're the third largest financial centre in the world, what does that mean? You're open for business, you're open for money, money flows in and you're able to manage it.

But when you have that kind of open economy, which is necessary, and a well-connected financial infrastructure – imagine if your banks can't talk to other banks, can't receive money, or they've got to wait for a long time before money can be received. You're finished as a financial centre. So they have to be well-connected. We have to be open. But what does that mean? It means that people who do bad things, criminals, will also try and use it, right? It's like a major highway. Some criminals will also try and use the highway, and they will try different methods, quite sophisticated, they'll mix some illegal transactions with many legitimate ones, to make it difficult for you to find, so that it's not always clear cut. And you see this in financial centres all over the world – London, Hong Kong, Australia. I go back to what, Mr Deng Xiaoping once said, you know, different context, he said, “When you open the window for fresh air, you have to expect some flies to blow in” – very wise and practical words.

Do you want to keep your windows shut? Not possible, right? You have to keep your windows open. Our financial centre has to be like a financial centre. You are able to transfer money to Singapore. It must be easy. We can't close the window because if we did that, then legitimate funds will also not be able to come in. And legitimate business, legitimate people doing legitimate business, also can’t be done or becomes very difficult to do. So we have to be sensible. And inevitably, when you are successful, you are a major financial centre, a lot of money comes in, some “flies” will also come in.

And so the question is how do you keep it open, how do you make it easy but try and catch the “flies”? It's not easy. But everyone, not just us, have to do our best. And MAS has put in controls against money laundering. Basically the banks have to be the first line of checks. As I told you just now, there were STRs that were filed by some of the banks. And, the real question is, once we find out the facts, once we know some facts, do we keep quiet? The answer is no. We take action.

Singapore now holds the presidency of the Financial Action Task Force internationally. That's called the FATF. It's a global body that sets the standards and oversees efforts to combat money laundering and financing of terrorism. An officer from the Ministry of Home Affairs is the president, Mr Raja Kumar, who was a senior Police officer.

FATF has assessed our legal and institutional framework, of course before this arrest. And they have assessed us, you know, how good are you in being able to fight money laundering? You have strong licensing controls, strong detection and supervision, good coordination between agencies, good sharing of data and financial intelligence, swift and firm law enforcement when criminal activities are uncovered – these are their conclusions. So they know and we take it seriously.

ZB: Would you want to comment on money laundering activities in other ASEAN countries?

Well, a bit difficult to comment. I'm not an expert on other ASEAN countries. I guess what I can say is you can draw an analogy with how illegal drug trafficking is dealt with. In Singapore we are very strict, our laws are tough, but it's not just the laws. We do a lot of preventive education. And then when our laws are broken, we take action, strict action. There are many countries in the region with very strict laws, but the drug situation is nevertheless not so good. So enforcement, taking action, I think the standards vary. Of course, the size of the country also varies. The difficulties vary. So it's a bit difficult for us to really comment on others.

ZB: Some say that money laundering is not a new topic. Long ago was Indonesians, now Chinese nationals, and that Singapore is turning a blind eye to such escalating issue. What are your views?

You have to ask yourself. You have strict laws against theft, murder, various criminal activities. Does that mean these activities don't take place? They're reduced. And when they do take place, we take action. The same thing, you know, fraud in banks or people say, why did such a fraud take place? You must expect human beings being what they are – a thousand people may act properly, one person will try and do something different.

Fraud in banks or fraud in institutions or criminal activities – just because you have the laws doesn't mean that people won't behave criminally. But you try and create a system where this conduct is reduced and then take action against that conduct. Likewise, money laundering. You can be strict, you can have tough laws. Doesn't mean that people won't try and launder money. They will try. You have to be alert, try and pick it up and deal with it. I would say the fact that we took such action in this case actually enhances our reputation. There are many international financial centres. How many have you come across which have done this? You know, try and recall in the recent past how many major actions have been – how many centres have taken this kind of action? Some have, but how many? And there are trillions of dollars floating around the world. Not all of it is clean. And as I said, how many times have you seen such action being taken? And you look at international journals, you look at articles, you see lots of people saying that bad money is floating around. Do you immediately see action?

The fact that we have taken action when we got to know of the facts, sends a clear signal that we are a no-nonsense place. We'll act against people who abuse our system.

ZB: Money laundering is very vast and sophisticated. So how prepared is the Home Team to fight this battle?

I have made this point earlier, vast amounts are flowing around the world, including coming into Singapore because we are an open place. So you've got to start off by accepting that this is a challenging exercise to identify which is illegal and which is legal. Singapore as a country has tried to put in place a robust, comprehensive anti-money laundering framework, including taking in international best practices. And the frontline is MAS, the financial institutions. They play a key and critical role. And banks, therefore, often the first line of vigilance. The Police and the Home Team come in much later, when some wrongdoing has taken place or there's some evidence of wrongdoing and action will be taken.

And it's really a combined effort with the industry – banks, precious commodities, dealers and so on, vulnerable sectors and areas. They have various mechanisms to identify suspicious activity. And our laws make it a duty for anyone – including, bankers, property developers – to report suspicious transactions. Banks and financial institutions also have a good partnership with regulatory agencies to share information and coordinate. They employ the latest technologies, data analytics, machine learning to try and identify who are the bad persons. And as I said earlier, we work closely with the international community – sharing of information, learning best practices, strengthening, developing international standards, including working with the FATF. But we cannot guarantee that every single illegal dollar will be picked up.

What I can say is that we have a robust mechanism, robust framework, and we will not hesitate to take action.