S'pore improves on processes to counter financial crime since last review in 2016: Global watchdog

Singapore's governance structures, legal frameworks and processes to counter financial crime have been strongly affirmed by the Financial Action Task Force (FATF), an international watchdog.

A joint statement released by the Monetary Authority of Singapore (MAS), Ministry of Home Affairs (MHA) and Ministry of Finance (MOF) on May 6 outlined the FATF's assessment.

The FATF said that Singapore's fifth round results in 2026 have improved from the fourth round in 2016, despite FATF's standards being significantly enhanced.

According to the joint statement, Singapore is among the first few countries to have undergone the fifth round of its mutual evaluation assessment, having undergone it from 2020 to July 2025.

What is the FATF?

The FATF is an independent inter-governmental body that promotes policies to protect the global financial system against money laundering (ML), terrorist financing (TF) and the financing of proliferation of weapons of mass destruction (PF).

The 40-member body sets international standards for Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) and Counter-Proliferation Financing (CPF).

Singapore has been a member of the FATF since 1992.

Mutual Evaluations

FATF members are periodically assessed through peer reviews known as Mutual Evaluations to monitor their levels of compliance, both in technical compliance and effectiveness.

Based on the results of the mutual evaluation, countries are categorised into one of three monitoring mechanisms, ranked from best to worst: Regular Follow-up, Enhanced Follow-up and the FATF International Cooperation Review Group (ICRG) process.

In 2026, Singapore was placed on Regular Follow-up, the process for FATF members who have done well, an improvement from 2016's Enhanced Follow-up.

Of 11 Immediate Outcomes, 7 substantially effective

According to the FATF's report published on May 6, of the 11 Immediate Outcomes (IOs), Singapore was substantially effective on 7 metrics and moderately effective on 4.

Singapore was ranked substantially effective in:

• IO.1 Assessment of risk, coordination, and policy setting
• IO.2 International co-operation
• IO.3 Financial sector and virtual asset supervision and preventive measures
• IO.4 Non-financial sector supervision and preventive measures
• IO. 6 Financial intelligence
• IO. 8 Asset recovery
• IO.9 Terrorist financing investigations and prosecutions

Strengths

According to the joint statement, the FATF assessed Singapore to have robust governance structures and a legal framework to address the three main risks, supported by strong operational coordination and cooperation mechanisms.

The FATF said that Singapore had a sound risk understanding of ML, TF and PF across the government and among obligated entities such as banks, supported by strong cooperation among stakeholders in the public and private sectors and international stakeholders.

The FATF noted that Singapore's risk-focused system of supervision of AML and CFT obligated entities was robust.

The FATF added that Singapore had a well-established law enforcement system supporting investigations and prosecutions, including the effective use of financial intelligence, strong asset recovery capabilities and international cooperation.

Areas for improvement

In the report, the FATF also identified four areas where Singapore can further strengthen its framework.

For IO. 5, transparency and beneficial ownership, the FATF said that "risks should be identified, analysed and understood to mitigate significant risks more quickly" and to "review, enhance, and implement additional mechanisms to ensure accuracy".

The FATF said that this includes Unregistered Foreign Companies maintaining bank accounts, investing in funds or purchasing real estate, trusts not formed in Singapore or not formed through Licensed Trust Companies (LTCs), and legal persons not operating in line with original policy intent and complex arrangements.

"Based on findings arising from review of risk assessment, identify and implement necessary enhancements to Singapore's multi-pronged approach to trusts."

In IO. 7, money laundering investigations and prosecutions, the FATF said Singapore should review and refine the process for prioritising ML investigations "to better consider Singapore's risk and context, and pursue complex, high-value investigations".

The FATF also said that Singapore should ensure effective and dissuasive sanctions are applied proportionately to the offence.

Recommends more streamlined approach

In the report, regarding IO. 10, terrorist financing preventive measures and financial sanctions, the FATF noted that Singapore should use a more "streamlined approach to reach all competent authorities and reporting entities".

The FATF said that authorities should use a wider range of skill sets, including beneficial ownership information, to ensure funds and assets are identified.

The FATF added, "Ensure that funds and assets related to TF are immobilised, rather than only immobilising the individual when under investigation for TF offences."

Lastly, for IO. 11, proliferation financing financial sanctions, the FATF said to improve supervisory coverage and intensity, and engagement for Virtual Asset Service Providers (VASPs), typically used in cryptocurrency, and Corporate Service Providers (CSPs).

The FATF said that, besides deepening context-specific understanding of PF Targeted Financial Sanctions (TFS) evasion risks, Singapore should increase such engagement with foreign flag states to increase awareness.

In the joint statement, MAS, MHA and MOF said: "The level of PF risk awareness can be improved in certain sectors that are not traditionally subject to FATF obligations, such as representation offices of foreign flag states."

Money laundering case in 2023

According to the FATF's report published on May 6, in its key findings, a significant event that occurred during the assessment window include the 2023 arrest of 10 offenders convicted in the Fujian Gang money laundering case, which involved S$3 billion in assets.

FATF's report said: "Singapore used financial intelligence to detect, investigate and prosecute a complex case where foreign persons brought billions derived from foreign remote gambling offences, representing one of the world’s largest crackdowns on money laundering in 2023."

"This case highlights the quality of Singapore’s law enforcement."

Firmly committed to complying with FATF standards

In the joint statement, MAS, MHA and MOF said, "Singapore remains firmly committed to complying with the FATF Standards, and welcomes the FATF’s recommendations."

"We are aware that Singapore, like other open economies, will continue to face nefarious actors who seek to exploit our economy and financial system for illicit purposes."

MAS, MHA and MOF said that combating financial crime will remain challenging due to the rapid change in criminal typologies and increasingly transborder nature.

MAS, MHA and MOF added that they will continue to study FATF's recommendations and assess how to adopt them.

"Singapore will continue to maintain an effective AML/CFT/CPF regime to safeguard our reputation as a trusted and credible financial centre, and business and trading hub, while remaining welcoming to legitimate businesses and investors."