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SINGAPORE – The Financial Action Task Force (FATF) released its report on May 6,<\/span><\/a> with various jurisdictions assessed across 40 technical compliance aspects and 11 key areas, known as immediate outcomes. <\/p>\n Members are placed on regular follow-up if they do well, enhanced follow-up if some major improvements are required, or subject to further review if there are significant deficiencies in their systems.<\/p>\n Singapore was placed on regular follow-up.<\/p>\n The global financial watchdog noted in its report that the Republic has been tough on financial crime, but could improve in some areas, such as measures to tackle money laundering<\/span><\/a> and terrorist financing.<\/p>\n In a joint statement, the Ministry of Home Affairs (MHA), Ministry of Finance (MOF) and Monetary Authority of Singapore (MAS) noted that the assessment for the period between 2020 and 2025 is an improvement from Singapore\u2019s fourth-round results in 2016.<\/p>\n A: <\/b>FATF is the global financial crime watchdog formed in 1989 by the Group of Seven, an informal bloc of the seven most-industrialised nations \u2013 Britain, Canada, France, Germany, Italy, Japan and the US.<\/p>\n The European Union is also represented.<\/p>\n The independent inter-governmental body FATF is based in Paris and consists of 40 members, including Singapore which joined in 1992.<\/p>\n It is tasked to set international standards to protect the global financial system and tackle financial crime in areas such as money laundering, terrorist financing and financing weapons of mass destruction. <\/p>\n FATF\u2019s recommendations are recognised as the global anti-money laundering and counter-terrorist financing standard, with more than 200 countries and jurisdictions having committed to implement them.<\/p>\n Its members are periodically assessed through rounds of mutual evaluations to determine the degree of technical compliance and effectiveness of their systems.<\/p>\n Each round is roughly a period of 10 years. Singapore is among the first few countries to undergo the most recent fifth round.<\/p>\n A key aspect of the assessment looks at a jurisdiction\u2019s effectiveness in 11 areas, known as immediate outcomes. These can be rated as either high, substantial, moderate or low.<\/p>\n It also looks at compliance with 40 technical requirements, with ratings ranging from compliant, largely compliant, partially compliant and non-compliant.<\/p>\n Based on the ratings in these two aspects, members can be placed on regular follow-up if they do well, enhanced follow-up if some major improvements are required, or subject to further review if there are significant deficiencies in their systems.<\/p>\n A: <\/b>Jurisdictions that are subject to further review may be placed on FATF\u2019s grey or black lists.<\/p>\n The grey list is for those that are placed under increased monitoring and are actively working with FATF to address the deficiencies.<\/p>\n They may suffer reputational damage, which can impede international aid, impact their financial sector, and cause a slowdown in capital inflows.<\/p>\n In some cases, banks may demand extra documentation for transactions from companies based in a grey-listed jurisdiction.<\/p>\n Countries currently on this list include Algeria, Monaco and Venezuela.<\/p>\n The black list is for those found with serious deficiencies, which FATF urges its members to take extra precaution against.<\/p>\n Jurisdictions currently on this list include Iran and Myanmar.<\/p>\n They may be subjected to sanctions for being persistently non-compliant. Firms doing business with nations on the black list are likely to see higher compliance costs, among other things.<\/p>\n A:<\/b> Singapore was placed on regular follow-up, indicating that it has done well. But there are also areas in which it needs to improve, said FATF.<\/p>\n When it came to immediate outcomes, it was rated substantial in seven areas and moderate in four. <\/p>\n This is an improvement from the last report in 2016, when it was rated substantial in four, moderate in six, and low in one.<\/p>\n FATF noted that Singapore has shown strengths in asset recovery and tackling scams by adopting innovative methods and technologies. <\/p>\n But according to the assessment report, it needs to improve its measures in dealing with foreign trusts, unregistered foreign companies and more complex company structures.<\/p>\n For technical compliance, Singapore was found to be compliant in 24 areas, largely compliant in 14, and partially compliant in two.<\/p>\n The areas in which it was found to be only partially compliant were tied to the verification of beneficial ownership information and trusts.<\/p>\n FATF said Singapore\u2019s measures in this aspect are heavily reliant on corporate service providers at the point of incorporation, making it insufficient to deal with the risks.<\/p>\n Its laws on unregistered foreign companies may also be outdated as they are from more than 50 years ago, added the watchdog.<\/p>\n A:<\/b> FATF\u2019s assessments can influence a country\u2019s financial reputation.<\/p>\n International bodies such as the International Monetary Fund, World Bank and United Nations look to standards set by the watchdog, and credit rating agencies actively monitor the FATF reports, which can then affect a jurisdiction\u2019s financial standing in the international market.<\/p>\n Recommendations by the watchdog are often translated into policies by members, including the drafting of laws to tackle areas such as money laundering, terrorism financing and proliferation financing.<\/p>\n These polices are turned into actionable strategies for agencies ahead of the next review. Observers have noted that a \u201cclear national strategy ensures anti-money laundering and counter-terrorism financing efforts are targeted and sustainable\u201d.<\/p>\n In a speech at the Financial Action Task Force Plenary in June 2024,<\/span><\/a> Prime Minister Lawrence Wong said Singapore has made progress against money laundering and terrorism financing at the global level. <\/p>\n \u201cBut the success of the global effort against financial crime is also dependent on effective implementation within national borders,\u201d he added.<\/p>\n PM Wong said that as an international financial and business hub, Singapore faces greater money laundering and terrorism financing risks. <\/p>\n But he added that the country is determined to do what is needed to respond to these risks and safeguard Singapore\u2019s reputation as a trusted financial centre.<\/p>\n To this end, the country has continually reviewed and strengthened its legal frameworks to make them in line with FATF\u2019s standards.<\/p>\n PM Wong noted that Singapore has tightened regulations to increase transparency on beneficial ownership, introduced new regulations, and strengthened existing laws to address risks related to virtual assets, as well as precious stones and metals dealers. <\/p>\n \u201cWe have also strengthened our laws to give our law enforcement agencies more tools and powers to pursue, prosecute and sanction offenders for money laundering offences,\u201d he said, adding that the country has made asset recovery a priority in its national anti-money laundering regime with the publication of its first-ever National Asset Recovery Strategy.<\/p>\n FATF\u2019s latest report showed that Singapore\u2019s ratings improved in four immediate outcomes including asset recovery. <\/p>\n