An Overview of the

Anti-Money Laundering and Anti-Terrorist Financing Laws in Singapore (Part I)

The article is the first of two parts discussing the anti-money laundering and anti-terrorist financing laws applicable 
to Singapore.

There are two separate legal regimes governing money laundering offences and terrorism/terrorist financing offences in Singapore. The first part of this article seeks to present an overview of Singapore’s anti-money laundering laws (‘AML laws’) and the second part will focus on the combating of the financing of terrorism (‘CFT laws’) in Singapore.

Briefly, money laundering may simply be defined as a process to make ‘dirty’ money (proceeds from criminal activities) look ‘clean’ (or legitimate). Banks and other financial institutions have traditionally been used by criminals and drug traffickers to launder their ‘dirty’ money. As a result of the robust global efforts by international agencies such as the Financial Action Task Force (‘FATF’) and regulators, some money laundering activities have migrated to ‘alternative’ or ‘underground’ banking (such as the ‘hawala-hundi’ in the Indian sub-continent; the ‘black pesos’ in Latin America and the ‘chit and chop’ in East Asia); and to the professional industries (commonly known as the ‘gatekeepers’), which include mainly lawyers and accountants. This article is written with the banking and professional readership in mind.

Overview of Anti-money Laundering Laws in Singapore (‘AML Laws’)

Money laundering cases in Singapore

The first money laundering case in Singapore, since the anti-money laundering law was first enacted, was the ‘SIA’ case in 2001 where SIA’s supervisory clerk, Teo Cheng Kiat, cheated SIA of 
$35m over a period of 13 years. He had the dubious distinction to be the first person to be prosecuted for, and pleaded guilty to, a money laundering offence (besides 34 other charges) in Singapore and was sentenced to 24 years imprisonment. The following year (2002), it was the ‘HSBC’ case where a HSBC customer-service officer, Chong Seah Wee, stole US$7.2m (S$12.6m) from HSBC’s Nostro account over a period of five years. He pleaded guilty to the single money laundering charge and the other charges of cheating (altogether there were more than 1,000 charges which took the court interpreter two hours to read the charges) and was sentenced to 12 years imprisonment. This case drew curious attention from the public because Chong was a compulsive gambler; he often betted (with the stolen money from HSBC) on the 4D lottery with $500,000 per week (and struck the first prize twice totalling $6m). When the police raided his home they found  over 1,000 4D tickets; hence the charges exceeding more than 1,000.

In 2003, it was the ‘Asia Pacific Brewery’ case (‘APB’ case), which was the biggest fraud case in Singapore history. In the APB case, its finance manager, Chia Teck Leng, was charged for 44 offences of forgery and cheating and two charges for money laundering offences involving a total sum of S$117m. He pleaded guilty to all 46 charges and was sentenced (interestingly by the same District Court judge in the SIA case) to a whopping 42 years imprisonment! What captured the public’s interest in this case was Chia’s globe-trotting high roller gambler status (he flew in private jets to bet in the world’s leading casinos, at $400,000 per bet and lost $62.3m). His enormous gambling funds came from the four banks he had cheated (Skandinavista Enskilda Banken, Sakura Bank, Fuji Bank and Bayerische Hypo-und Vereinsbank) which is now the subject of several civil suits by these four banks against APB, Chong’s employer.

These are the three most ‘illustrious’ money laundering cases in Singapore so far, since money laundering was first criminalised as a crime in 1992 (under ‘The Drug Trafficking (Confiscation of Benefits) Act’ (‘DTA’).

The AML Legal Regime

The key anti-money laundering legislation in Singapore is the ‘Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act’ (CDSA’).¹ The CDSA, passed on 6 July 1999, basically amended the DTA (criticised for its limited scope in criminalising only drug-related offences as money laundering) to expand the scope of money laundering offences to include non-drug related offences.² The CDSA regime adopts the ‘Predicate Offence’ approach (as distinguished from the ‘Threshold’ approach, where all criminal offences exceeding certain threshold penalties are criminalised as ‘money laundering’, eg Hong Kong and Australia). According to the CDSA, the laundering of proceeds from all Drug Trafficking Offences and the 182 Serious Crimes specified in Schedule 2, (collectively, ‘Criminal Conduct’) constitutes a money laundering offence. In other words, the laundering of proceeds from other criminal activities which do not fall within ‘Drug Trafficking Offence’ and ‘Criminal Conduct’, is, legally speaking, not ‘money laundering’ (but, of course, punishable under other penal laws). Thus, the laundering of proceeds from tax evasion, smuggling (goods, human beings) corporate malfeasance (insider trading, market manipulation, false trading) and terrorism are, strictly, not ‘money laundering’ offences.³ The legal implication is (as we shall see later) that a whistle-blower of such offences will not be able to invoke the statutory protection under the CDSA. So it matters what the whistle-blower is disclosing to the Authorised Officers (eg CAD, MAS).

Anti - Money Laundering and Anti- Terrorist Financing Laws in Singapore

The Predicate Money Laundering Offences Under the CDSA

There are basically four types of money laundering offences criminalised under the CDSA. The first money laundering offence is committed when a person:

(a) conceals or disguises any property which (in whole or in part, directly or indirectly) represents his benefits from Drug Trafficking or from Criminal Conduct; or

(b) converts or transfers that property or removes it from Singapore. See sections 46(1) and 47(1), CDSA. The first offence is essentially a ‘DIY’ (‘do it yourself’) type of money laundering offence where the criminal is laundering his own ‘dirty’ money. This is the offence which Teo Cheng Kiat (SIA case), Chong Seah Wee (HSBC case) and Chia Teck Leng (APB case) were charged for. More specifically, Teo and Chia were charged for ‘concealing’ the proceeds of their theft and Chong for ‘conversion’ (converting the stolen money from HSBC into UOL shares).

The second money laundering offence is committed when a person who, knowing or having reasonable grounds to believe that any property (in whole or in part, directly or indirectly) represents another person’s benefits from Drug Trafficking or Criminal Conduct, acquires that property for no or inadequate consideration. See sections 46(3) and 47(3), CDSA. For instance, if a person knowingly bought a diamond (worth $100,000) for $50,000 from a drug trafficker while suspecting that the diamond was part of the proceeds from his drug trafficking activities, he may be charged for this second offence.

The third money laundering offence is committed when a person knowingly (both subjective and objective sense) assists a person to commit the first offence so as to avoid the prosecution of a money laundering offence or to avoid the enforcement of a confiscation order under the CDSA. See sections 46(2) and 47(2), CDSA. This third offence is essentially an offence of abetment. A typical example would be a banker who knowingly assists a customer to receive ‘dirty’ money and to wire transfer the ‘dirty’ money out of Singapore. In Hong Kong, the senior manager of Po Sang Bank was jailed for one year for turning a blind eye when a money lender channelled HK$109m of suspicious funds through his branch (for which he was paid HK$10,000). Another example is a solicitor who knowingly accepts a large deposit (‘dirty’ money) to buy a large property or large vessel or which is deliberately aborted (so that the client will receive a ‘clean’ cheque from a law firm, especially reputable ones, from the aborted transaction). The key point to note is that the mens rea tests are both subjective (‘knowing’) as well as objective (‘have reasonable grounds to believe’). It is obvious that the prosecution will opt for the objective test. To negate the objective mens rea element, the banker or lawyer will have to rely on the ‘industry best practices’ to satisfy the court that they have complied with what a ‘reasonable banker’ or ‘reasonable lawyer’ would have done. Therefore, a banker needs to be compliant with the MAS ‘Prevention of Money Laundering Guidelines’ (‘MAS 626’) and the Association of Banks in Singapore’s ‘Guidelines on Anti-Money Laundering and Combating of Financing of Terrorism.’⁴

For a lawyer who is charged for a money laundering offence, he would try to negate the objective knowledge (mens rea) by demonstrating that he has complied with the Law Society of Singapore’s  ‘Guidelines on the Prevention of Money Laundering’ (guidelines the writer suspects not many lawyers may be aware of, and which are already overdue for an ‘overhaul’ because they do not address terrorist financing).⁵

The fourth money laundering offence is committed when a person enters into an arrangement, knowing or having reasonable grounds to believe that by the arrangement (a) the retention or control by or on behalf of another (referred to in this section as ‘that other person’) of that other person’s benefits of Drug Trafficking or Criminal Conduct is facilitated (whether by concealment, removal from Singapore, transfer to nominees or otherwise); or (b) that other person’s benefits from Drug Trafficking or Criminal Conduct are (i) used to secure funds that are placed at that other person’s disposal, directly or indirectly; or (ii) are used for that other person’s benefit to acquire property by way of investment or otherwise AND knowing or having reasonable grounds to believe that the other person carries on/has carried on Drug Trafficking or engages/has engaged in Criminal Conduct and has benefited from these criminal activities. See sections 43(1) and 44(1), CDSA. Like the third offence, this is also an offence of abetment (‘knowingly assisting’). Essentially, the offence is about the offender (money launderer) assisting a drug trafficker or a serious crime offender (criminal) to (a) retain or control his benefits from these criminal activities or (b) secure such ‘dirty’ funds or (c) invest such funds. However, unlike the third offence, the prosecution has to prove that there is an ‘arrangement’ (ie some form of agreement) between the money launderer and the criminal (evidence of such arrangement would typically be some payment of commission).

A person charged under the fourth offence has a good defence if he can prove (a) that he did not know or had no reasonable ground to believe that the arrangement was related to a person’s proceeds of Drug Trafficking or Criminal Conduct; or (b) that he did not know or had no reasonable ground to believe that, by the arrangement, the retention or control of the person’s proceeds from these criminal activities would be facilitated or used; or (c) that he intended to report to the Authorised Officer and there is reasonable excuse for his failure to do so or (d) he had disclosed to the appropriate person in his company (typically, the compliance officer or money laundering reporting officer). See sections 43(4) and 44(4), CDSA.

The penalty for the commission of any of the four money laundering offences above is a fine not exceeding $200,000 or a term of imprisonment not exceeding seven years, or both. See sections 43(5) and 46(6), CDSA.

Tipping-off Offence

Besides the four money laundering offences outlined above, bankers and professionals should be careful not to commit the offence of ‘tipping-off’. According to sections 48(1) and (2), CDSA, a person who (a) knows or has reasonable grounds to suspect that an Authorised Officer (defined in s 2 to include the CNB, CPIB, CAD and Police officers and any other person authorised by the Minister) is acting (or is proposing to act) in an investigation for the purposes of the CDSA; or (b) knows or has reasonable grounds to suspect that a disclosure has been made to an Authorised Officer under the CDSA; and (c) discloses to any other person information which is likely to prejudice the investigation; commits a tipping-off offence. A typical example would be a banker calling up the customer to inform him of CAD’s investigation into his bank account or to inform the customer that the bank’s compliance officer has lodged a STR (suspicious transaction report) against him. Tipping-off can pose tricky problems for bankers. For instance, while the CAD is investigating a customer’s account, the customer calls up the bank to wire transfer the funds (in the account under investigation) to another jurisdiction (or to close and liquidate the account). Since the customer’s account is under investigation, the banker would be hesitant to comply with the customer’s instruction to remove the funds out of Singapore. If he does not want to comply with the customer’s instruction, what is the banker supposed to tell the customer? If the banker informs the customer that he cannot comply with his instruction because his account is under investigation, he can be charged for a tipping-off offence. Thus, bankers have to resort to giving ‘creative’ excuses (eg ‘the system is down’, ‘it takes time to clear the funds’, etc) while waiting for CAD, hopefully, to give a Restraint Order.

There is a specific ‘carve-out’ provision to protect lawyers (by virtue of the nature of the profession) against a tipping-off offence in certain specific circumstances. Section 48(3)(a) expressly states that it is not a tipping-off offence for an advocate and solicitor (or his employee) to disclose any information or other matter to a client (or client’s representative) ‘in connection with the giving of advice to the client in the course of and for the purpose of the professional employment, of the advocate and solicitor.’ For instance, while acting for a client in a potential drug case, the lawyer does not commit a tipping-off offence when he informs his client that the CNB (Central Narcotics Bureau) has called up his office to ask for certain information relating to the client. What is unclear is, what if the lawyer was acting for the client in a conveyancing matter and CNB’s enquiry is not related to the convenyancing matter? It is submitted that s 48(3) (a) would still apply if the lawyer can prove that he was acting ‘in connection with the giving of advice in the course of and for the purpose of ... professional employment as an advocate and solicitor.’ However, it should be pointed out that the exception to the general rule for tipping-off under s 48(3) does not apply to a solicitor-client relation where the disclosure is for the furtherance of an illegal purpose. 
See s 48(4).

The penalty for a tipping-off offence is a fine not exceeding $30,000 or a term of imprisonment not exceeding three years or both. It is a defence for a tipping-off offence if the ‘tipper’ can prove that he did not know and had no reasonable ground to suspect that the disclosure was likely to be prejudicial to the investigation.

Reporting of Suspicious Transactions

One of the most challenging aspects of compliance with the CDSA, particularly for bankers, is the lodging of ‘STRs’ or ‘SARs’ (suspicious activities reports). Essentially, this is about whistle-blowing against the customer or client.

There are two reporting routes under the CDSA, viz s 39(1) (general disclosure route) and sections 43(3)/44(3) (specific disclosure route). First, let us consider the general disclosure route under s 39(1), which states:

Where a person knows or has reasonable grounds to suspect that any property:

      (a)   in whole or in part, directly 
                           or indirectly, represents the 
                              proceeds of;

      (b)   was used in connection with; 
                       or

  (c)   is intended to be used in connection with Drug Trafficking or Criminal Conduct … and the information or matter on which the knowledge or suspicion is based came to his attention in the course of his trade, profession, business or employment, he shall disclose the knowledge, suspicion or the information or other matter ... to an Authorised Officer as soon as is reasonably practicable after it comes to his attention.

There are several key points to take note of regarding whistle-blowing under this section. First, reporting of a suspicious transaction under the CDSA is mandatory (as denoted by the operative word ‘shall’; previously under the DTA the word used was ‘may’, denoting discretionary). Secondly, the scope of reporting covers both proceeds of Drug Trafficking and Criminal Conduct, (ie ‘dirty money’) as well as property (which includes money) intended to be used in connection with Drug Trafficking and Criminal Conduct (ie ‘clean money for dirty use’). However, it is restricted to proceeds from or for Drug Trafficking and Criminal Conduct; it does not cover, for instance, tax evasion, corporate malfeasance, smuggling and a host of other crimes. The mandatory reporting under s 39(1) does not extend to the reporting of such crimes. Thirdly, what if the funds in the bank account are suspected to be proceeds partly from tax evasion and partly from corruption? Can a banker lodge a STR under s 39(1)? The answer is ‘yes’ because para (a) has clarified that so long as the property ‘in whole or in part, directly or indirectly’ represents the proceeds of Drug Trafficking or Criminal Conduct (which includes corruption).

To reinforce the mandatory aspect of reporting, the CDSA has criminalised a failure to report. In other words, failure to report a suspicious transaction is a crime by itself and punishable, if found guilty, with a fine not exceeding $10,000. This is the general rule on the reporting of a suspicious transaction.

Statutory Protection for Whistle-blowers

One of the vexing issues regarding reporting of suspicious transactions is the obligation of banks to whistle-blow against their customers and lawyers against their clients. Bankers are bound by their duty of confidentiality to their customers under common law (Tournier’s case) and s 47, Banking Act (Cap ). Lawyers are also bound by their duty of confidentiality (under ‘privileged communication’) to their clients. As far as banks are concerned, for the purpose of complying with s 39(1) reporting, all the banking secrecy rules are ‘lifted’. Section 39(6) has clearly provided an exception to the general rule of disclosure by stating that such disclosure to the Authorised Officer ‘shall not be treated as a breach of any restriction upon the disclosure imposed by law, contract or rules of professional conduct’ and shall not be liable for any loss arising out of the disclosure. Hence, banks have no ‘banking secrecy’ issue when whistle-blowing against their customers under the CDSA. However, it should be noted that the statutory protection provided under s 39(6) only extends to disclosures relating to ‘Drug Trafficking’ and ‘Criminal Conduct’ activities. Therefore, if a bank lodges a STR which is not related to Drug Trafficking or Criminal Conduct (eg tax evasion), it cannot subsequently invoke the statutory protection under s 39(6).

What about lawyers? Does the mandatory whistle-blowing provision under s 39(1) extend to lawyers? Can a client sue his lawyer for breach of his professional duty of confidentiality if he whistle-blows against him? These are very contentious issues in other jurisdictions. As far as Singapore’s position is concerned, it appears to be quite clear. First, there is a limited exception granted to lawyers regarding ‘legal privilege’. Section 39(4) has expressly created an exception to the general rule on whistle-blowing for lawyers in not requiring them to disclose information which are ‘items subject to legal privilege’ (defined in s 35(2) to mean communication between a lawyer and his client in connection with the giving of legal advice to the client or in connection with or in contemplation of legal proceedings and items enclosed with or referred to in such communication). Therefore, a lawyer has no legal obligation to whistle-blow against his client in so far as it relates to ‘privileged’ information. However, this exemption does not extend to any communication for furthering a criminal purpose. Second, s 39(6) further protects a lawyer who whistle-blows against his client under s 39(1) by immunising him against any loss suffered by his client arising out of the disclosure.

Besides s 39 (6), there is further statutory protection for whistle-blowing in relation to the fourth money laundering offence under sections 43(3) and 44(3). Briefly, if a person whistle-blows in relation to the property, funds or investments connected with Drug Trafficking or Criminal Conduct pursuant to sections 43(3) and 44(3), he is legally immunised against any potential charge for money laundering. His disclosure will not be treated as a breach of law, contract or rules of professional conduct, and he will not be liable in damages for loss arising from disclosure. Section 45(1) further provides ‘veiled’ protection in that the identity of whistle-blowers in any civil or criminal proceeding cannot be disclosed if the disclosure was made under sections 43(3) or 44(3).

Complying With Court Orders

A banker or professional advisor may receive various court orders from an Authorised Officer in the course of his work, such as a Production Order, Search Warrant, Restraint Order, Charging Order and Confiscation Order.

Production Order (sections 30-33)

A Production Order is a court order to compel a person to produce or to grant access to the materials (books, documents etc) in his possession, to assist in the investigation of a Drug Trafficking Offence or a Criminal Conduct. A person must comply with a Production Order within seven days. Generally, the court will issue a Production Order if:

(a)  there are reasonable grounds for suspecting that a person has carried on or has benefited from Drug Trafficking or Criminal Conduct; or

(b) there are reasonable grounds for believing that the material has substantial value to the investigation.

However, these general conditions are subject to two exceptions regarding lawyers and banks. First, the Production Order does not cover any ‘item subject to legal privilege’ (eg the legal opinion given by a customer’s lawyers). Second, if the Production Order is to be made against a bank, the application must be made by the Attorney-General or his authorised person.

A person who fails to comply with a Production Order may be fined an amount not exceeding $10,000 or imprisoned for a term not exceeding two years, or both. Failure to comply with a Production Order includes giving false or misleading materials or failing to give the correct information to the 
Authorised Officer.

Search Warrant (section 34)

Instead of applying for a Production Order, an Authorised Officer may apply to the court for a Search Warrant to authorise him to enter and search the premises. The grounds for an application for a Search Warrant are the same as those for a Production Order. As in the case of a Production Order, a Search Warrant does not extend to ‘items subject to legal privilege’. A person who hinders or obstructs an Authorised Officer in executing the warrant is punishable with a fine not exceeding $10,000 or a term of imprisonment not exceeding two years, or both.

Restraint Order (sections 15-16)

A Restraint Order (or freezing order) is an order issued by the High Court to prohibit a person from dealing with any ‘Realisable Property’ (defined in s 2 to mean any property held by the defendant, and includes gifts to the defendant). A Restraint Order may only be issued by the High Court where: (a) proceedings have been instituted against the defendant for a Drug Trafficking Offence or a Serious Offence (ie Criminal Conduct); (b) the proceedings have not been concluded; and (c) the Court is satisfied that there is reasonable cause to believe that the defendant has derived benefits from Drug Trafficking or from Criminal Conduct.

Charging Order (sections 15-18)

A Charging Order is an order issued by the High Court to impose on a Realisable Property to secure payment to the Government. It is made where a Confiscation Order has not been made (typically a precursor to a Confiscation Order). The grounds for a Charging Order are the same for a Restraint Order. A Charging Order may be imposed on any interest in a Realisable Property held beneficially by the defendant in any immovable property in Singapore (eg a building), government or corporate securities and unit trusts. The legal effect of a Charging Order is equivalent to an equitable charge (thus ranking below a legal charge).

Confiscation Order (sections 4, 5 
and 13)

A Confiscation Order (or a forfeiture order) is an order by the court, upon the conviction of a defendant, of a Drug Trafficking Offence or a Serious Offence, to confiscate the benefits derived by the defendant from these offences. There are two key differences between a Charging Order and a Confiscation Order. First, in a Charging Order, the defendant is not convicted; whereas a Confiscation Order cannot be issued unless the defendant has been convicted. This is one of the criticisms by the International Monetary Fund (‘IMF’) in its Country Report No 04/104 (issued in April 2004) on Singapore (‘FSSA Report’).⁶ Second, in a Charging Order, the defendant is still the legal owner; whereas in a Confiscation Order, the defendant has lost his legal ownership (forfeited). Thus, a Confiscation Order is the ultimate court order to deprive a money launderer of his ‘dirty’ money and assets.

One of the issues that concerns a bank is its rights over a customer’s mortgage which is subject to a Confiscation Order. The question is: What is the bank’s rights as the mortgagee in such circumstances? The first thing a bank should do is to apply to the court for a declaratory order to assert its interest in the property under s 13(1). The Court will make an order declaring the nature, extent and value of the bank’s interest in the property, provided it is satisfied that the bank was not in any way involved in the defendant’s Drug Trafficking and Criminal Conduct activities. Hence, to protect its interest as a mortgagee, a bank must ensure its employee is not involved in the customer’s money laundering activities; otherwise, from a ‘fully secured’ lender, it may end up as an ‘unsecured’ lender.

Record Keeping (sections 36-38)

All Financial Institutions (defined in s 2 to include a bank, merchant bank, finance company, capital market services licence holder under SFA, financial advisor under FAA, and insurance company) must retain all Financial Transaction Documents (‘FTDs’) for the Minimum Retention Period (six years).

A FTD includes any document relating to account opening/closing, operation of accounts, safe deposit box, wire transfer, loan application and record of customer identification. Failure to retain these FTDs for the Minimum Retention Period is an offence punishable with a fine not exceeding $10,000. Furthermore, a Financial Institution must also keep a register of all FTDs released (to the Authorised Officers); failing which it is also liable to a fine not 
exceeding $10,000.

Extra-territoriality

The CDSA, according to s 3(5), applies to a property ‘situated in Singapore and elsewhere’. Hence, the CDSA has extra-territorial effect. This is also clearly evident in the definitions of ‘Criminal Conduct’ and ‘Drug Trafficking’ in S2 where the same language (‘whether in Singapore or elsewhere’) is used and in the definition of ‘Foreign Drug Trafficking Offence’ and ‘Foreign Serious Offence’ This means that if a person commits a money laundering offence overseas, he is deemed to have committed the offence in Singapore and the CDSA will apply.

IMF’s Assessment of Singapore’s AML/CFT Laws

As a conclusion to this part of the article, let us have some perspective as to how Singapore’s AML laws under the CDSA are viewed overseas.

The IMF, in its latest FSSA (Financial System Stability Assessment) Report (issued in April 2004) on Singapore, had commended Singapore as follows:

Singapore has in place a sound and comprehensive legal, institutional, policy and supervisory framework for AML/CFT (para 220) ... The Corruption, Drug Trafficking and Other Serious Crimes Act criminalise money laundering for the range of serious crimes beyond drug trafficking, impose a duty on all persons to make reports of suspicious transactions, and have changed the criminal intent requirement for criminal money laundering offences to a standard of reasonable ground to believe. (para 221)

However, IMF has reservations on the scope of criminalisation of money laundering offences (in particular its limited list of 182 serious crimes) under the CDSA and Singapore’s non-ratification of the Palermo Convention:

The Palermo Convention has yet to be ratified (para 223) ... Singapore criminalises ML in a manner broadly consistent with international standards and imposes the requisite criminal and other sanctions. Singapore has adopted the list approach to predicate crimes, an approach recognised by FATF. Predicate offences for ML include crimes specified in the Vienna Convention, but not all those under the Palermo Convention.⁷ Singapore has signed Palermo and is working toward its ratification. Ratification of the Palermo Convention should move forward quickly. The mission is of the view that an all serious crime approach would be preferable ... Laws impose appropriate criminal sanctions for ML offences, although fines for legal entities should be reviewed to ensure monetary sanctions are sufficient. (para 224)

IMF has recommended that:

At a minimum, ensure all offences with a maximum penalty of four years or more become predicate offences to money laundering. 
(para 240).

IMF has further pointed out certain perceived ‘weaknesses’ in the ‘confiscation of proceeds’ provisions under the CDSA regime:

Confiscation and provisional measures provisions are quite comprehensive. Except for terrorism financing, generally a conviction must be obtained in order for confiscation to occur. Adequate powers exist to restrain and freeze assets. Specific provisions addressing identification and tracing are needed. Laws generally provide for the protection of third party rights, but minor changes are recommended to ensure all necessary protection. (para 226)

Hence, IMF has recommended the following action:

(i) adopt specific provisions 
addressing the tracing and identification of proceeds; and (ii) for third party rights, have specific provisions for addressing rights in pre-trial restraint period. (para 240)

However, IMF’s main criticism was the Mutual Legal Assistance in Criminal Matters Act (‘MACMA’), which is beyond the scope of discussion under 
this article.

Tan Sin Liang

S L Tan & Co

E-mail: sltannco@singnet.com.sg