Singapore readies roll out of anti-money-laundering platform to prevent a 1MDB repeat

Information-sharing platform Cosmic is meant to make it easier for banks to detect and deter scams, money laundering and terrorism financing

Singapore authorities have sought to ensure financial institutions scrutinise flows of money, as assets managed in the city state hit US$4 trillion

Reading Time:2 minutes

Bank headquarters are seen in Singapore’s Marina Bay Financial Centre district. DBS Group Holdings Ltd., Standard Chartered Plc and HSBC Holdings Plc will be among the first banks in the city state to access Cosmic. Photo: AFP

Published: 10:11am, 10 May 2023Updated: 10:12am, 10 May 2023

Singapore banks will be able to share information on potentially risky clients next year, a move aimed at curbing illicit flows amid the city state’s rise as a key financial and wealth hub.

Parliament passed a bill on Tuesday that paves the way for the Monetary Authority of Singapore to set up and maintain a secure digital information-sharing system. The platform called Cosmic is meant to make it easier for financial institutions to detect and deter activities in areas like scams, money laundering and terrorism financing.

“A clean and trusted financial sector is the basis upon which both Singaporeans and foreigners choose to invest and have their funds managed here,” Alvin Tan, Minister of State in the trade ministry, told lawmakers. Tan, who also sits on the MAS board, said there’ll be strict safeguards to protect the confidentiality of information within the system.

Singapore will join the United States and Britain in allowing financial institutions to raise red flags to one another if they spot suspicious transactions related to illegal flows. The most recent prominent case has been 1MDB, in which billions of dollars from the state-owned Malaysian investment fund were siphoned off through bank accounts and shell companies in the city state, Europe, the US and elsewhere.

An advertising hoarding for 1 Malaysia Development Berhad (1MDB) in Kuala Lumpur in 2015. Billions of dollars from the state-owned investment fund were siphoned off through countries including Singapore, the US and those in Europe. Photo: AP

Money laundering is a headache for jurisdictions all over the world. These illicit flows account for between US$800 billion and US$2 trillion, or 2 per cent to 5 per cent, of global gross domestic product in a year, according to a United Nations estimate. In countries like Singapore where offshore funds are several times larger than the size of the economy, the authorities have sought to ensure banks scrutinise flows.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x