Chinese Origin Clients With Foreign Passports Reportedly Under Scrutiny In Singapore After $1.8M Money Laundering Fiasco

In the aftermath of a substantial money laundering scandal involving S$2.4 billion ($1.8 billion) last month, banks based in Singapore have increased their vigilance towards clients of Chinese origin who possess foreign passports.

What Happened: According to sources, several financial institutions are now re-evaluating new account applications and transactions related to clients with Chinese heritage who hold investment-linked passports.

A nameless international bank is allegedly closing some accounts owned by individuals who are nationals of countries including Cambodia, Cyprus, Turkey, and Vanuatu. Several other banks in the city-state are deliberating over the acceptance of new funds from clients with similar profiles on a case-by-case basis, thereby extending the approval process and triggering further inquiries.

These new anti-money laundering strategies from Singapore are a reaction to a series of island-wide raids carried out on August 15, which resulted in the apprehension of 10 wealthy individuals of Chinese origin. These operations, led by law enforcement, led to the confiscation of over S$2.4 billion in assets, comprising cash, cryptocurrencies, and properties.

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About 10 local and international banks in Singapore, including Credit Suisse, Julius Baer Group Ltd., Citigroup Inc. C, Oversea-Chinese Banking Corp., and United Overseas Bank Ltd., have been embroiled in the scandal, raising questions about their efficacy in thwarting the illicit movement of funds. These banks have reaffirmed their commitment to battling money laundering and collaborating with the authorities.

The Monetary Authority of Singapore is currently in supervisory discussions with the financial institutions linked to the potentially contaminated funds, vowing to take stringent action against those found to be in violation of rules or lacking sufficient controls to mitigate money-laundering risks.

Why It Matters: Last month, Singapore’s law enforcement seized assets worth around S$1 billion ($735 million), related to money laundering accusations, predominantly from individuals holding Chinese passports. The seizure included 94 real estate properties, 50 vehicles, and documents linked to digital assets.

This recent scandal has put a spotlight on Singapore banks’ anti-money laundering measures and raised concerns about the flow of illicit funds, leading to increased scrutiny of Chinese-origin clients.

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