Singapore’s Battle Against Illicit Financial Flows

Picture: East Asia Forum

In an article by East Asia Forum, John Langdale asserts that despite Singapore’s efforts to control money laundering, the city-state struggles with spillover effects from Southeast Asia's rising transnational crime, vulnerabilities in free trade zones, and corruption in commodity trading.

Singapore has enjoyed remarkable economic success over the past 50 years by attracting high-growth manufacturing and service industries. A significant component of this success stems from its role as a regional hub for Southeast Asia and a global hub for commodity trading, particularly oil and gas.

Global and regional hubs facilitate high growth, add significant value and employ highly skilled business and financial intermediaries. These same characteristics make such hubs attractive for illicit transactions. While some hubs like Dubai make little effort to prevent illicit activity, Singapore attempts to control it but suffers from being in a region with high levels of corruption and growing transnational crime rates.

Singapore has traditionally functioned as an entrepot for Southeast Asia. It has prospered through this trade, but rising transnational crime in the region is having negative spillover effects for Singapore. Transnational crime is particularly problematic in the Mekong regionof Myanmar, Cambodia and Laos. Concerns exists over the rise of online gambling and scamming centres in these countries, adding to existing illegal drug production and other illicit activities.