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Will Singapore’s five-pronged CFT strategy achieve its goal?

We examine Singapore’s 2022 National Strategy for Countering the Financing of Terrorism, and its potential to support anti-terrorism globally.

Napier AI
December 8, 2022

Singapore published its 2022 National Strategy for Countering the Financing of Terrorism (CFT), or 2022 Strategy, on 7 October 2022, a document laying out the path to success in addressing and combatting the terrorist financing (TF) threats and vulnerabilities identified in the 2020 Terrorism Financing National Risk Assessment (2020 Assessment).

Co-authored by the Monetary Authority of Singapore (MAS), the Ministry of Finance (MOF), and the Ministry of Home Affairs (MHA), the 2022 Strategy presents a holistic, five-pointed response to the challenges laid out in the 2020 Assessment by harnessing the expertise and resources of all role-players in Singapore’s domestic CFT framework, as well as fostering collaboration and cooperation at regional and international levels.

In this blog, we examine the five-pronged strategy, and discuss its potential contribution to the global fight against terrorism and its financers.

What are the threats to and vulnerabilities of Singapore’s CFT framework?

According to the 2020 Assessment, the paramount threat to Singapore is the use of its financial system as a conduit for the illicit financial flows (IFFs) of TF, while the domestic radicalisation of at-risk individuals was also noted. The possibility of terrorist atrocities being carried out in Singapore is deemed less significant, although vigilance of global terrorist organisations and activities should be maintained.

The 2020 Assessment further identified Singapore’s geographical proximity to terrorism-afflicted countries and its global standing as an economic and transport node as making its payment service providers (PSPs) and financial institutions (FIs) more vulnerable to TF risks because of the speed and ease with which their services can be maliciously exploited. Meanwhile the relative infancy of legislation governing the trade of virtual or digital currencies, precious metals and stones, and non-profit organisations (NPOs), is identified as making those industries vulnerable to TF risk.

What are the 2022 National CFT Strategy’s five points?

The five points are:

  1. Coordinated and Comprehensive Risk Identification
  • Singapore implements a whole of government (WOG) approach to TF as well as money laundering (ML) and proliferation financing (PF) across all 15 government agencies engaged in safeguarding the national financial system. The anti-money laundering and countering the financing of terrorism steering committee (AML/CFT SC), manned by top officials from the MAS, MOF, and MHA, provides high level policy leadership, while the Inter-Agency Committee’s (IAC) corollary input fosters transversal co-operation between government entities.
  • The TF risk environment and the AML/CFT regime’s response to it is constantly and rigorously assessed, accounting for evolving threat typologies and global trends.
  1. Strong Legal and Sanctions Frameworks

  • The legislative framework which law enforcement agencies (LEAs) operate under enables, supports, and enhances their powers when acting against TF, terrorist organisations, and terrorist supporters.

  • The policy framework governing TF-related financial sanctions must be clear, fair, and in line with the designations provided by transnational organisations with which Singapore is affiliated, such as those of the Financial Action Task Force (FATF) and the United Nations (UN).

  1. Robust Regulatory Regime and Risk Targeted Supervisory Framework

  • Singapore’s AML/CFT framework is strong and resilient, and  the risk-based supervisory structures and sectorial AML/CFT requirements for private sector role-players such as FIs, PSPs, and NPOs are in line with FATF standards and international best practice.
  • Singapore’s government agencies including MAS continue to provide cross-sector engagement especially for the higher risk sectors, industry guidance, and awareness initiatives to private sector role-players to assist them with implementing their AML/CFT requirements.

  • The responsible agencies  will embrace the evolving technological capacities of data analytics to better monitor and detect TF risks.

  1. Decisive Law Enforcement Actions

  • While Singapore’s LEAs have adopted a firm commitment to acting quickly and decisively against TF threats, terrorists, and terrorist enablers, the 2022 Strategy notes that inter-agency co-operation could be enhanced; private sector involvement in AML/CFT initiatives should be promoted; and the legal framework could foster more successful prosecutions.

  1. International Partnerships and Cooperation

  • Singapore continues to industriously adopt and advance the improving global frameworks for countering TF threats to the international banking system by actively participating in the programmes of transnational organisations such as the FATF.

  • The 2022 Strategy added that Singapore should escalate its legal information-sharing with fellow countries and jurisdictions with the aim of collecting more and better actionable intelligence with which to detect and disrupt the IFFs of terrorist organisations, financers, and supporters.

What does the future hold for Singapore’s 2022 National CFT Strategy?

While the success of the 2022 Strategy remains to be seen, Napier is encouraged to see critical aspects of a successful AML/CFT framework being embraced.

These include multilateral co-operation at every level among all role-players both domestically and abroad; a risk-based approach to addressing emerging threats; enjoining new technologies; and ongoing monitoring and evaluation of existing systems.

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Photo by Ricardo Gomez Angel on Unsplash

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