Oral Answer by Senior Minister of State for Law Mr Murali Pillai on Addressing Gaps Identified in Financial Action Task Force's Recent Assessment of Singapore

7 July 2026 Posted in Parliamentary speeches and responses

Name and Constituency of Member of Parliament
Mr Chua Kheng Wee Louis (Member of Parliament for Sengkang GRC)

Question
To ask the Minister for Law in view of the Paris-based Financial Action Task Force’s assessment that Singapore is partially compliant in implementing technical requirements on transparency and beneficial ownership of legal persons and legal arrangements, how is the Government planning to address gaps in relation to verification requirements and the accuracy of beneficial ownership information.

Name and Constituency of Member of Parliament
Mr Chua Kheng Wee Louis (Member of Parliament for Sengkang GRC)

Question
To ask the Minister for Law in view of the findings of the Mutual Evaluation Report of Singapore published in May 2026 by the Paris-based Financial Action Task Force, what steps will be taken to (i) reduce delays in addressing mutual legal assistance requests (ii) increase the use of formal and informal cooperation channels in transnational crime investigations and (iii) accelerate asset recovery efforts from abroad.

Name and Constituency of Member of Parliament
Ms Sylvia Lim (Member of Parliament for Aljunied GRC)

Question
To ask the Minister for Law what enhancements are being considered to counter proliferation-financing (PF), given the observation in the Financial Action Task Force’s Mutual Evaluation Report of Singapore 2026 that the risk mitigation measures in Singapore’s Counter PF Strategy are general and not proportional to risk and that Singapore’s PF National Risk Assessment highlights higher-risk areas lacking mitigation measures.

Name and Constituency of Member of Parliament
Ms Sylvia Lim (Member of Parliament for Aljunied GRC)

Question
To ask the Minister for Law what actions the Government will take in response to the finding in the Financial Action Task Force’s (FATF) Mutual Evaluation Report of Singapore 2026 that Singapore was moderately effective as regards Transparency and Beneficial Ownership and that mitigation measures for Unregistered Foreign Companies and Trusts are insufficient.

Name and Constituency of Member of Parliament
Ms Sylvia Lim (Member of Parliament for Aljunied GRC)

Question
To ask the Minister for Law what is the Government’s assessment of the Financial Action Task Force’s Mutual Evaluation Report of Singapore 2026 finding that financial sanctions against financial institutions (FIs) and virtual asset service providers (VASPs) are not proportionate when considering the size of the FIs or VASPs, the serious nature of breaches and Singapore’s risk and context.

Oral Answer:

1. Sir, my response will also cover matters raised in the related oral Question Nos 2503 and 2508 as well as written Question No 1697, all filed by the Honourable Member Ms Sylvia Lim for a subsequent sitting. The Honourable Member may wish to withdraw her PQs if her queries are answered in today’s sitting. Sir, these questions pertain to the Financial Action Task Force (FATF) Mutual Evaluation Report of Singapore 2026, and span matters within the purview of the Ministries of Law, Finance, Home Affairs, and the Monetary Authority of Singapore. In the event that there are any Supplementary Questions that pertain to MOF, MHA and MAS, Sir, I seek your permission for such Supplementary Questions to be answered by the Ministers overseeing those Ministries and agencies.

2. Sir, the FATF is the global body that leads action to tackle risks associated with money laundering, terrorism financing and proliferation financing (ML/TF/PF). Members periodically undergo a peer assessment, known as a “Mutual Evaluation” or ME, of their level of compliance with the FATF Standards and effectiveness of their anti-money laundering, countering of terrorism financing and countering proliferation financing framework.

3. Singapore was one of the first countries and the first international financial centre assessed in this 5th round of the FATF MEs. As with other international financial centres, business and trading hubs, Singapore is inherently exposed to transnational ML/TF/PF risks, and is expected to maintain strong defences against them. Since the last round of MEs, higher standards have also been introduced by the FATF.

4. Against this context, Singapore performed credibly and achieved better overall results than we did in the 4th round. In recognition of this, the FATF has placed Singapore on regular follow-up, which is the category for countries that have been assessed to have performed well.

5. Every FATF ME report, for every country, identifies both strengths and recommendations for further enhancements. Where the FATF has made recommendations to strengthen certain aspects of our framework, the Government will carefully study them. We will develop action plans that are risk-proportionate and suited to Singapore’s context, ensuring that our financial and business ecosystem continues to grow in a trusted environment, and create good jobs for Singaporeans.

6. Let me now cover the four areas raised in the PQs.

On international cooperation

7. On international cooperation, the FATF found that Singapore provides timely, quality and constructive assistance to our foreign counterparts. Straightforward requests are executed in as little as 3 days, while complex requests are executed within an average of about 10 weeks. We note the feedback that some requests have taken a longer time to execute. This is often because further factual clarification is required or our legal requirements are not met.

8. We will continue to strengthen our cooperation with foreign counterparts, including better explaining our requirements for assistance. This covers cooperation channels and asset recovery as well.

On beneficial ownership transparency

9. Moving on to Beneficial Ownership. Regarding Beneficial Ownership (BO) transparency, the FATF does not prescribe a singular approach for BO transparency. Rather, each jurisdiction is expected to adopt measures appropriate to its own risks and context. The FATF then assesses whether a jurisdiction has an effective framework to ensure that accurate BO information is available to the competent authorities in a timely manner when needed.

10. Against this standard, the FATF acknowledged that Singapore has taken significant steps to prevent the misuse of legal persons and legal arrangements.

• First, we have a central BO registry for all companies and Limited Liability Partnerships (LLPs). They are required to verify the BO information periodically, while corporate service providers are also required to check on the BO of their clients as part of customer due diligence. The information is further validated through risk-based audits by ACRA.
• This is supplemented by the ownership information captured by public agencies. For instance, for landed residential properties, the Singapore Land Authority will conduct checks on the identity and citizenship of the ultimate beneficial owner. Thus, the identity of the ultimate beneficial owner of any trust, which seeks to purchase landed residential properties, will have to be disclosed to the Government.
• Second, AML/CFT-obligated entities such as banks are required to conduct customer due diligence checks when dealing with their customers, which include unregistered foreign companies and trusts. Checks include verifying BO information (including the ultimate beneficial owner) and reporting suspicious activities.
• Third, BO information obtained by AML/CFT obligated entities are readily available to law enforcement agencies in a timely manner.

11. These measures have enabled Singapore to establish an effective BO regime that supports investigations and enforcement. Nevertheless, we will carefully study the FATF’s recommendations and consider whether further enhancements will be needed to strengthen our framework while remaining appropriate for Singapore’s risk profile.

On financial penalties against financial institutions and virtual asset service providers

12. Let me now turn to the matter of financial penalties against financial institutions (FIs) and virtual asset service providers (VASPs). The FATF has acknowledged Singapore’s stepped-up sanctions against FIs and VASPs for AML/CFT purposes. For example, the maximum financial penalties imposed on FIs and VASPs increased from S$800,000 in the previous ME to S$5.8 million this round. Beyond financial penalties, we have taken other firm measures against FIs and VASPs, including the revocation of licences in egregious cases, and holding responsible individuals accountable for lapses. These actions are also published for deterrence and to increase industry awareness. MAS closely monitors the implementation and completion of FIs and VASPs’ remedial measures. Our overall approach is effective, and has led to positive behavioural changes in the industry such as stronger compliance culture amongst FIs and VASPs and improvements in AML/CFT controls. These improvements have been acknowledged by the FATF.

13. The FATF has recommended us to review the dissuasiveness and proportionality of our financial penalties. We will consider the recommendation, bearing in mind the specific details of each individual case, and the range of enforcement levers available.

On countering proliferation financing

14. Moving to countering proliferation financing. Countering proliferation financing and proliferation of weapons of mass destruction has been a key area of focus for Singapore. The FATF has found that Singapore has a robust countering proliferation financing legal framework, and strong coordination and cooperation among Singapore authorities. Singapore’s FIs such as banks and VASPs have a good understanding of their countering proliferation financing obligations and implemented risk-based mitigation measures.

15. The FATF has recommended a deepening of our proliferation financing (PF) risk understanding and strengthening the risk mitigation measures, particularly for the higher-risk sectors. We will continue to improve our risk understanding as PF risks change and evolve. We will also step up engagements with non-AML/CFT obligated entities to raise awareness.

Conclusion

16. In conclusion, Singapore has performed credibly in this latest round of MEs and has been placed in the same category as countries that have been assessed to have performed well. Where the FATF has made recommendations to strengthen certain aspects of our framework, the Government will carefully study them, and develop action plans that are risk-proportionate and suited to Singapore’s context.

17. Thank you.

Last updated on 7 July 2026