The Financial Action Task Force (FATF) has removed Singapore from its enhanced follow-up list but the city-state’s beneficial-ownership safeguards, money-laundering prosecutions, and proliferation-financing controls are still falling short of the risks it faces as one of the world’s largest financial centers. 

In its long-awaited mutual evaluation report (MER) adopted at the FATF Plenary in February and released this week, the Paris-based intergovernmental organization rated Singapore as having “substantial” effectiveness in seven of its 11 effectiveness measures, including risk assessment, international cooperation, financial-sector supervision, and asset recovery. 

But the jurisdiction has “moderate” effectiveness—the second-lowest score in its effectiveness grading—when it comes to implementing FATF’s standards on transparency and beneficial ownership, money-laundering (ML) investigations and prosecutions, terrorist-financing preventive measures, and proliferation-financing (PF) sanctions, according to the report. None of the effectiveness measures were rated “high.”

The evaluation, jointly issued with the Asia/Pacific Group on Money Laundering, follows an on-site visit from July 1–18, 2025 and replaces Singapore’s last full FATF assessment in 2016. Based on its new findings, FATF said Singapore’s compliance would require only “regular follow-up,” a step down from the “enhanced follow-up” status it has complied with since 2016. 

Since the nation’s last evaluation, Singapore’s GDP has grown 73 percent to about $537.7 billion, and its assets under management have ballooned to roughly $4.5 trillion, 77 percent of which is sourced from other countries, FATF noted. Singapore has also emerged as one of the world’s largest hubs for digital payment token service providers, the local term for virtual asset service providers (VASPs). 

“Singapore’s ML and PF risks are disproportionate to its domestic crime environment,” the 300-plus-page report concluded, describing the country as a “passthrough/integration point for illicit flows” whose threat actors “generally sit outside of Singapore’s borders.”

FATF assessors repeatedly cite the 2023 “3B$ Case,” in which Singaporean authorities seized roughly SGD 3 billion tied to foreign remote-gambling proceeds. FATF described the case as “one of the world’s largest crackdowns on money laundering in 2023,” noting that it both showcased Singapore’s investigative capability and exposed how attractive the jurisdiction has become to large-scale foreign criminals. 

The report’s most pointed criticism centers on Singapore’s efforts to improve corporate transparency and identify beneficial ownership of businesses and other legal entities. Singapore was rated only “partially compliant” on FATF Recommendations 24 and 25, the two technical-compliance standards covering legal persons and legal arrangements.

FATF said the central beneficial-ownership registry maintained by the Accounting and Corporate Regulatory Authority (ACRA) relies almost entirely on corporate service providers conducting customer due diligence, with “limited mechanisms to ensure the information on the registry is accurate” beyond basic validation checks. Variable Capital Companies and Unregistered Foreign Companies are not captured at all in some cases, and trust transparency hinges on access through licensed trust companies whose supervisory coverage on ownership requirements “is low.” 

Recently increased penalties for related regulatory breaches “are not yet dissuasive,” FATF said. 

FATF separately found that Singapore opened more than 11,000 money-laundering investigations over five years, but 82 percent were triggered by victim complaints from cyber-enabled fraud and scams, the city-state’s top predicate offense. Of 7,594 cases referred for prosecution, fewer than 700 natural persons were ultimately prosecuted, a conversion rate below 10 percent, FATF found. 

While the conviction rate is a strong 82 percent, FATF noted convictions are “largely the result of guilty pleas” and most sanctions fall on low-level “money mules” rather than professional enablers, syndicates, or legal persons. “Penalties are low for ML, which undermines dissuasiveness,” the report said.

The watchdog also said Singapore makes roughly four times fewer mutual legal assistance requests than it receives, despite acknowledging its primary risks lie abroad, and uses formal cooperation channels modestly for tax crime, corruption, and trade-based money laundering.

Singapore is “one of the jurisdictions most vulnerable” to proliferation-financing threats due to its geography and its role as a maritime, trade, and virtual-asset hub, yet its mitigation efforts are “not proportional” to its risks, according to the report, which cited “relatively low” penalties for violations of related sanctions and export controls. The watchdog group separately criticized the city-state for delays in implementing targeted sanctions aimed at entities and individuals that fund terrorism. 

In the new evaluation, FATF credited Singapore with substantial gains since 2016 in inter-agency coordination, and with significant investment in data integration, automation, and financial-intelligence production by the Suspicious Transaction Reporting Office. The Monetary Authority of Singapore’s enforcement actions, especially against individuals, have also increased since the last evaluation, the report said.