Response by Minister for Manpower Dr Tan See Leng to Clarifications on Anti-Money Laundering Case

1. Mr Speaker, I thank the honourable members for raising questions on the role of MOM in tackling anti-money laundering risks.

   
   MOM’s role in the overall system of checks against money laundering

2. MOM’s work pass framework is intended to support Singapore’s economic growth.
   1. It enables companies to bring in foreigners who are complementary to our local workforce, spurring new investments and growth in areas like the digital economy and green economy.
   2. This will help us to transform our economy and to seize new opportunities, even amidst the uncertain global economic environment and geopolitical challenges. This will ultimately create more good jobs for Singaporeans.
3. MOM conducts checks to ensure that our work pass framework is not circumvented. In particular, we check:
   1. Whether there is false declaration of salaries and qualifications; and
   2. Whether companies have business operations to cover the declared salaries of workers.
4. Some individuals may abuse the work pass framework to enter Singapore to commit illicit activities, such as the present case of money laundering. Some may pretend to be employed by companies that are actually inactive or dormant. But others may operate companies with an active trading front to mask the movement of their ill-gotten gains. Yet others, still, may own a portfolio of legitimate and illicit businesses. Criminals will constantly find new ways to circumvent our laws and regulations and update their methods over time, making the task of detection even more complex.
5. MOM’s salary fraud checks should be seen as a first layer of checks to detect companies that do not have business operations to cover the declared salaries of workers.
   1. This first layer of checks is part of a larger Whole-of-Government system of checks to safeguard against money laundering risks.
   2. And we will need to continue to coordinate with the rest of Government to uncover increasingly complex money laundering operations.
6. Let me explain in greater detail how MOM conducts salary fraud checks and our role in Whole-of-Government efforts to manage money laundering risks.

   
   MOM continuously sharpens our checks

7. First, on fraud checks. MOM uses data analytics to identify higher-risk work pass applications for greater scrutiny.
   1. Where there is any sign of possible salary fraud, companies are required to show documentary proof of business operations and their ability to pay salaries.
   2. We may also carry out checks after the work passes have been issued. Companies may be subject to further audits or asked for further proof after the work pass holder arrives in Singapore or subsequently at point of renewal.
   3. MOM also responds to whistleblower reports to investigate whether companies have on-going business operations.
8. We continuously sharpen our checks to better identify such fraudulent applications.
   1. For instance, we regularly update our data analytics with concluded fraud cases and enforcement findings so that they can more accurately pin-point and flag out applications that are potentially fraudulent.
   2. We conduct audits to detect breaches, and to validate and strengthen our analytics. Our enforcement teams are also trained to detect various forms of salary fraud.
9. Specific to the recent money laundering incident, the Employment Pass applications were approved because they met the then prevailing work pass requirements on salary and qualifications.
   1. When asked for proof of business operations and the ability to pay salaries, the companies which submitted the applications were able to provide supporting documents.
   2. In addition, as Minister Josephine Teo explained in her Ministerial Statement earlier, work pass applicants are screened against a database of blacklisted individuals.
   3. At the time of their Employment Pass applications, none of the Persons of Interest had INTERPOL’s Red Notices issued against them.
10. MOM will continue to sharpen our fraud checks based on real cases on the ground. Learning from the profiles of companies and individuals involved in the money laundering incident, we will update our data analytics with high-risk archetypes and strengthen our checks on whether businesses are operational.
11. However, I want to emphasise that the majority of work pass holders come to Singapore to work and contribute to our economy.
    1. Only a small minority are unscrupulous individuals.
    2. We must take a sensible approach to calibrating our checks so that we do not hurt bona fide employers.

    
    MOM’s role in Whole-of-Government efforts to manage money laundering risks

12. Second, on MOM’s role in Whole-of-Government efforts to manage money laundering risks and Mr Desmond Choo’s question on how we will improve checks to better do so.
13. Across the Government, we will review how to tighten our verification checks at various points. Minister Indranee shared in her speech that she will be leading an Inter-Ministerial Committee to ensure that our regime remains up-to-date with increasingly sophisticated crimes.
14. MOM will be part of the Committee and support its efforts.
    1. With better sharing of information across agencies, MOM can improve our salary fraud checks and share salary fraud cases with other agencies to conduct further probes on whether the relevant individuals are also involved in illicit activities.
    2. MOM will continue to take enforcement action on work pass applicants, pass holders, and companies who have been found to be involved in illicit activities.

    
    Conclusion

15. Our work pass framework is part of a broader system that is working as a whole to prevent unscrupulous individuals from entering Singapore on the pretext of employment, though we can and will review how to tighten our checks at various points.
16. We will need to take a balanced approach in reviewing our checks.
    1. In 2Q 2023, Singapore is ranked the world’s best business environment by the Economist Intelligence Unit.
    2. This strong performance is in line with many other global rankings on economic competitiveness.
    3. Singapore is known to companies as a welcoming place to do business in, and access to both local and global talent is an important factor that they consider. This is a hard-earned reputation that has taken us years to achieve.
    4. As I said earlier, the vast majority of work pass holders come to Singapore to work and contribute to our economy.
    5. We should not let a handful of individuals or black sheep taint the economic contributions of the majority; and start closing our doors or giving the impression we are doing so.
17. In fact, this is exactly why we need to be targeted in strengthening our checks, so that we can take action on unscrupulous individuals and companies, while maintaining a business-friendly environment for the majority that want to invest in Singapore and create good jobs for Singaporeans.
18. Thank you.