Money Laundering is a cat and mouse game between law enforcement and criminals. As governments close loop-holes, criminals find other means to launder their funds and the game continues. In Asia, the precious stones metals industry is somewhat less regulated relative to the US and Europe. Singapore understands this industry’s potential for exploitation and are now taking actions to close the gap according to The Business Times:
Dealers already have to abide by a cash transaction reporting regime that mandates customer due diligence for cash deals of S$20,000 or more, under existing rules to crack down on corruption, drug trafficking and other serious crimes.
But the Law Ministry noted in a statement that the precious stones and metals dealership industry is not governed now by the same range of anti-money laundering and countering the financing of terrorism obligations as the financial sector or designated non-financial sectors such as pawnbroking. The new regulatory regime “will close this gap”, it added.
“Precious stones and metals are portable, valuable and easily convertible to cash,” the ministry said. “This exposes the (precious stones and metals dealers) sector to inherent money laundering and terrorism financing risks.”
Dealers of precious stones and metals in Singapore could soon have to register with the Ministry of Law. Hong Kong should take note as they currently only have guidelines for the precious stones and metal industry which leaves the market open to exploitation. With the introduction of Currency Cross-Boarder Controls in Hong Kong, it is inevitable criminals will turn to other means such as the jewellery industry to bypass currency control measures in place at all Hong Kong ports. If Hong Kong continues to be too lax and procrastinate in this regard, they will only have themselves to blame as money laundering cases implicating the territory continue to mount.