Since 8 February 2024, a company director can commit a money laundering offence in Singapore without knowing that the money was criminal. The Ministry of Home Affairs explained that it is an offence to act rashly by carrying out a transaction for someone else while having some suspicion that the property could be criminal benefits, without making further enquiries. It is also an offence to act negligently by continuing with a transaction despite obvious red flags that any reasonable person would notice. MHA said expressly that this applies to persons acting as directors of companies and operating corporate accounts. Rash money laundering carries a fine of up to S$250,000, up to five years’ imprisonment, or both; negligent money laundering a fine of up to S$150,000, up to three years, or both.
The time to deal with a suspicious payment is before you move it on. If money has arrived that you cannot explain, or a customer wants it refunded or forwarded somewhere unusual, stop. Do not transfer it until you have made proper enquiries and taken advice. Once the money has gone, the questions turn to why you sent it.
What changed in 2024
MHA announced the commencement of the amendments to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) and the Computer Misuse Act on 8 February 2024. Before then, the main money laundering offences required knowledge or reasonable grounds to believe the property was criminal. The new offences lower the bar for people who handle other people’s money:
| Offence | What it covers (MHA’s description) | Maximum penalty |
|---|---|---|
| Rash money laundering | Carrying out a transaction for someone else while having some suspicion it could involve benefits of crime, without making further enquiries | Fine of S$250,000, 5 years’ imprisonment, or both |
| Negligent money laundering | Continuing with a transaction despite obvious red flags that any reasonable person would notice | Fine of S$150,000, 3 years’ imprisonment, or both |
| Assisting another to retain criminal benefits in certain circumstances | For example, letting others use your payment account, or moving money without reasonable steps to find out its source, destination or the other party’s identity and location | Fine of S$50,000, 3 years’ imprisonment, or both |
MHA also said that owners and operators of payment accounts, including corporate bank accounts, will be held accountable for transactions through their accounts, and must check the other party’s identity and understand where the money comes from and goes to.
How companies get caught
Most directors charged in this area did not set out to launder money. The pattern is usually a payment that looked like business. Situations that should prompt questions include:
- Overpayment and refund requests. A new customer pays more than the invoice and asks for the difference to be refunded, often to a different account.
- Third-party payers. Money arrives from a person or company with no connection to the customer, or from overseas accounts for a local sale.
- Receive and forward. A “partner”, investor or overseas contact asks the company to receive funds and pass them on, for a fee.
- Trading with no trade. Large sums move through the account but the company has little stock, staff or delivery records.
- Digital token purchases. Fiat payments from strangers to buy cryptocurrency, with no checks on where the money came from.
Two police cases show what this can look like. In December 2025, police announced charges against a former director whose company’s account at a payment provider received about GBP 1.4 million from overseas accounts in a few weeks. The money was used to buy cryptocurrency, and police said he did not try to establish its source; at least GBP 75,050 was later established to be scam proceeds. In July 2025, the sole director and signatory of two foreign companies with Singapore accounts was charged over millions of dollars received and transferred onwards, part of it allegedly scam proceeds he could not satisfactorily explain. Both are charges, not convictions.
What reasonable enquiries look like
- Know who is paying you, and why that person rather than the customer.
- Match money to documents: contract, purchase order, invoice, delivery. No documents, no transfer onwards.
- Refund only to the account that paid, and only after confirming the payment has cleared and is genuine.
- Write down what you checked and why you were satisfied, at the time.
- Ask the bank if a receipt looks wrong. Banks can sometimes help trace or return a payment.
- Adopt a written policy on third-party payments, refunds and changes of bank details, approved by the board.
If you already have doubtful money in the account
- Do not send it on, refund it to a different account, or withdraw it.
- Preserve messages, invoices and instructions.
- Take legal advice promptly on reporting. Anyone who suspects that property is linked to crime should consider making a suspicious transaction report to the Suspicious Transaction Reporting Office, and a lawyer can advise on the company’s position.
- Expect the bank or the police to ask questions, and answer truthfully. If funds are frozen, see company bank account frozen by the police.
Frequently asked questions
Is there a defence if we genuinely did not know?
For the offence of assisting another to retain criminal benefits, MHA said a person is not liable if he can prove he did not know and had no reason to believe the property was criminal proceeds. The rash and negligent offences focus on whether the suspicion or red flags were acted on. Whether any defence applies is a question for your lawyer.
Does this apply to nominee directors?
Yes. A nominee director who operates the company’s account, or lets someone else operate it without understanding the transactions, is exposed. See lending the company account or Singpass.
Is receiving money for an overseas group company a problem?
It can be, both under these offences and under the Payment Services Act if it amounts to providing a payment service. See unlicensed payment services.
See also AML compliance for Singapore companies, and more on the company law hub.
Worried about money that passed through your company’s account?
If your company, or you as a director or shareholder, has received or forwarded money you now have doubts about, or the bank or police are asking questions, contact the Raffles Corporate Services team at [email protected] or on WhatsApp at +65 8501 7133 or +65 9018 0072. We will help you trace the transactions in the books, assemble the supporting documents, and put payment controls in place. Where your matter needs a lawyer, and it usually will, we will refer you to a firm on our panel of Singapore law firms that regularly handles money laundering investigations. Raffles Corporate Services is a corporate services provider, not a law firm, and this article is general information, not legal advice.
Willie Tan, Raffles Corporate Services