The slow return of high-spending Chinese tourists is resulting in an uneven recover of the market, while a money laundering case could impact the sector.
sector sees a global slowdown, Singapore, one of its key markets, is being impacted by the slow return of Chinese tourism.
Singapore authorities have started sentencing 10 Chinese nationals in the 3 billion Singapore dollar, or $2.2 billion, money laundering case. Multiple locations across the county were raided in August 2023 by local police to arrest the accused for allegedly laundering proceeds from overseas criminal activities.
The revelation of such high-end luxury purchases in the money laundering case shined a spotlight on luxury spending in the city state and led to concerns that the under-regulation of luxury goods could be exploited to launder money. Singapore is tentatively due to have its anti-money laundering practices evaluated in 2025 by the Financial Action Task Force, an intergovernmental organization.
The FATF Recommendations are a set of international standards, which the organization suggests countries should implement through measures adapted to their particular circumstances. Teo stated, “We will examine if Singapore needs to extend anti-money laundering requirements to new classes of assets, beyond what FATF has recommended. This has to be evaluated carefully so that we do not end up unduly inconveniencing legitimate businesses and customers.
Still, any impact from the money laundering case on luxury spending is likely to only pause, not stall, overall spending, observers believe. “The accused persons do not represent the entire watch buying or selling community. It’s hard for people with illegal money to even spend it at shops like ours. Many shops do not take cash nowadays. Only bank wire payments. And perhaps the sellers didn’t conduct their due diligence to a reasonable extent,” Lim said.
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