SINGAPORE is proposing to raise the maximum fine against money laundering and terrorism financing by 10 times to S$1 million (US$660,000), second finance minister Tharman Shanmugaratnam said on Wednesday.

He noted the proposed tightening in the anti-money laundering and terrorism financing law was necessary to fight the rise in terrorism activities around the world.

Singapore, which is trying to become a key private banking and asset management centre in Asia, was listed by the US State Department in 2004 as a centre of 'primary concern' for money laundering.

Money laundering is the processing of cash or other property derived from criminal activity to disguise its illegal origin.

Under the proposed changes to the law, financial institutions, as well as their directors and senior management officials found to have shown 'consent, connivance or neglect' would be held culpable, Mr Tharman said.

'The rise in terrorism activity around the world makes it even more imperative that governments take effort to suppress terrorism financing,' he pointed out in parliament.

Singapore is the world's fourth-biggest foreign exchange centre and its asset management industry oversees about S$720 billion in funds. -- REUTERS