05/10/23

REGULATION: Singapore to set up inter-ministerial panel, review measures to boost anti-money laundering controls

As published on: regulationasia.com, Thursday 5 October, 2023.

SINGAPORE will form an inter-ministerial committee to consider further measures to strengthen its anti-money laundering regime.

The committee will be led by Second Minister for Finance Indranee Rajah, and involve “relevant sectoral regulators”, Second Minister for Home Affairs Josephine Teo said on Tuesday (Oct 3) in Parliament.

She was delivering one of three ministerial statements aimed at addressing several parliamentary questions regarding Singapore’s largest money laundering probe. Some 57 questions were raised by 30 Members of Parliament over the last two Parliament sittings, said Speaker of Parliament Seah Kian Peng.

Indranee said in her statement that the inter-ministerial committee will focus on four main areas:

• How Singapore can better prevent corporate structures from being abused by money launderers;
• How financial institutions can enhance their controls and collaborate more effectively to guard against and flag suspicious transactions;
• How other players such as real estate agents can help to better guard against money laundering risk;
• And how Singapore can centralise and strengthen monitoring and sense-making capabilities across government agencies to better detect suspicious activities.

Teo said the government will also look into tightening verification checks at various points in the immigration process, although she cautioned that new measures required moderation.

Unregulated high-value assets

She also said the government will examine whether it needs to extend its anti-money laundering (AML) requirements to cover assets beyond what the Financial Action Task Force (FATF) has recommended. These include high-value assets such as luxury cars, bags, liquor and ornaments, which are currently unregulated.

Singapore’s AML requirements comply with international standards set by FATF and cover both financial and non-financial institutions, including dealers of precious metals and precious stones, Teo noted.

Single family offices

In his ministerial statement, Tan said Singapore will review its internal incentive administration processes for single family offices (SFOs) that are applying for tax incentives in the Republic, and will “tighten them where necessary”.

This comes as one or more of the accused persons in the money-laundering probe may have been linked to SFOs that were awarded tax incentives, he said.

At the point of application for the tax incentives, no adverse information of note related to these individuals and entities had surfaced.

The Monetary Authority of Singapore (MAS) had in July announced plans to strengthen AML controls in the SFO sector by streamlining tax exemptions and linking them with AML requirements.

The changes came shortly after MAS announced several adjustments to its tax incentive scheme for SFOs in Singapore, to encourage them to invest more in the Republic.

Information sharing

Tan said that the platform called Cosmic, short for Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases, is on track to be launched in the second half of 2024, if not earlier.

MAS will permit participant financial institutions to share information from Cosmic with its local and overseas affiliates, provided conditions to ensure confidentiality are met, Tan said.

There are no plans to extend Cosmic to entities beyond the financial sector, however, or for Cosmic information to be shared with financial institutions overseas, or with international counterparts, he added.

Real estate

In the third and final ministerial statement, Indranee noted that the Council for Estate Agencies (CEA) is developing a one-stop resource webpage to make it easier for the industry to retrieve information on AML requirements.

Later, in her reply to supplementary questions on strengthening AML controls for Singapore’s non-financial sector, she said “we can do better” in regulating gatekeepers, which include lawyers, accountants and real estate agents. This will be an area of focus for the inter-ministerial committee, she said.

Penalties for service providers and restrictions on directors

The Accounting and Corporate Regulatory Authority (Acra) plans to table several proposals in Parliament in early 2024 to strengthen Singapore’s AML regime, Indranee said.

These include enhancing the penalties on errant corporate service providers, and possibly putting restrictions on directorships, such as limiting the number of nominee directorships one can hold, she added.

She noted that proposals for both the additional measures for errant service providers and restrictions on directorships had been put out for public consultation in 2022.

Charities

In her statement, Teo also noted that some of the arrested individuals have made donations to charities in Singapore.

Some of these charities have decided on their own to ringfence these donations; others have made police reports and plan to surrender the monies to the police, she said.

She said the Commissioner of Charities will issue an advisory to encourage all charities to review their donor records, to ascertain whether they have received donations from the arrested individuals and linked entities, and file the requisite suspicious-transaction reports.

The advisory will also include advice to charities on how to handle the monies, she informed.

Responding to supplementary questions on deeper involvement of stakeholders in AML controls, Teo said that measures taken by Singapore “obviously (have) to intensify”, even as sector regulators have already been engaging with gatekeepers regularly.

But she explained that the key lies in making sense of data, instead of just imposing reporting requirements.

She added: “Each time we have a big bust like (the S$2.8 billion case), it also offers us fresh insights as to the kind of signals we should be paying greater attention to.”

Tags

Regulation AML Anti-Money Laundering Singapore