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23 January, 2017
Proposed changes to Singapore's Trustees Act aim to make the ownership and control of trusts more transparent, in an attempt to counter money laundering, the financing of terrorism and tax evasion.
The new laws would also allow the Law Minister to impose duties on trustees to obtain and maintain financial records and information on all parties relevant to and dealing with the trust, to identify specific groups of trusts that are exempt from the proposals and to impose a fine for any breach of the obligations.
The Ministry of Law has asked for feedback on the changes by 31 January.
"Singapore takes a tough stance on financial crime to maintain its reputation as a clean and trusted international financial centre, and has over the years invested substantial efforts to enhance its anti-money laundering and counter terrorism financing regime. They form part of Singapore’s whole-of-government ongoing review to ensure that corporate vehicles and trusts are not misused for improper purposes," the Ministry said.
Tax expert Valerie Wu of Pinsent Masons MPillay, the Singapore joint venture partner of Pinsent Masons, the law firm behind Out-Law.com, said: "The implementation of these new regulations is a strong move towards deterring tax evasion and significantly bolsters Singapore's image as a trusted and responsible financial centre. Financial institutions in Singapore should begin seeking independent advice regarding their characterisation and reporting obligations under the regulations and accordingly introduce systems to ensure these obligations are met".
The international Financial Action Task Force (FATF) said last month that Singapore has a strong legal and institutional anti-money laundering (AML) and counter-terrorist financing (CTF) framework in place but there are still gaps in its effectiveness, particularly in larger transnational cases.
MAS set up a dedicated AML department in August, along with a separate department to strengthen the enforcement of its regulations.
MAS already had a "robust regime" in place to counter the risk of Singapore's financial sector being used for money laundering and terrorist financing, but international finance is increasingly complex and there is a need for greater supervision, MAS said in June.
The dedicated AML department will look after all policies on money laundering and other illicit financing risks, MAS said. It will monitor risks and carry out on-site supervision of how financial institutions manage these risks.
For further information, please contact:
Ian Laing, Partner, Pinsent Masons
ian.laing@pinsentmasons.com
