14 January, 2019
In November 2018, the Serious Crimes and Counter-Terrorism (Miscellaneous Amendments) Bill was read for the second time and passed by the Singapore Parliament. As a result, the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (“CDSA”) will be amended to enhance the framework for preventing money laundering, and to raise the maximum penalties for certain offences under the CDSA. Amendments to the Terrorism (Suppression of Financing) Act (“TSOFA”) will also be made to give effect to resolutions made by the United Nations, and to enhance the framework for combating terrorism financing.
The amendments to the CDSA and TSOFA are benchmarked against the practices of leading jurisdictions, such as Australia, United States, the United Kingdom and Hong Kong, and aim to conform to standards set by the Financial Action Task Force (“FATF”), of which Singapore is a member.
This update outlines the key amendments that will be made to the CDSA and TSOFA.
Amendments to strengthen deterrence
To strengthen deterrence, certain penalties under the CDSA and TSOFA will be enhanced as follows:
(a) the maximum penalty under the CDSA for money laundering committed by an entity will be increased from S$1 million to S$1 million or twice the value of the property involved, whichever is higher;
(b) the maximum penalty for failing to file a Suspicious Transaction Report under the CDSA will be increased from a fine of S$20,000 to a fine of S$250,000 and/or three years’ imprisonment if the offender is an individual, and to a fine of S$500,000 for corporations;
(c) the maximum fine for tipping off under the CDSA will be raised from S$30,000 to S$250,000;
(d) the maximum penalty for non-individuals who commit a terrorism financing offence under the TSOFA will be increased from S$1 million to S$1 million or twice the value of the property, financial service or financial transaction involved in the offence, whichever is higher;
(e) the maximum penalties under the TSOFA for failing to inform authorities about transactions relating to a terrorist’s property or whenever one controls or possesses such property, as well as for failing to disclose to authorities information which a person knows or believes might assist in preventing a terrorism financing offence or lead to the arrest, prosecution or conviction of another person for terrorism financing, will be increased and tiered into three categories with differentiated punishments, to reflect the differing culpability of groups that might commit such offences as follows:
(i) individuals who come across the property or information in the course of their work, such as bankers. For this group, the maximum fine will be raised from S$50,000 to S$250,000, while the maximum imprisonment term remains unchanged at five years;
(ii) corporations will face a maximum fine of S$1 million or twice the value of the property involved in or services rendered for terrorism financing, whichever is higher, up from a maximum fine of S$250,000; and
(iii) other individuals who are non-professionals. As this group is less culpable, the penalties are unchanged at the current maximum of S$50,000 fine and/or five years’ imprisonment.
(f) the maximum penalty for disclosing information that might compromise a terrorism financing investigation under the TSOFA will also be increased from a fine of S$30,000 and/or three years’ imprisonment to a fine of S$250,000 and/or five years’ imprisonment.
Amendments to combat organised syndicates
Under current laws, in order to secure a conviction, the prosecution must prove that money mules know the monies are linked to criminal conduct. However, this is challenging, as mules may be trained not to make admissions, to destroy or delete evidence, or to simply claim ignorance.
To combat this, a new section 47AA will be introduced in the CDSA, which will criminalise the possession or use by an accused, of property which would be suspected by a reasonable person of being benefits from criminal conduct, if the accused cannot satisfactorily explain how he came by the property. With this amendment, the courts will be able to decide, based on the circumstances of the case, whether the accused could be reasonably expected to suspect that monies are linked to criminal conduct. The maximum penalty for this new offence are a fine of S$150,000 and/or three years’ imprisonment for individuals.
Other amendments to the CDSA and TSOFA
Other amendments to the CDSA and TSOFA include:
(a) making it easier for the prosecution to show under the CDSA that an act committed in a foreign country constitutes drug dealing or criminal conduct.
Currently, prosecutors must not only prove that the overseas act amounts to a serious offence if committed in Singapore, they must also show that the overseas act amounts to an offence in the overseas jurisdiction. This requires prosecutors to obtain a certificate from the foreign government or a testimony from an expert in that foreign law to fulfil the burden of proof.
To address this difficulty, the amendment will allow the courts to decide on the basis of evidence presented by the prosecution that an offence has, indeed, been committed in the overseas jurisdiction, without having to rely on foreign governments or experts;
(b) giving the courts greater discretion to impose heavier penalties and raising the maximum composition amount for Cross Border Cash Reporting Regime (“CBCRR”) offences under the CDSA.
By way of background, a person is currently required to declare to the authorities any sum of monies brought into or out of Singapore exceeding the prescribed amount of S$20,000. Failure to make a report constitutes a CBCRR offence.
Amendments to the CDSA will empower the courts to make a confiscation order against a defendant convicted of a CBCRR offence on any sum beyond the prescribed amount. This means that for a person who is convicted of bringing S$100,000 into or out of Singapore without declaring it, the courts have the option to confiscate up to S$80,000.
For the less serious CBCRR cases, authorities will have the powers to compound in lieu of prosecution, and the maximum composition amount for an offence will be raised from S$5,000 to S$20,000;
(c) enhancing the sharing of financial intelligence with financial intelligence units of overseas jurisdictions.
In effect, the amendment will allow for the exchange of financial intelligence with more than 150 financial intelligence units from overseas jurisdictions which are members of the Egmont Group of Financial Intelligence Units, thereby tripling the size of Singapore’s network.
In this regard, Singapore authorities will be able to access more valuable information, while being assured that information shared in return is not abused, through the guidelines that the Egmont Group puts in place for its members;
(d) prohibiting under the TSOFA, the financing of overseas travel of an individual to any place to provide or receive any training in facilitating or carrying out any terrorist act, when one knows or has reasonable grounds to believe that the involved property or services are used to support the individual’s travel. This gives effect to Resolution 2178 (2014) of the Security Council of the United Nations and is also in line with FATF standards;
(e) making a person who abets, conspires or attempts to commit a terrorism financing offence under the TSOFA, liable to the same punishment as if the person had committed the offence under the applicable section; and
(f) protecting a person who acts reasonably in taking, or omitting to take, measures to avoid committing any terrorism financing offence under the TSOFA, from being liable in any civil proceedings arising from taking or omitting to take those measures. This is meant to give greater confidence to a person to do the right thing without fear of breaching contractual obligations.
