SINGAPORE: The massive leak of financial records dubbed Pandora Papers has "not raised significant concerns" over money laundering and terrorism financing by financial institutions in Singapore, Finance Minister Lawrence Wong told Parliament on Wednesday (Nov 3).
He was responding to questions by two Members of Parliament on whether the Monetary Authority of Singapore (MAS) is investigating the matter, after it was reported that Singapore-based firm Asiaciti Trust was named in the leaked papers.
According to the documents, Asiaciti Trust had helped at least 25 politicians set up and manage trusts and shell companies in secrecy jurisdictions.
"Based on MAS' assessment and information available thus far, the Pandora Papers have not raised significant concerns over the anti-money laundering and countering terrorism financing (AML/CFT) controls of our financial institutions," Mr Wong said.
"Nevertheless, MAS is engaging the relevant institutions to assess if tightening of controls are warranted."
Besides Asiacity Trust, Trident Trust Company Singapore was also mentioned in the Pandora Papers.
Both are foreign-incorporated trust companies with subsidiaries in Singapore. They are licensed and regulated by MAS, Mr Wong said.
Before the leak, the two companies had already been subject to supervisory and enforcement action in Singapore.
Asiacity Trust Singapore paid a S$1.1 million composition penalty in July last year for failing to implement AML/CFT policies and procedures. Trident Trust Company was in September last year directed to address weaknesses detected in its risk assessment controls.
The International Consortium of Investigative Journalists (ICIJ) first obtained the leaked documents and shared them with 150 media organisations to start a nearly two-year investigation. The findings were released on Oct 3.
While ICIJ has said it is not illegal to have assets offshore or to use shell companies to do business across national borders, such transactions "often amount to shifting profits from high-tax countries, where they are earned, to companies that exist only on paper in low-tax jurisdictions".
The ICIJ reported that 336 prominent individuals from around the world had established offshore structures to hold assets, assisted by 14 service providers operating in at least 38 jurisdictions.
Mr Wong said that MAS takes these disclosures "very seriously".
He acknowledged what while there were legitimate reasons to set up offshore structures, these structures often lack transparency and are thus vulnerable to abuse for illicit activities.
As such, MAS has clear requirements for financial institutions in Singapore to identify and verify the identities of people who are beneficial owners or effective controllers of their customer accounts.
Financial institutions must understand the reasons for the use of such structures, take measures to ascertain that the assets held in these structures are not illicit, as well as scrutinise any unusual transactions as part of ongoing monitoring of the account.
"MAS also supervises the financial institutions to ensure that their boards and managements have implemented robust controls against money laundering and terrorism financing," Mr Wong added.
"Where there are breaches of AML and CFT requirements, MAS has taken strong enforcement actions. In fact, both the licenced trust companies in Singapore mentioned in the Pandora Papers have already been subject to MAS' supervisory or enforcement actions."
Mr Wong said that Singapore, as a major financial centre, will always face the risk of illicit financial flows, but he stressed that the Government takes the integrity of its financial sector very seriously.
"What is important is that we supervise our financial institutions well, and take strong enforcement actions where necessary to reduce this risk as much as possible," he added.
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He was responding to questions by two Members of Parliament on whether the Monetary Authority of Singapore (MAS) is investigating the matter, after it was reported that Singapore-based firm Asiaciti Trust was named in the leaked papers.
According to the documents, Asiaciti Trust had helped at least 25 politicians set up and manage trusts and shell companies in secrecy jurisdictions.
"Based on MAS' assessment and information available thus far, the Pandora Papers have not raised significant concerns over the anti-money laundering and countering terrorism financing (AML/CFT) controls of our financial institutions," Mr Wong said.
"Nevertheless, MAS is engaging the relevant institutions to assess if tightening of controls are warranted."
Related:
Besides Asiacity Trust, Trident Trust Company Singapore was also mentioned in the Pandora Papers.
Both are foreign-incorporated trust companies with subsidiaries in Singapore. They are licensed and regulated by MAS, Mr Wong said.
Before the leak, the two companies had already been subject to supervisory and enforcement action in Singapore.
Asiacity Trust Singapore paid a S$1.1 million composition penalty in July last year for failing to implement AML/CFT policies and procedures. Trident Trust Company was in September last year directed to address weaknesses detected in its risk assessment controls.
The International Consortium of Investigative Journalists (ICIJ) first obtained the leaked documents and shared them with 150 media organisations to start a nearly two-year investigation. The findings were released on Oct 3.
While ICIJ has said it is not illegal to have assets offshore or to use shell companies to do business across national borders, such transactions "often amount to shifting profits from high-tax countries, where they are earned, to companies that exist only on paper in low-tax jurisdictions".
The ICIJ reported that 336 prominent individuals from around the world had established offshore structures to hold assets, assisted by 14 service providers operating in at least 38 jurisdictions.
Mr Wong said that MAS takes these disclosures "very seriously".
He acknowledged what while there were legitimate reasons to set up offshore structures, these structures often lack transparency and are thus vulnerable to abuse for illicit activities.
As such, MAS has clear requirements for financial institutions in Singapore to identify and verify the identities of people who are beneficial owners or effective controllers of their customer accounts.
Financial institutions must understand the reasons for the use of such structures, take measures to ascertain that the assets held in these structures are not illicit, as well as scrutinise any unusual transactions as part of ongoing monitoring of the account.
"MAS also supervises the financial institutions to ensure that their boards and managements have implemented robust controls against money laundering and terrorism financing," Mr Wong added.
"Where there are breaches of AML and CFT requirements, MAS has taken strong enforcement actions. In fact, both the licenced trust companies in Singapore mentioned in the Pandora Papers have already been subject to MAS' supervisory or enforcement actions."
Mr Wong said that Singapore, as a major financial centre, will always face the risk of illicit financial flows, but he stressed that the Government takes the integrity of its financial sector very seriously.
"What is important is that we supervise our financial institutions well, and take strong enforcement actions where necessary to reduce this risk as much as possible," he added.
Continue reading...