Speech by Mr. Louis Ng Kok Kwang, MP for Nee Soon GRC at the Second Reading of the Trustees (Amendment) Bill [Bill No. 12/2017]
As an international financial and trade hub, our doors are wide open – putting Singapore at risk of becoming part of the global transfer of illicit funds.
This was all the more evident when the 1MDB saga unfolded in 2016, implicating our private banks. Last year also saw the Indonesian amnesty on overseas funds which revealed that $72.4billion was sitting in private bank accounts on our shores.
As such, I welcome these amendments to the Trustees Act, bringing Singapore closer to international standards on measures to combat money laundering, terrorist financing and tax evasion.
I wholeheartedly support our nation taking up a more a constructive role to tackle key problems faced by the international community.
Ensuring Access Through Central Registry
Section 84A(2)(g) provides that we may impose up to $1,000 in fines for non-compliance with regulations. However, for individuals engaged in illicit activities such as money laundering and tax evasion, this would have little deterrent effect – in view of the broader financial gains they stand to reap. Will the Minister consider reviewing this?
To ensure that investigators will have ready access to the necessary information, has the Ministry considered the viability of setting up a central registry of all trusts that have connections to Singapore?
Currently, ACRA maintains basic ownership information of companies and LLPs. An equivalent body could be set up to record legal and beneficial ownership information for trusts. This has been done in France and South Africa.
This will speed up investigations by our local agencies and our responses to requests for information by foreign authorities. Authorities will also be able to avoid alerting suspected individuals when carrying out their investigations. Speed and secrecy is of the essence where monies can be easily moved with the push of a few buttons.
The legitimate concerns of confidentiality for those who use trusts to arrange their personal financial affairs may be addressed by limiting access to the registry to competent authorities.
Criminal Liabilities for Breach of Trustees Duties
Another area I would like to highlight is the lack of criminal sanctions for trustees who fail to discharge their duty of care under the Trustees Act.
In contrast, it is an offence for directors or officers of a company to breach their duties to use reasonable diligence under the Companies Act. Has the Minister considered whether equivalent criminal sanctions may be appropriate under the Trustees Act?
Adopting a National Strategy
While the Financial Action Task Force (FATF) has largely commended steps taken by Singapore to address anti-money laundering and terrorism financing, it also noted other areas of weaknesses.
For example, there are no strong sanctions when accountants fail to comply with money laundering and terrorism financing obligations.
Precious stones and metals dealers are still not yet subject to the full range of money laundering and terrorism financing requirements.
Are there plans to bring our legislative framework in line with the Financial Action Task Force recommendations in these other aspects?
Will the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) Steering Committee of the Ministry consider setting out a national strategy to ensure a coherent and coordinated approach across the board?
Conclusion – Success of Inter-Agency Cooperation
The 1MDB saga shook our private banking system last year. We sent a strong message against using our financial system for illegal purposes by closing down BSI and Falcon Bank, prosecuting senior officers, and levying heavy fines on other banks.
This is a success story showing what we can achieve when the public service functions as one. I would like to commend the AML/CFT Steering Committee that has the difficult task of coordinating the work of over 20 government agencies. The effectiveness of the whole-of-government approach we have taken when it comes to money laundering and terrorism financing is a model for inter-agency cooperation in all other aspects of the public service.
Madam, I stand in support of the Bill.