Mr Louis Ng Kok Kwang: Madam, this Bill will establish the COSMIC digital platform for financial institutions to share information about their customers whose information contains red flags relating to economic crime. This makes it harder for criminals to use transfers across multiple financial institutions to avoid detection.
Despite the difficult economic climate, I am glad that Singapore remains an attractive financial centre, with increased fund inflows from an increase in the number of family offices from 400 in 2020 to over 700. As our transactions and assets increase, our ability to supervise these transactions must also improve.
I support this Bill as this will let us take the lead in detecting and preventing financial crime, strengthening Singapore’s position as a major financial hub.
I have three points to make.
My first point is on using COSMIC to tackle illegal wildlife trade. In my speech on the Endangered Species (Import and Export) (Amendment) Bill, I highlighted how there is evidence suggesting that Singapore is a critical nexus in the illegal wildlife trade.
In the past decade, we have seized illegal shipments of animal parts worth hundreds of millions of dollars. Elephants, rhinoceroses, pangolins – these are just a few animals whose dead, dissected bodies are smuggled through Singapore. In April 2019, we broke the record by finding 12.9 tonnes of pangolin scales being smuggled in a shipment from Nigeria. This was worth over $50 million and cost the lives of over 17,000 pangolins. Just a week later, we seized another 12.7 tonnes of pangolin scales. Three months after that, we seized a shipment of 8.8 tonnes of ivory, estimated to come from nearly 300 African elephants. In October 2020, NParks seized 34 kilograms of rhinoceros horns from a man travelling from South Africa to Laos through Singapore. This is the largest seizure of rhinoceros horns to-date.
Such seizures are just the tip of the iceberg. Smugglers have found ways to circumvent our border security and bring these animals and their body parts onto our soil.
When you look at the size and value of animal part seizures at our borders, we are talking about operations that must, by logic, involve financing, coordinating and operations on a large, organised scale. A $50 million shipment of pangolin scales is not the work of isolated individuals. These criminals have the know-how to avoid and evade detection through complicated transactions. This is why we need a platform like this.
As MAS develops this platform, will MAS consider including in the scope of the red flags identified to those associated with wildlife crime? Will MAS also work with investigators of wildlife crime to ensure COSMIC data is used to both identify perpetrators as well as help banks do so?
By making this data available for stakeholders tackling wildlife crime, our financial sector will be able to play an important part in battling this illegal wildlife trade.
The Financial Action Task Force (FATF) has flagged the illegal wildlife trade as a major transnational organised crime. It is a perfect candidate for the powers under this Bill and I hope MAS will take this into consideration as we develop this platform further.
My second point is about the policing of privacy regulations. This legislation does a good job balancing the goal of reducing economic crime with the concern of privacy. Banks obtaining information via COSMIC will only be able to share it in certain circumstances with a limited set of people, even within their own organisation. Cybersecurity measures must also be in place to protect the information.
But how will MAS ensure that banks hold themselves up to these standards? If a bank officer forwards it to a colleague who should not have access to the information, how will MAS find out? Will there be data audits to track the flow of COSMIC information within and out of banks? Information obtained from COSMIC will be highly sensitive and improper circulation may have serious implications for those targeted. MAS must ensure banks protect the information properly.
My third and final point is on how COSMIC data will be processed. Having aggregated data from multiple financial institutions like this is a valuable resource with great potential. MAS has stated that the SRTO will have access to data from COSMIC for its analysis. Can the Minister clarify whether there are further plans to provide other Government agencies or financial institutions access to the COSMIC data?
On one hand, this data could be mined to gain valuable insights about suspicious activity. This could even be shared internationally to strengthen enforcement globally. On the other hand, the processing of such data must be carefully governed. It must not be done in a way that might breach confidentiality. It should not be analysed by banks for commercial business purposes.
Since this relates to allegations of criminal conduct, machine learning or artificial intelligence models analysing the data must also be carefully managed to avoid any bias. If there are plans to share COSMIC data with other entities, can the Minister share what safeguards are in place? Madam, notwithstanding these clarifications, I stand in support of the Bill.
Watch the speech here.