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The Finance and Home Affairs Ministries and the Monetary Authority of Singapore (MAS) followed the Financial Action Task Force’s 2013 publication “Guidance on National Money Laundering and Terrorist Financing Risk Assessment” with a government-wide assessment of money laundering and terrorist financing risks within Singapore. Their joint 2013 assessment (the “Singapore National Money Laundering and Terrorist Financing Risk Assessment Report”) identified gaps for improvement, which has resulted in these recently issued amending Bills and MAS proposals:

  •  Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) (Amendment) Bill;
  • Mutual Assistance in Criminal Matters Bill;
  • MAS  Consultation  Paper  P005  –  2014  “Obligations  of  Financial Institutions under the Personal Data Protection Act 2012 – Amendments to Notices on Prevention of Money Laundering and Countering the Financing of Terrorism”; and
  • MAS Consultation Paper P007 – 2014 “Proposed Amendments To The Monetary Authority Of Singapore Act And Trust Companies Act”.

Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) (Amendment) Bill

Introduced in Parliament on 28 May 2014, the Bill looks to:

  • align  the  Corruption,  Drug  Trafficking  and  Other  Serious  Crimes (Confiscation of Benefits) Act (CDSA) with the 2013 changes to the Terrorism (Suppression of Financing) Act (TSOFA);
  • enhance detection and prosecution of  money-laundering offences; and
  • facilitate   information   sharing   with   foreign   financial   intelligence agencies.

The  Bill  has  not  yet  come  into  effect,  but  when  in  force,  the  proposed amendments will:

  • increase the maximum term of imprisonment from 7 to 10 years, consistent with TSOFA;
  • facilitate effective prosecution by removing the current requirement for law  enforcement  agencies  to  obtain  a  certificate  from  a  foreign country to establish a foreign predicate offence;
  • apply the concept of “dual criminality” to allow prosecution of money laundering cases involve foreign tax  evasion offences which may differ from Singapore’s tax laws;
  • expand confiscation of  criminal benefits to include property of  an equivalent value belonging to the offender or its syndicate where the offender dissipates these benefits;
  • adopt FATF definitions of Suspicious Transaction Reporting Office (STRO) and its responsibilities and empowering the STRO to obtain relevant information required for analysis and to share information with foreign financial intelligence units; and
  • require dealers in precious stones and metal to conduct customer due
  • diligence and file a report with the STRO when the cash value of the transaction is equal to or exceeds the threshold quantum used in cross-border cash movement reports.

Mutual Assistance in Criminal Matters Bill

The amendments introduced in Parliament on the 29 May 2014 will:

  • sharpen  definitions  in  the  current  Mutual  Assistance  in  Criminal Matters Act (MACMA) to align the MACMA with amendments to the CDSA; and
  • expand the recognised prohibitions and offences for which Singapore can comply with a request for assistance.

When in force, the substantial changes will include:

  • removing the s 2(1) evidentiary requirement for a certificate from the foreign government requesting assistance before the foreign law can be regarded as a corresponding drug law and allowing other forms of evidence to prove the foreign drug offence, and extending the concept of “foreign drug offence” to include state-level as well as federal offences;
  • broadening the scope of the MACMA by recognising a new “foreign tax evasion offence”, defined as an offence against the national law ofa foreign country through wilful intent to evade, or to assist any other person to evade, any tax of that country, which recognises differences between Singapore’s tax regime and other jurisdictions;
  • replacing the s 20(1)(f) general requirement for dual criminality with a new limited s 20(3) requirement so that dual criminality will only be required in foreign requests relating to obtaining evidence, enforcing foreign  confiscation  and  search  and  seizure  but  not  to  requests relating to the new “foreign tax evasion offence”;
  • using the same definitions for “financial institution” and “Singapore confiscation order” as the MAS Act and CDSA and introducing a new definition of “foreign offence” to expand Singapore’s assistance to include any offence under a foreign country’s laws; and
  • replacing the current restrictive list of offences in the First and Second CDSA Schedules for which assistance is available under the MACMA with  new  MACMA  schedules  of  offences  (which  will  also  allow different lists of offences to be maintained under MACMA and CDSA).

Obligations of Financial Institutions under the Personal Data Protection Act

MAS, in its Notices on Prevention of Money Laundering and Countering the Financing of Terrorism (AML/CFT Notices), set out the requirements and standards expected of financial institutions in complying with their AML/CFT obligations. In this recent consultation paper MAS proposed amendments to its prior AML/CFT Notices to:

  • take into account new data protection rules under the Personal Data Protection Act (PDPA) which came into force on 2 July 2014; and
  • ensure that Singapore’s laws protecting the privacy of customers’ personal financial information are not also used to shield criminal activities.

On 1 July 2014, MAS issued amending notices to give effect these proposals in the various AML/CFT Notices to money changers, remittance businesses, banks, financial advisers, capital market intermediaries and life insurers. From that date, these financial institutions are allowed to:

  • adjust  their  processes  to  comply  with  the  PDPA  rules  without compromising effective customer due diligence: and
  • collect, use, and disclose personal data without customer consent, as per existing practice, to meet AML and CFT requirements.

Customers exercising PDPA rights are allowed access to all personal and factual identification data they have provided and may request errors be corrected. However, a financial institution is not be required to provide an individual customer with:

  • any  access  to  personal  data  about  the  individual  that  is  in  the possession or under the control of the financial institution;
  • any information about the ways in which that personal data of the individual in the possession or under the control of the financial institution has been or may have been used or disclosed by the financial institution; and
  • any right to correct an error or omission of the personal data about the individual that is in the possession of or under the control of the financial institution.

Amendments to The Monetary Authority Of Singapore Act and Trust Companies Act

MAS has released draft bills to amend the MAS Act and the Trust Companies Act in its consultation paper seeking comments on these proposed amendments by 7 July 2014. The MAS Act amendments (and consequential related amendments to the Financial Advisers Act, Securities and Futures Act and other legislation) will extend MAS’ powers in the following areas:

  • add to MAS’s existing powers to issue AML and CTF Notices, the new s 27B(1A) will also allow MAS to require financial institutions to conduct customer due diligence (CDD) and keep proper records, with penalties for non-compliance. MAS will also amend the current AML and CFT Notices to reflect detailed CDD measures , for which MAS will hold industry consultations;
  • broaden MAS’ powers to obtain and exchange supervisory information with a substantial new part (comprising ss 30X, 30Y, 30Z, 30ZA to 30ZF) allowing MAS to share AML and CFT information (including information protected by banking secrecy and other laws) with other Singapore agencies as well as with foreign counterpart authorities at their request if MAS deems that these agencies and authorities have a bona fide case and MAS receives their undertakings to:
    • use the shared information only for the purpose specified in their request; and
    • protect the confidentiality of the shared information;
  • expand the 27A(6) definition of “financial institution” to include designated financial holding companies and bringing into operation the Financial Holding Companies Act, enacted April 2013 so that non- operating companies which are also holding companies of subsidiaries, banks or insurance companies in Singapore will fall under MAS’ regulatory powers and will be added to the class offinancial institutions to which MAS can issue directions

The proposed Trust Companies Act amendments will extend the scope of supervision and inspection of a trusts company and its related entities:

  • a new s 2 definition of “subsidiary” which adopts the s 5 Companies Act definition will allow onsite inspections by foreign authorities to include subsidiaries of trust companies as well as branches;
  • an amended s 47 and new item 8 in the Third Schedule will enable authorities supervising the parent company of a trust company to also ask for the records of the trust company for a consolidated, cross- border perspective of that trust company; and
  • s 47(1) expands MAS’ powers of inspection to include “licensed trust company that is incorporated, formed or established outside Singapore or a foreign-owned licensed trust company incorporated in Singapore”.

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