Reply to Parliamentary Questions on Pandora Papers
QUESTION NO 1920, 1923, 2003, 1937
NOTICE PAPER 768, 774, 813, 794 OF 2021
FOR ORAL ANSWER
Date: For Parliament Sitting on 3 November 2021
Dr Lim Wee Kiak, MP, Sembawang GRC: To ask the Prime Minister in light of the disclosures in the Pandora Papers (a) whether MAS will be looking into the Singapore-based financial institutions and Singaporeans/foreigners who are implicated in the report; (b) whether any individual or financial institution will be asked to issue a clarification as to their activities disclosed in the report; and (c) how does MAS ensure that offshore wealth management services in Singapore remain lawful and legitimate by international standards.
Mr Patrick Tay Teck Guan, MP, Pioneer SMC: To ask the Prime Minister (a) whether Singapore is implicated in the Pandora Papers; and (b) whether the Government is investigating whether Singapore entities or individuals residing in Singapore are involved in the alleged practices.
Miss Cheryl Chan Wei Ling, MP, East Coast GRC: To ask the Prime Minister in light of the Pandora Papers leaks (a) whether the current regulations are sufficient to monitor or uncover any illicit activities of offshore financial service providers with offices registered in Singapore; (b) whether more stringent compliances are imposed on companies that violate the regulations; and (c) whether there will be a requirement for them to be repeatedly audited by independent parties for a defined period.
Mr Murali Pillai, MP, Bukit Batok SMC: To ask the Prime Minister following the leak of the Pandora Papers into the public domain, what steps will MAS take to satisfy itself that Singapore-based professionals, trust companies and financial institutions charged with the responsibility of conducting the requisite due diligence checks under Singapore’s frameworks to prevent money laundering, terrorist financing and tax evasion are discharging their duties as required so as to preserve Singapore’s good reputation as a trusted and responsible financial hub.
Answer by Mr Lawrence Wong, Deputy Chairman of MAS and Minister for Finance, on behalf of Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:
1 Mr Speaker, Sir, may I have your permission to answer all the Parliamentary Questions (PQs) related to the recent disclosure by the International Consortium of Investigative Journalists (ICIJ)
(a) Oral PQs from Dr Lim Wee Kiak and Mr Patrick Tay filed for today’s Sitting;
(b) Written PQ from Miss Cheryl Chan Wei Ling filed for today’s Sitting;
(c) Oral PQ from Mr Murali Pillai filed for yesterday’s Sitting.
2 As a global financial centre, Singapore intermediates a large volume of fund flows for investment or commercial purposes, and also provides services in financial asset management. While the vast majority of these activities are carried out by law-abiding individuals and companies, we are constantly on guard against the risk of illicit financing activities.
3 The Monetary Authority of Singapore (“MAS”) continually monitors and analyses information from a wide range of sources as part of its surveillance of money laundering and terrorism financing risks. This includes suspicious transactions reports filed by our financial institutions (“FIs”), information from intelligence sources, including those abroad, and publicly available information such as from independent investigations and media reports. MAS therefore takes seriously the recent disclosures in the Pandora Papers.
4 The ICIJ has reported that 336 prominent individuals from around the world had established offshore structures to hold assets
5 Based on MAS’ assessment and information available thus far, the Pandora Papers have not raised significant concerns over the money laundering and counter terrorism financing (“AML/CFT”) controls of our FIs. Nevertheless, MAS is engaging the relevant FIs to assess if tightening of controls are warranted.
6 As ICIJ itself is careful to acknowledge, there are legitimate reasons to set up offshore structures, such as for investment and estate management. However, offshore structures often lack transparency and are thus vulnerable to abuse for illicit activities. Hence, MAS has clear requirements for FIs in Singapore to identify and verify the identities of persons who are beneficial owners or effective controllers of their customer accounts. FIs must understand the reasons for the use of such structures, take measures to ascertain that the assets held in these structures are not illicit, and scrutinize any unusual transactions as part of their ongoing monitoring of the account.
7 MAS also supervises the FIs to ensure that their boards and management have implemented robust controls against money laundering and terrorism financing. Where there are breaches of AML/CFT requirements, MAS has taken strong enforcement action.
8 In fact, both the licensed trust companies in Singapore mentioned in the Pandora Papers have already been subject to MAS’ supervisory or enforcement actions. One of them, Asiaciti Trust (Singapore) Pte Ltd, paid a composition penalty of $1.1 million imposed by MAS in July last year for its failure to implement adequate AML/CFT policies and procedures. The other trust company, Trident Trust Company (Singapore) Pte Ltd, was directed by MAS in September last year to remediate weaknesses detected in its risk assessment controls during MAS’ supervisory surveillance. Both companies were under intensified scrutiny by MAS before they were mentioned in the Pandora Papers.
9 Let me assure this House that Singapore takes the integrity of our financial sector very seriously. As a major international financial centre, Singapore will always face the risk of illicit financial flows. What is important is that we supervise our FIs well, and take strong enforcement actions where necessary to reduce this risk as much as possible. MAS has been doing this and will continue to do so.
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