Second Reading Speech by Mr Tharman Shanmugaratnam Second Minister for Finance
The Monetary Authority of Singapore (Amendment No. 2) Bill 2007
Mr Speaker Sir, on behalf of the Senior Minister, I beg to move that the Bill be now read a second time.
2 Earlier this year, Parliament approved an amendment to the Monetary Authority of Singapore Act to consolidate the MAS’ powers, under the various Acts it administers, to issue Notices on anti-money laundering and countering the financing of terrorism (“AML/CFT”) in a single Act (i.e. section 27B of the Monetary Authority of Singapore Act). MAS has since re-issued the AML/CFT Notices under this section to the financial institutions and persons it regulates.
3 The current amendments to the MAS Act seek to enhance the deterrents against money laundering and terrorist financing in the financial sector. Mr Speaker Sir, I will now touch on the key amendments proposed in this bill.
(A) Increase in maximum penalty
4 Money laundering is an ever-present danger in global markets. Left unhindered, it can injure the reputations of financial institutions, erode the integrity of financial markets, and weaken the resiliency of our economy. All governments have to play their part in the fight against money laundering, and more so those in global financial centres such as Singapore.
5 The rise in terrorism activity around the world makes it even more imperative that governments take effort to suppress terrorism financing. I understand that later in today’s session, the Minister for Home Affairs will be moving amendments to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (“CDSA”). These amendments, inter alia, increase the maximum fine for money laundering offences from $200,000 to a maximum of $500,000 for individuals, and a maximum of $1 million for such offences committed by institutions/corporations. MAS supports these strong measures to deter those who would seek to abuse Singapore’s financial system.
6 In alignment with the increase in CDSA penalties, the MAS Amendment Bill will increase the maximum penalty provided for in the MAS Act for breaches of directions or regulations giving effect to Singapore’s United Nations obligations and for the prevention of money laundering or terrorist financing, from $100,000 to $1 million.
(B) Derivative liability
7 The amendments also clarify that sanctions for breach of the AML/CFT requirements apply not only to the legal persons that are financial institutions or businesses, but also to their directors and senior management.
8 The Bill, therefore, introduces a new section 28B into the MAS Act to impose liability on directors and officers where non-compliance by the financial institution is attributable to their consent, connivance or neglect. This is also in alignment with the CDSA, which contains a similar derivative liability provision.
9 Mr Speaker Sir, this Bill will further deter money laundering and terrorist financing. It signals our commitment to maintain the high standards of integrity and trust in Singapore’s financial system.