Answer to parliamentary questions on Pandora papers

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QUESTIONS NO 1920, 1923, 2003, 1937

PAPER NOTICE 768, 774, 813, 794 OF 2021

FOR ORAL RESPONSE

Date: For Parliament Sitting on November 3, 2021

Question:

Dr Lim Wee Kiak, MP, Sembawang RCMP: To ask the Prime Minister, in light of the information disclosed in the Pandora Papers (a) whether the MAS will review Singapore-based financial institutions and Singaporeans / foreigners involved in the report; (b) whether any person or financial institution will be invited to provide clarification on its activities disclosed in the report; and (c) how does MAS ensure that offshore wealth management services in Singapore remain legal and legitimate by international standards.

Mr. Patrick Tay Teck Guan, MP, Pioneer SMC: Ask the Prime Minister (a) if Singapore is involved in the Pandora Papers; and (b) whether the government is investigating whether Singaporean 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 the illicit activities of offshore financial service providers with registered offices in Singapore; (b) whether more stringent compliances are imposed on companies that violate regulations; and (c) whether there will be a requirement for them to be audited repeatedly 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 ensure that Singapore-based professionals, trust companies and financial institutions responsible for conducting the audits? Due Diligence Requirements under Singapore to Prevent Money Laundering, Terrorist Financing and Tax Evasion Perform their Duties in Order to Maintain Singapore’s Good Reputation as a Financial Hub reliable and responsible.

Response from Mr. Lawrence Wong, Deputy Chairman of MAS and Minister of Finance, on behalf of Mr. Tharman Shanmugaratnam, Prime Minister and Minister in charge of MAS:

1 Mr President, Sir, may I have your permission to answer all Parliamentary Questions (PQ) related to the recent disclosure by the International Consortium of Investigative Journalists (ICIJ) The ICIJ is an international consortium of organizations non-governmental (NGO) investigative journalists. confidential information, together nicknamed the “Pandora Papers”. This includes :
a) The oral PQs of Dr Lim Wee Kiak and Mr Patrick Tay have been tabled for today’s meeting;
(b) Written PQ of Miss Cheryl Chan Wei Ling filed for today’s meeting;
(c) Oral PQ of Mr. Murali Pillai tabled for yesterday’s session.

2 As a global financial center, Singapore intermediates a large volume of fund flows for investment or business purposes, and also provides financial asset management services. While the vast majority of these activities are carried out by law-abiding individuals and businesses, we are constantly on guard against the risk of illicit fundraising activities.

3 The Monetary Authority of Singapore (“MAS”) continuously monitors and analyzes information from a wide range of sources as part of its oversight of money laundering and terrorist financing risks. This includes suspicious transaction reports filed by our financial institutions (“FIs”), information from intelligence sources, including those abroad, and publicly available information such as independent investigations and media reports. . MAS therefore takes the recent revelations in the Pandora Papers seriously.

4 The ICIJ reported that 336 prominent people around the world have established offshore structures to hold assets Information taken from the ICIJ website as of October 30, 2021. Link: https://www.icij.org/investigations/pandora-papers/global-investigation-tax-havens-offshore/, assisted by 14 service providers operating in at least 38 Information taken from the ICIJ website as of October 30, 2021. Link: https://www.icij.org/investigations/pandora-papers/about-pandora-papers-leak-dataset/. Two of the 14 service providers are overseas incorporated trust companies with subsidiaries in Singapore that are licensed and regulated by MAS. Some ICIJ media reports also mentioned that many of these people had foreign bank accounts linked to these structures, in various financial centers including Singapore.

5 Based on the MAS assessment and the information available to date, the Pandora Papers did not raise significant concerns regarding money laundering and anti-terrorist financing controls (“LAB / CFT ”) of our FIs. Nevertheless, the MAS engages the FIs concerned to assess whether a strengthening of controls is justified.

6 As the ICIJ itself is careful to recognize, there are legitimate reasons for setting up offshore structures, such as investment and property management. However, offshore structures often lack transparency and are therefore vulnerable to abuse for illicit activities. Therefore, the MAS has clear requirements for FIs in Singapore to identify and verify the identity of the persons who are the beneficial owners or the effective controllers of their accounts receivable. FIs should understand the reasons for using such structures, take steps to ensure that the assets held in such structures are not illicit, and review any unusual transactions as part of their ongoing monitoring of the account.

7 The MAS also oversees FIs to ensure that their boards and management have strong controls in place against money laundering and terrorist financing. When there are breaches of AML / CFT requirements, MAS has taken strong enforcement action.

8 In fact, the two Singapore approved trust companies mentioned in the Pandora Papers have already been subject to supervisory or enforcement action by MAS. One of them, Asiaciti Trust (Singapore) Pte Ltd, paid a fine of $ 1.1 million imposed by MAS in July last year for its failure to implement adequate policies and procedures to AML / CFT. The other trust company, Trident Trust Company (Singapore) Pte Ltd, was commissioned by MAS in September last year to address weaknesses identified in its risk assessment controls during the prudential supervision of MAS. Both companies came under the scrutiny of 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 center, Singapore will always face the risk of illicit financial flows. What is important is that we supervise our FIs well and take strict enforcement actions where necessary to reduce this risk as much as possible. MAS has done it and will continue to do so.

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