Other changes required
Experts also said that imposing regulatory restrictions is not a “perfect” solution, but just one way to strengthen Singapore’s anti-money laundering regime.
Recent court cases have raised questions about a lack of due diligence by corporate service providers. For example, a Singaporean with 980 directorships simply performed a simple online search to see if a client was linked to a criminal investigation.
“It’s important not only to raise standards for corporate service providers, but also to raise awareness of potential abuses by bad actors,” said Lee of Kennedy’s Legal Solutions.
This could be achieved by requiring providers to undergo further training or by introducing “prescriptive requirements regarding what they must do for due diligence” when they accept new customers.
“These are things that need to be verified and approved so that people realize it is no longer business as usual,” he added.
This due diligence also needs to be an ongoing process, Lee said.
“Initially someone may come to you and pass a litmus test, but along the way it’s your job as a director or company secretary to find out what’s going on and ask questions.
“We have people who have the appropriate training to be able to say, ‘We’re sorry, but we can’t continue to provide services to you because we have reason to believe that your activity is objectionable to us.’ is needed.”
Similarly, Professor Lo recommended introducing measures to educate corporate service providers on due diligence best practices. But he called for these efforts to be phased in to avoid putting too much pressure on the industry.
This can start with a code of practice for due diligence. Companies that demonstrate compliance are awarded the Trust Mark. Over time, measures such as certification and licensing may be introduced.
“Corporate service providers do perform a beneficial function for the economy, and they should not all be penalized at once,” Professor Low said, while acknowledging the need for increased oversight of these companies.
As part of proposals to be submitted to Parliament to strengthen Singapore’s anti-money laundering regime, ACRA will also increase penalties for illegal corporate service providers and require all such companies to register. We are also considering
Mr Ho said these new legislative proposals were a “step in the right direction” to combat money laundering, but called for further regulations to prevent money laundering establishments. Illegal shell company.
“For example, financial institutions need to gain greater insight into the true purpose of transactions undertaken by their corporate customers and regularly and comprehensively review such transactions.”