A new anti-money laundering (AML) regime is being prepared by Singapore, with a specific emphasis on regulating nominee directors.
The upcoming Corporate Service Providers Bill, set to be introduced to parliament in early 2024, will establish new regulations for companies and individuals offering corporate secretarial services in and from Singapore. Under this bill, all corporate service providers (CSPs) will be required to register with the regulator. Additionally, if nominee directors hold a certain number of directorships, they will be subject to a 'fit and proper' test.
Furthermore, the bill will mandate that nominee directors and shareholders disclose their nominee status and identify their nominators to the Accounting and Corporate Regulatory Authority (ACRA), making this information publicly available. Currently, such disclosures are only required within the companies, with the details maintained in the confidential register of nominee directors.
To support these new regulations, amendments will be made to the Accounting and Corporate Regulatory Authority Act 2004 and the Companies Act of 1967. CSPs will need to implement group-wide anti-money laundering (AML) policies for their branches and subsidiaries, whether located in Singapore or elsewhere. Additionally, registered filing agents (RFAs) will no longer be exempt from conducting inquiries about beneficial owners when dealing with Singapore or foreign government entities.
The proposed legislation seeks to increase penalties for non-compliance. Breaches of AML rules may result in fines of up to SGD100,000. The maximum financial penalty for RFAs violating the terms and conditions of their registration will be raised from SGD25,000 to at least SGD50,000 per breach, with CSPs facing an equivalent financial penalty. Registered qualified individuals who breach the registration rules will also face an increased maximum financial penalty, rising from SGD10,000 to SGD20,000 per breach.
The introduction of this new bill is partially driven by the recommendations of the Financial Action Task Force (FATF), as well as a recent high-profile AML case that occurred in Singapore. In response, an inter-ministerial committee is being formed to review the country's AML regime. This committee will explore various measures to prevent money launderers from exploiting corporate structures, enhance controls within financial institutions, and encourage the reporting of suspicious transactions. Additionally, it will address AML risks associated with other entities, such as CSPs and real estate agents, and foster greater cooperation among government agencies to bolster the detection of suspicious activities.
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