Tougher
rules will be implemented and existing standards beefed up as regulators move
to safeguard and strengthen the reputation of Singapore's fast-growing
financial services sector.
The authorities intend to have a "tougher
penalty regime" for people caught money laundering or financing terrorist
activities, while laundering money from tax offences will become a criminal
offence.
The get-tough regime was outlined by Mr Ravi
Menon, the managing director of the Monetary Authority of Singapore (MAS), in a
hard-hitting speech at the Wealth Management Institute's anniversary dinner at
the Fullerton Hotel last night.
His battle-plan also included measures to
increase the resources used to deal with suspicious banking activity and
stepping up MAS supervision.
Mr Menon said that as Singapore grows as a
wealth management centre, it is now more vulnerable as a channel for illicit
funds from terrorism, weapons proliferation and other criminal activities.
As other governments are strengthening their
tax regimes, there is also a higher risk of illegal money flowing this way.
"We will ensure that financial crime does
not pay in Singapore and that those who jeopardise Singapore's hard-earned
reputation as a financial centre of integrity face severe consequences,"
he said.
Singapore will align its regime with that of
the approach taken by Paris-based watchdog Financial Action Task Force.
Its report, expected in February, is expected
to make the laundering of proceeds from tax evaders a crime.
"We want to discourage tax evasion monies
from attempting to enter our system. As other jurisdictions tighten their
regimes and tax evasion monies seek cover, Singapore is sending a clear message
that it neither wants nor will tolerate these illicit inflows," he said.
The Commercial Affairs Department will also
have its manpower doubled in the Suspicious Transaction Reporting Office, added
Mr Menon, and the MAS is also reviewing whether to publicise the sanctions
against institutions "persistently or egregiously errant".
Mr Menon took the opportunity to debunk
several misconceptions about Singapore as a wealth management hub. He said its
banking confidentiality standards do not rule out cooperating with
international efforts against criminal activities.
"Where there are sufficient grounds to
indicate that a crime has been committed with wilful intent, then
confidentiality is no bar to cooperation," he said.
Mr Menon added that "tales of large
inflows of funds from Europe into Singapore are vastly exaggerated", and
that the growth of the private banking industry has been through wealth
generated by Asia's economic growth.
Key wealth management players said Mr Menon
sent a strong message that Singapore wants to be a sustainable international
financial centre.
DBS' head of wealth management, Ms Tan Su
Shan, said: "He addressed a tough issue head-on and set the bar high for
everyone. It is hugely significant in putting Singapore on the map of being a
serious long-term player in the wealth management industry and sends a strong
message to the international community."
Mr Deepak Sharma, chairman of Citi Private
Bank and co-chair of the Private Banking Industry Group here, said: "As an
industry player, these are the goals that we have. And we have today a
regulator exactly on the same wavelength, so it will be win-win for the
industry."
Separately, Mr Ng Kok Song, the founding
chairman of the Wealth Management Institute, said Singapore will experience a
recurring shortage of people in the private banking industry, and that the
institute aims to train 5,000 private bankers in the next five years.
Robin Chan
The Straits Times
Business & Investment Opportunities
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