Singapore is preparing a new anti-money laundering (AML) regime focusing on the regulation of nominee directors.
A new Corporate Service Providers Bill expected to reach parliament in early 2024 will require all companies or individuals providing corporate secretarial services in and from Singapore to register with the regulator, without exception. It will also require all corporate service providers (CSPs) to apply a 'fit and proper' test to nominee directors if they hold more than a certain number of directorships.
Moreover, nominee directors and shareholders will have to disclose their nominee status and identify their nominators to the Accounting and Corporate Regulatory Authority (ACRA), which will make the information publicly available.
Currently, nominee directors and shareholders are required to disclose their particulars only to their companies, with the information held in the confidential register of nominee directors.
Amendments will also be made to the Accounting and Corporate Regulatory Authority Act 2004 and the Companies Act of 1967. CSPs will have to implement group-wide AML policies for their branches and subsidiaries in Singapore or elsewhere. Registered filing agents (RFAs) will no longer be exempt from inquiring about beneficial owners in relation to a customer that is a Singapore government or foreign government entity.
The Bill also proposes to increase non-compliance penalties. Fines up to SGD100,000 will be imposed for breaches of the AML rules. The maximum financial penalty is increasing from SGD25,000 to at least SGD50,000 per breach for RFAs that breach the terms and conditions of their registration, with an equivalent financial penalty for CSPs. The maximum financial penalty for registered qualified individuals who breach the registration rules will rise from SGD10,000 to SGD20,000 per breach.
The new legislation is being enacted partly to meet the recommendations of the Financial Action Task Force (FATF) and partly because of the recent billion-dollar AML case that took place in Singapore. A new inter-ministerial committee is also being formed to review the country's AML regime. It will discuss measures to prevent corporate structures from being abused by money launderers, improve controls by financial institutions and promote the flagging of suspicious transactions. It will also safeguard against AML risks by other entities such as CSPs and real estate agents, and strengthen cooperation across government agencies to better detect suspicious activities.
News Source：【Morgan Lewis 2023/11/09】
