ASEAN KEY DESTINATIONS
Singapore’s financial role draws warningBy David Swartzemtruber
Featuring a dynamic stock exchange, a progressive economy and strong financial institutions, Singapore is was ranked as the world’s top economy last year and a very easy place to do business, perhaps too easy.
It is easy to create an offshore account in Singapore and many have done that since the US crackdown on Americans depositing funds in Swiss banks.
The Monetary Authority of Singapore (MAS) said it will not tolerate the use of the country's financial system to conduct criminal and illegitimate activities and has called on financial institutions to be alert to agreements between countries to resolve tax issues.
These inter-governmental agreements may create increased risk of illicit fund flows, said MAS.
The central bank, which issued guidelines to all financial institutions here to safeguard the integrity of the financial system, also wants them to undertake a more critical review of any asset transfers into Singapore from such countries.
In its guidelines for financial institutions to safeguard the integrity of Singapore's financial system published Tuesday, the MAS said: "Financial institutions should carefully evaluate the risks and establish the bona fides of customers before accepting such assets. If they have reason to suspect that the assets are illegitimate, they should file Suspicious Transaction Reports and where appropriate, discontinue the business relationship."
"Singapore's success as an international financial centre is built on a track record and reputation for integrity, high standards of regulation and supervision, and strict enforcement," said Mr Lee Boon Ngiap, assistant managing director (Banking & Insurance) at MAS.
"Recent agreements between countries to resolve tax issues may create increased risk of illicit fund flows. The guidelines that MAS has issued today to financial institutions are a pre-emptive step to safeguard Singapore's financial system from being used as a haven to harbour illegitimate funds or as a conduit to disguise the flow of such funds," added Mr Lee.
Recently, WikiLeaks released a US diplomatic cable which claimed Singapore's strict bank secrecy laws and status as a regional financial hub made it an "attractive destination" for terror groups to launder money.
The cable was from 2005 and was classified as "confidential".
Singapore was assessed as having a "medium" risk of being used by terror groups to launder funds. The world’s new Switzerland may, in fact, have moved to Switzerland
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