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S'pore to Step Up Efforts to Prevent Money Laundering |
| Source: |
channelnewsasia.com |
| Source Date: |
Friday, February 03, 2012 |
| Focus: |
Knowledge Management in Government
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| Country: |
Singapore |
| Created: |
Feb 07, 2012 |
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There is growing speculation that Singapore will attract more deposits from high-net worth individuals.
This comes following the recent collapse of Switzerland's oldest private bank Wegelin.
Industry watchers said the clients of Swiss banks may be prompted to look to Singapore to park their funds.
The banking sector in Singapore is becoming more crowded, with a growing number of European banks setting up operations here over the past five years.
Edmund Leow, principal at Baker & McKenzie.Wong & Leow, said: "In the past five years or so, we have seen numerous Swiss banks and other European banks setting up Singapore operations. This coincided with a growing trend towards transparency in various jurisdictions, including in Europe where they have the savings directive in the EU.
"In general, if a citizen from an EU state opens a bank account in another EU state, then there would be automatic exchange of information, whereby the recipient country will automatically disclose that information to the taxpayer's home country.
"This creates a lot of confidentiality issues, and therefore some EU citizens have been looking for alternative locations where they can park their cash, and Singapore was seen as one of the alternative jurisdictions."
Singapore has been making an effort to keep its banking system clean - and prevent money laundering.
It has already signed some 30 exchange of information agreements with tax authorities of various countries.
Up till late 2009, Singapore was on the "grey list" of jurisdictions that do not comply fully with the Organisation for Economic Co-operation and Development's (OECD) standards on the exchange of tax information.
It takes about 12 exchange of information agreements to get on the "white list".
Chong Lee Siang, financial services tax partner at Ernst & Young, said: "We want to prevent tax evaders from making use of Singapore. At the same time, though we have our banking secrecy laws in place, we make sure that the way we implement this exchange of information is that we don't want fishing expeditions by the foreign tax authorities, so they have to be justifiable cases, they have to be well-supported."
Industry watchers said that banks will still need to keep a close watch on fund inflows.
Bernard Lee, CEO of HedgeSPA and research fellow at ITI @ SMU, said: "The onus of identifying legitimate private banking business almost always resides with the private banker. If the international regulators outside of Singapore see that Singapore - or any other jurisdiction - is not doing its job, it will be forced to go around twisting people's elbows."
Experts note that authorities in Singapore have taken steps to ensure that it does not become a tax haven even as it seeks to grow its share of the wealth management industry.
New legislation is expected to be introduced this year, which will criminalise tax evasion as a predicate offence for money laundering.
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S'pore to Step Up Efforts to Prevent Money Laundering There is growing speculation that Singapore will attract more deposits from high-net worth individuals This comes following the recent collapse of Switzerland's oldest private bank Wegelin
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