Lawmakers and regulators in Singapore don't think that the latest leaks of confidential information from IFCs shows its AML and counter-terrorism controls aren't strong enough.

Singapore policymakers say that the recent data haul obtained by a consortium of journalists has not raised significant worries about anti-money laundering and counter-terrorism financing controls in the Asian city-state.

A few weeks ago, the International Consortium of Investigative Journalists published a “leak” of data on more than 27,000 companies and 29,000 so-called ultimate beneficial owners. Details of 330 politicians’ financial affairs have been revealed. (This news service discussed these latest data dumps here.)

Two licensed trust companies with operations in Singapore were already under “intense scrutiny” by the local authorities before they were named in the Pandora Papers, Singapore finance minister Lawrence Wong said in a statement to parliament yesterday. Those companies, which have already been subject to supervisory or enforcement actions, were Asiaciti Trust (Singapore) Pte Ltd, and Trident Trust Company (Singapore) Pte Ltd.

“Based on MAS’ assessment and information available thus far, the Pandora Papers have not raised significant concerns over the money laundering and counter terrorism financing controls of our financial institutions. Nevertheless, MAS is engaging the relevant FIs to assess if tightening of controls are warranted,” Wong said, as reported on the Monetary Authority of Singapore’s website. 

“The ICIJ has reported that 336 prominent individuals from around the world had established offshore structures to hold assets, assisted by 14 service providers operating in at least 38. Two of the 14 service providers are foreign-incorporated trust companies with subsidiaries in Singapore that are licensed and regulated by MAS. Some ICIJ media reports also mentioned that many of these individuals had foreign bank accounts linked to these structures, in various financial centres including Singapore,” he continued. 

Wong pointed out that both the licensed trust companies in Singapore mentioned in the Pandora Papers have already been subject to MAS’ supervisory or enforcement actions. Asiaciti Trust (Singapore) Pte Ltd, paid a composition penalty of S$1.1 million imposed by MAS in July 2020 for its failure to implement adequate AML/CFT policies and procedures. Trident Trust Company (Singapore) Pte Ltd, was directed by MAS in September last year to remediate weaknesses detected in its risk assessment controls during MAS’ supervisory surveillance. Both companies were under intensified scrutiny by MAS before they were mentioned in the Pandora Papers, Wong said. 

“As a major international financial centre, Singapore will always face the risk of illicit financial flows. What is important is that we supervise our FIs well, and take strong enforcement actions where necessary to reduce this risk as much as possible. MAS has been doing this and will continue to do so,” Wong added. 

The Consortium’s report followed its “Panama Papers” and “Paradise Papers” revelations of recent years. In the latest information haul, the King of Jordan, the presidents of Ukraine, Kenya and Ecuador, the prime minister of the Czech Republic and former UK prime minister, Tony Blair, are named. The files also detail financial activities of Russian president Vladimir Putin’s “unofficial minister of propaganda” and more than 130 billionaires from Russia, the US, Turkey and other nations. 

The reports do not appear to directly accuse any of those named of committing specific crimes, but wrongdoing is clearly implied. For instance, a 4 October report by the ICIJ, written by Sydney P Freedberg, Agustin Armendariz and Jesús Escudero, says this of international law firm Baker McKenzie: “When billionaires, multinationals and the politically connected seek to hide wealth or avoid taxes, they often turn to Baker McKenzie, the Chicago-based behemoth.” What the article doesn’t state is that avoidance is not typically a crime, as is the case with evasion. 

To leave readers in no doubt about its political slant, this particular article, after quoting Baker McKenzie as saying it does not engage in nefarious conduct, states: “Behind the lofty pronouncements is a plain reality: Baker McKenzie is an architect and pillar of a shadow economy, often called 'offshore,’ that benefits the wealthy at the expense of nations’ treasuries and ordinary citizens’ wallets."

(Editor’s view: that “offshore” locations are somehow taking money from revenue departments in other countries and hence hurting people is a matter of opinion - the money is still being invested - and yet this article treats the evil of offshore centres' very existence as a matter of fact. This clear bias plainly compromises the potential for these “papers” to bring about necessary change.)

The papers identify 956 companies linked to 336 high-level politicians and public officials, and note that the majority of the companies were linked to the British Virgin Islands.