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Proposed changes to Singapore Trustees Act aim to enhance reputation as international finance centre

Singapore's Ministry of Law (MinLaw) has asked parliament to approve changes to transparency rules on the ownership of trusts to bring Singapore in line with global standards and help counter money laundering, terrorism financing and tax evasion.01 Mar 2017

MinLaw submitted the amended Trustees bill to Singapore's parliament for a first reading this week as part of a "whole-of-government ongoing review" to make sure that corporate vehicles and trusts are not "misused for improper purposes".

The proposed changes would require trustees to keep maintain beneficial ownership and accounting records for express trusts, to improve transparency on their ownership and control structures. The bill also lays out minimum standards for financial record keeping by trustees.

The amendments give MinLaw the power to prescribe the duties on trustees in terms of obtaining and maintaining financial records and information on any parties "relevant to and dealing with the trust".

MinLaw will also be able to identify specific groups of trusts that are exempt from proposed amendments.

The ministry will have the power to designate any breach of the rules as an offence, and impose a fine of up to S$1,000 (£575), it said.

Tax expert Valerie Wu of Pinsent Masons, the law firm behind Out-Law.com said: "The objective of the amendments is to enhance the transparency of the ownership and control structures of trusts, and prescribe minimum standards for financial record keeping by trustees."

"The amendments are designed to ensure that we continue to be in the good books of the Financial Action Task Force," she said.

A public consultation on the proposed amendments ran from 12 January to 31 January. Respondents "expressed support for Singapore’s efforts to enhance her regime to tackle money laundering and terrorism financing", MinLaw said.

MAS set up a dedicated AML department in August, along with a separate department to strengthen the enforcement of its regulations.

MAS already had a "robust regime" in place to counter the risk of Singapore's financial sector being used for money laundering and terrorist financing, but international finance is increasingly complex and there is a need for greater supervision, MAS said. 

The dedicated AML department will look after all policies on money laundering and other illicit financing risks, MAS said. It will monitor risks and carry out on-site supervision of how financial institutions manage these risks.