Government's Actions after Disclosure in Panama Papers

23 Dr Lim Wee Kiak asked the Minister for Finance (a) whether the Ministry is taking any action in the aftermath of disclosures made in the Panama Papers; (b) whether any Singapore companies and individuals have been named in the Papers and, if so, who are they; and (c) what is the Ministry's position on Singapore being named by several international news sources as a haven for tax evasion.

The Senior Minister of State for Finance (Ms Indranee Rajah) (for the Minister for Finance): The Accounting and Corporate Regulatory Authority (ACRA) and the Monetary Authority of Singapore (MAS) have been reviewing the information released in May 2016 on the individuals and entities named in the Panama Papers. Among the entities named, there was one Singapore-incorporated company. There were also individuals and overseas entities with some association with Singapore, for example, where they have some association with a company service provider (CSP) or a person who was said to have a Singapore address. In addition, financial institutions(FIs) and CSPs in Singapore were named as intermediaries that had dealt with the said individuals or entities.

Mdm Speaker, I should clarify at the outset that the use of offshore vehicles, in and of itself, is not illegal. Offshore vehicles can and are commonly used for legitimate purposes, such as mergers and acquisitions, and estate planning. The International Consortium of Investigative Journalists (ICIJ), which released the Panama Papers, has, indeed, itself highlighted that being named in the Panama Papers does not automatically constitute a basis for suspicion or evidence of wrongdoing. The approach taken by our authorities in connection with the Panama Papers, therefore, is to look into whether there was actual wrongdoing by any individual or entity in Singapore. If so, we will take firm action.

MAS and ACRA have reminded FIs and CSPs respectively of their duty to periodically review their customer relationships. These professional intermediaries have also been asked to ascertain that their customers are using offshore vehicles strictly for legitimate purposes. If there is any ground for suspicion, the professional intermediaries are legally obliged to file suspicious transaction reports. MAS and ACRA are conducting checks to ensure that the professional intermediaries under their supervision have acted in compliance with their obligations to prevent money laundering and terrorism financing.

The Suspicious Transaction Reporting Office (STRO) in the Commercial Affairs Department has also reminded lawyers and accountants to report any suspicious transaction they come across. STRO will analyse the information and evaluate if an offence might have been committed. Where appropriate, STRO will disseminate the information to the relevant authorities in Singapore or overseas for further investigation.

Mdm Speaker, Singapore is an economy and business hub that attracts, generates and retains substantive economic activities to create skilled and quality jobs. Our conducive business environment is attractive to firms for a range of competitive reasons, including a skilled labour force, good infrastructure and competitive tax rates, as well as our strong commitment to the rule of law.

Safeguarding the integrity of our financial system against illicit funds and activities is paramount in ensuring that Singapore continues to be a financial centre trusted by international investors and global FIs. Our regulatory and supervisory regime meets international standards and enables effective exchange of information with overseas tax authorities, including banking and trust information. Hence, too, it deters illicit funds, including proceeds of tax crimes, from using our financial system. To reiterate, Singapore stands ready to fully assist foreign authorities in their investigations into potential illicit activities, in accordance with our international commitments to global standards.

Dr Lim Wee Kiak (Sembawang): Let me thank the Senior Minister of State for the reply. Since the Senior Minister of State mentioned that they have been reviewing the companies as well as the names that have appeared in the Panama Papers, may I ask, in the current review, whether there are any suspicious activities. Is anybody under investigation? Is it all cleared or are they still under investigation?

Ms Indranee Rajah: This comes under the Suspicious Transactions Reporting Office. What they have done is to remind the financial institutions(FIs) and intermediaries like the lawyers and accountants to report suspicious transactions. Whatever has been reported to them, they are reviewing and looking at them. Obviously, in the course of investigations, it would not be appropriate to name individuals or entities at this stage because some of them may well turn out to be in the clear. But I have no doubt that the Commercial Affairs Department will take strong and decisive action against any individual or entity that is found to have been guilty of wrongdoing.