The Panama Papers

Parliamentary Question by Dr Lim Wee Kiak:

To ask 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.

Reply by Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam:

The Accounting and Corporate Regulatory Authority (ACRA) and 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 (e.g. 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 and CSPs in Singapore were named as intermediaries that had dealt with the said individuals or entities.

Madam 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 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 financial institutions 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.

Madam 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 financial institutions. 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.