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Offshore vehicles not illegal: MASCentral bank says it has a strict legal and regulatory framework to guard against money laundering and terrorism financingClaire Huang12 April 2016The use of offshore vehicles, in and of itself, is not illegal, Singapore's central bank said, adding that businesses and individuals may set up offshore vehicles for a variety of legitimate commercial or other reasons.And Singapore is firmly committed to being a clean and trusted financial centre and does not tolerate the abuse of its financial system as a refuge or conduit for illicit fund flows, the Monetary Authority of Singapore (MAS) said in a statement on Monday.This came after the Ministry of Finance and MAS said last week that authorities are reviewing the leaked information in what has been dubbed the Panama Papers, and are doing the "necessary checks".The move followed the April 3 leak of the Panama Papers, which contained more than 11.5 million encrypted internal documents from the offices of Panamanian law firm Mossack Fonseca.Described as one the biggest data leaks in history, the documents implicated government heads in setting up "shell" companies in the tax haven of Panama to harbour billions of dollars offshore, including close associates of Russian President Vladimir Putin, relatives of Chinese President Xi Jinping, the late father of British Prime Minister David Cameron and Argentine footballer Lionel Messi. Former Iceland prime minister Sigmundur David Gunnlaugsson became the first political casualty of the tax scandal when he resigned last week after documents showed his wife owned an offshore firm with big claims on the country's collapsed banks.On Monday, MAS said it has a strict legal and regulatory framework to guard against money laundering and terrorism financing through the Singapore financial system. "All financial institutions in Singapore - including banks, fund managers and trust companies - are required to know their customers well, including any persons that their customers may be acting on behalf of. Financial institutions are required to scrutinise their customers' source of funds and wealth, and check for any adverse information about them. If offshore vehicles are being set up, financial institutions must ascertain their purpose and satisfy themselves that such vehicles are not meant to be used for unlawful ends. Financial institutions must also monitor their customers' accounts for suspicious transactions on an ongoing basis and report any they come across."Regular on-site inspections are also conducted to ensure that financial institutions comply with laws and regulations against money laundering and terrorism financing, the regulator said, adding that if a financial institution is found in breach, it will take enforcement actions which may include financial penalties or business restrictions, depending on the severity of the breaches."Singapore authorities - including MAS, the Commercial Affairs Department (CAD), the Attorney-General's Chambers (AGC), and the Inland Revenue Authority of Singapore (IRAS) - have established effective channels to exchange information, in view of the often cross-border nature of money laundering and terrorism financing. We make requests to foreign enforcement agencies for information to assist in our investigations and also provide them timely assistance to facilitate their investigations."The regulator pointed out that the anti-money laundering and counter terrorism financing regime here meets the standards of the Financial Action Task Force - the global standard-setting body for such affairs - and that the International Monetary Fund has assessed MAS' regulation and supervision of the financial sector to be "among the best globally".
Separately, New Zealand on Monday ordered an independent review of its foreign trust laws after the Panama Papers suggested it is being exploited for tax avoidance. Finance minister Bill English said the Cabinet agreed to appoint tax expert John Shewan to conduct a review of disclosure rules covering foreign trusts registered in the country.
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