New Bill to strengthen measures against misuse of companies

• New Bill to strengthen measures against misuse of companies

• Stronger oversight needed to weed out illicit corporate activities

The Straits Times, 11 September 2023

New Bill to strengthen measures against misuse of companies

We thank Mr Cheong Wing Kiat for his letter, "Stronger oversight needed to weed out illicit corporate activities" (7 September 2023).

Singapore adopts a whole-of-government approach to combat money laundering and terrorism financing. Within this, the role of the Accounting and Corporate Regulatory Authority (Acra) is to ensure corporate transparency.

We agree with Mr Cheong's concern about individuals holding an excessive number of directorships. Acra consulted the industry and public in 2022 on a proposal to limit the number of nominee directorships an individual can hold, unless he holds certain professional qualifications or satisfies prescribed training requirements.

This is part of a broader set of legislative amendments under a proposed Corporate Service Provider (CSP) Bill, targeted for early 2024, which includes enhancements to penalties for CSPs and their senior management for breaches of their anti-money laundering and countering the financing of terrorism (AML/CFT) obligations, as they are often responsible for appointing nominee directors. We are currently finalising the proposals, taking into consideration industry feedback.

These enhancements will build on current measures relating to corporate transparency, such as requirements for companies to keep and maintain registers of their registrable controllers, nominee directors and nominee shareholders, which are made available to law enforcement agencies. Acra also requires CSPs to comply with AML/CFT requirements, which include customer due diligence to identify and verify the identity of their customers and the beneficial owner(s).

As part of Acra's surveillance and enforcement efforts, augmented with information from other agencies, Acra will continue to act against errant CSPs, and review and strike off inactive companies. Acra will continue to review and enhance our anti-money laundering measures, while keeping in mind our objective of fostering a business-friendly environment.

Ms Lim Siew Gim

Divisional Director, Corporate Development Division

Accounting and Corporate Regulatory Authority

The Straits Times, 7 September 2023

Stronger oversight needed to weed out illicit corporate activities

I refer to the news report "Bedok resident behind 185 companies; 9 of them linked to billion-dollar money laundering bust, (3 September 2023)".

It is clear alarm bells should have sounded over an individual holding directorships in so many companies, as noted by experts.

Even the Accounting and Corporate Regulatory Authority (Acra) acknowledges this as an unusual occurrence.

Acra, as Singapore’s first line of defence against illicit activities like money laundering and terrorism financing, must proactively establish a standard operating procedure to identify and scrutinise individuals with an excessive number of directorships.

Prevention is always more effective than damage control. There should be a cap on the number of directorships an individual can hold, in order to safeguard Singapore’s reputation as a trusted financial centre.

Singapore’s global standing depends on its unwavering commitment to corporate governance. Acra must act immediately to strengthen oversight and ensure that Singapore remains a place of business integrity.

Cheong Wing Kiat