Wednesday, October 31, 2012

Tax Crimes as Money Laundering Predicate Offences in Singapore

Following through on the updated FATF Recommendations, MAS has issued a consultation paper on the new designation of tax crimes as money laundering predicate offences. Willful and fraudulent tax evasion are to be designated serious tax crimes and become predicate offences to money laundering in Singapore.
By 1 July 2013, all financial institutions in Singapore must enhance their money laundering prevention measures accordingly. Most markedly, they must identify tax-specific risk indicators (‘red-flag indicators’) and introduce them in their existing AML framework. Where necessary, additional information must be obtained to verify the tax status. In addition to applying these measures starting 1 July 2013, the financial intermediaries must undertake a critical review of their existing client relationships.

MAS encourages finanical institutions to consider the framework the Private Banking Industry Group is developing as a reference when evaluating the suitability of their practices. The objective is to establish a framework fitting your specific business and its specific risks. The challenge is on.

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