Jurisdiction - Singapore
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Singapore – Corruption, Drug Trafficking And Other Serious Crimes (Confiscation Of Benefits) Amendment Bill.

19 June, 2014

 

 

Introduction


The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) (Amendment) Bill was introduced for First Reading in Parliament on 28 May 2014.


The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (“CDSA”) is the principal anti-money laundering law in Singapore. Amongst other things, the CDSA criminalises the laundering of benefits derived from various criminal offences, and provides for powers to investigate and confiscate such proceeds of such crimes.


The Ministry of Home Affairs (“MHA”) has stated that the proposed changes in the Bill are designed to enhance the detection and prosecution of money-laundering offences, increase deterrence, and facilitate information sharing with foreign enforcement agencies.


The Proposed Changes


The following are the areas where substantial changes have been made by the Bill.


1. Increased Penalty For Offences


At present, the maximum imprisonment term for money laundering offences committed under Sections 43, 44, 46 and 47 of the CDSA is seven years. The Bill will raise this to ten years, making it consistent with the maximum term for terrorism financing under Section 6A of the Terrorism (Suppression of Financing) Act (“TSOFA”).


2. Removal Of The Requirement For a Certificate When Proving A Foreign Predicate Offence


The term predicate offence refers to the underlying crime which generates the proceeds that are laundered. Under the CDSA, the predicate offence can be a domestic offence or its foreign equivalent. Thus, the offence of money laundering is committed so long as the proceeds of a predicate offence (either under local law or the foreign equivalent) are laundered in Singapore.


Under the CDSA as it now stands, where there is laundering of the proceeds of a foreign predicate offence, the law enforcement agency in Singapore is required under Sections 2(1) and 53 of the CDSA to obtain a certificate issued by or on behalf of the foreign country, as the means of proving the foreign predicate offence.


The proposal is to remove the certification requirement and allow for other forms of evidence to be adduced to prove the foreign predicate offence. The concept of foreign predicate offence will also be slightly extended to cover offences under the law of only part of a foreign country (such as a state in a federation).


3. Clarification Of The Application Of Dual Criminality For Foreign Tax Evasion Offences


The current definition of ‘foreign serious offence’ in Section 2(1) of the CDSA will be extended to include a ‘foreign serious tax offence’. A “foreign serious tax offence” will be defined as an offence against the national law of a foreign country that consists of the doing of certain specified acts wilfully with intent to evade, or assist any other person to evade, any tax of that country.


This is intended to broaden the scope of the CDSA in recognition that the tax regime in Singapore differs from that in other jurisdictions, Money laundering cases involving foreign tax evasion offences can be prosecuted in Singapore so long as the offence has been criminalised in the foreign jurisdiction and it has been committed with the wilful intent to evade tax.

 

4. Allow The Confiscation Of Property Of Value Corresponding To The Value Of Instruments Of Crime If The Instruments Have Already Been Dissipated Or Disposed


Currently, Parts II and III of the CDSA provide for the confiscation of criminal benefits and also of instruments used (or intended to be used) in crime.


A new Part IVA will be inserted into the Act after Part III to strengthen deterrence by allowing the courts to order the confiscation of any other property of an equivalent value belonging to an offender if he dissipates or disposes of such instruments of crime, rendering them unavailable for confiscation. This allows law enforcement agencies in Singapore to better tackle syndicated crimes where the instrument being dissipated is the monies used to perpetuate the crime.


5. Define The Suspicious Transaction Reporting Office In The CDSA And Provide Additional Powers For Its Officers To Obtain And Share Information With Foreign Intelligence Units


Currently, Singapore’s Suspicious Transaction Reporting Office (“STRO”) is not specifically mentioned in the legislation. A new section 3A will recognise and define the STRO as well as confer powers on its officers.


6. Implement A Cash Transaction Reporting Regime


A new Part VIB will be inserted into the Act to implement a cash transaction reporting regime for certain prescribed persons when they transact with customers in cash in an amount equal to or above a prescribed threshold. Prescribed persons will be required to undertake customer due diligence measures and implement certain other internal controls.
MHA has indicated that dealers in precious stones and metals will be prescribed, and it appears that the threshold amount will be SGD 30k, in alignment with existing requirements for the reporting of cross border movement of cash.


Conclusion


The amendments complement the recent changes to the TSOFA relating to terrorism financing that were introduced in 2013. The Ministry of Law is also intending to introduce amendments to the Mutual Assistance in Criminal Matters Act (“MACMA”) to strengthen Singapore’s mutual legal assistance framework. The MACMA amendments will be introduced for first reading in Parliament on 29 May 2014. Collectively, these amendments will enhance Singapore’s role in the global anti-money laundering and anti-terrorism financing efforts led by the Financial ActionTask Force.


Shook Lin Bok LLP

 
For further information, please contact:
 
Eric Chan, Partner, Shook Lin & Bok
 

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