ACRA to Impose Stricter Rules to Combat Money Laundering & Terrorist Financing

ACRA has proposed stricter rules for professionals and firms that assist businesses with corporate filings as per the recommendations of the FATF.

The Accounting and Corporate Regulatory Authority (Acra) said on Tuesday (May 31) that its proposals aim to improve Singapore’s compliance with recommendations by the Financial Action Task Force – an intergovernmental organisation that aims to combat money laundering and terrorism financing – and maintain its reputation as a trusted financial hub.

The proposals also seek to address risks from the misuse of nominee arrangements to create shell companies that facilitate money laundering and require individuals who act as nominee directors to be qualified persons.

Among the authority’s key proposals is a new Corporate Service Providers Bill that requires all entities or people providing corporate secretarial services in and from Singapore to register with Acra as corporate service providers.

This is regardless of whether they need to transact with the authority.

Corporate secretarial services include forming corporations or other legal entities and acting or arranging for another person to act as a shareholder on behalf of a corporation.

Locally registered or incorporated persons and entities that wish to transact with Acra on behalf of their customers must first register with the authority as registered filing agents. These agents are subject to anti-money laundering and counter financing of terrorism obligations.

However, there is a regulatory gap as corporate service providers that are not registered filing agents may be engaged by customers to facilitate illicit activities, said Acra.

Acra is also proposing an increase in financial penalties on registered filing agents, corporate service providers and registered qualified individuals if they breach the terms and conditions of their registration.

It wants to increase the maximum financial penalty for registered filing agents from the current $25,000 to at least $50,000 per breach, and impose an equivalent financial penalty for corporate service providers.

It is suggesting increasing the maximum penalty for registered qualified individuals from $10,000 to $20,000 per breach.

It is also proposing a fine of up to $100,000 for breaches of anti-money laundering and counter financing of terrorism obligations, committed with involvement or neglect by individuals such as directors, owners or partners of corporate service providers.

Suggested read: ACRA Cancels Registration of Company for AML/CFT Failures