Corporate Registers Bill — Speech by Leon Perera

Delivered in Parliament on 10 January 2022

Mr Speaker sir, the Corporate Registers (Miscellaneous Amendments) Bill seeks to amend certain laws relating to the prevention of money-laundering and terrorist financing. The proposed amendments are a result of recommendations made by the inter-governmental body known as the Financial Action Task Force or FATF.  These amendments concern administrative requirements applicable to companies in Singapore. 

The Bill is a step in the right direction for Singapore as it underlines our commitment to being a responsible global player in financial services, one that is committed to a transparent, rules-based global order and hence able to derive economic benefits from that order. My speech will support the Bill but raise questions and suggestions.

Sir, Singapore is committed to the global effort to combat transnational crime. As a member of the Financial Action Task Force (FATF) and a founding member of the Asia/Pacific Group on Money Laundering, the Singapore government’s stated aims have been to (1) detect, deter and prevent money laundering and terrorism financing; and (2) protect the integrity of its financial system from illegal activities and illicit fund flows. 

Singapore has continued to make progress to address the technical compliance deficiencies identified in the latest 2019 FATF mutual evaluation report (MER). As a result of this progress, Singapore has been re-rated on several Recommendations (i.e. 3, 23, 24, and 25). 

Take for instance the amendment of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), which came into effect in April 2019. The increase in fines through these Acts were considered sufficiently dissuasive in the said MER, which led Singapore to be re-rated as Compliant with Recommendation 3 – bringing Singapore closer to its goal of deterring money laundering and terrorist financing activities. 

However, Singapore has not addressed all the identified deficiencies and several areas for improvement still exist. In order to strengthen Singapore’s measures to fight money laundering and terrorism financing, the Corporate Registers Amendment Bill is necessary to keep Singapore’s legal regime aligned with FATF standards and recommendations. 

Mr Speaker, I have three broad points to make on this Bill.

Timelines for locally-owned companies to update registers of Key Personnel

The first point concerns the different timelines for local and foreign companies in updating their registers of key personnel. The amendment Bill, if passed, will result in local companies having to update their register of nominee directors within 7 days, instead of the 14 days under the S173A of the Companies Act – while foreign companies may update their register of members within 30 days. 

The Bill originally intended that foreign companies should update their register of members within 14 days. However, during the public consultation, the feedback was that this would be a challenge for foreign companies especially if they have more than 50 members. While the feedback suggested that companies should be given 14 to 28 days, MOF and ACRA further extended the deadline to 30 days – stating that this would be aligned with the requirements in S372 of the Companies Act. In other words, this feedback was accepted in the spirit of harmonizing timelines in existing legal provisions.

Indeed, this is a commendable, reasonable, and consistent approach that avoids imposing multiple timelines and requirements for foreign companies. 

However, feedback to amend requirements for local companies for consistency with existing legislation was not as well received. The amendment Bill currently intends for local companies to update their information on nominee directors and shareholders within 7 days. With that being said, feedback from the consultation proposed that local companies should be given 14 days instead, as this would be in line with S173A of the Companies Act – which already requires a company to provide updates regarding changes to any appointment of directors, chief executive officers, secretaries, auditors and others within the period of 14 days. 

However, this feedback was not accepted. The implication is that local companies now have two timelines to follow – 7 days to update particulars for nominee directors and 14 days for particulars of all other key personnel. 

This begs the following question: what is the basis for requiring that local companies must update their information on nominee directors within a 7-day period, when there is already an existing requirement to update information on various key position holders within 14 days? Should this provision be accepted by this House, there would be two timelines for local companies in contrast to foreign companies being uniformly subject to one. 

Minister Indranee Rajah stated earlier in her second reading speech that foreign companies may need more time to contact overseas directors but local companies may also have some directors residing overseas either on a long-term basis or who may be overseas at the relevant time, so I am wondering why the time-lines for both local and foreign companies cannot be harmonised.

Strengthening compliance with other FATF Recommendations

Sir, my second point relates to the Government’s plans to improve compliance with the other FATF recommendations. Singapore has made great progress in implementing Recommendation24 on transparency and beneficial ownership of legal persons. Through an amendment to the Companies Act in 2017, and further amendments in this Corporate Registers Bill before us, Singapore has strengthened its compliance with Recommendation 24 – where Singapore was rated as Largely Compliant.

However, sir, there remain other FATF recommendations which Singapore was found to be only partially compliant with. These are Recommendations 22, 28 and 35. 

Recommendation 22 concerns the application of customer due-diligence and record-keeping requirements to designated non-financial businesses and professions (DNFBPs), such as the gambling and legal industries. 

Recommendation 28 is about subjecting the aforementioned DNFBPs to regulatory and supervisory frameworks regarding anti-money laundering and counter-terrorist financing measures. 

Recommendation 35 relates to the available range of sanctions to deal with parties that have failed to abide by anti-money laundering and counter-terrorist financing measures. 

Given that it is ostensibly the goal of this Bill to counter money laundering and terrorism financing concerns, and recognising the increasingly sophisticated methods employed to launder money and finance terror activities, how does the Government intend to improve compliance with these three FATF recommendations, Recommendations 22, 28 and 35

Clarifications of certain terms in the Bill

Sir, finally, I would like to raise some questions about the clarification of certain terms contained in the amendment Bill. These terms include “individuals with executive control”, “executive control”, and “accustomed”. 

In their document published in response to key feedback received for this Bill, MOF and ACRA had stated that such terms are ‘to be clarified’. As such, could the Minister advise when MOF and ACRA intend to provide such clarifications? I ask this considering the need to avoid business uncertainty. Can such guidance be expected shortly upon this Bill’s passage or coming into force?

Thank you.



(3) See s46

(4) See p4-5