Legislative amendments will enhance transparent ownership and control structures of trusts, and establish minimum standards for financial recordkeeping by trustees.
The Singapore Ministry of Law has launched a public consultation on proposed amendments to the Trustees Act (Cap. 337) (the Act). Comments on the Trustees (Amendment) Bill were due 31 January 2017. The proposed amendments empower the Minister of Law to enact rules to give effect to Financial Action Task Force recommendations and Global Forum on Transparency and Exchange of Information for Tax Purposes requirements, underscoring Singapore’s commitment to international efforts in countering money laundering, terrorism financing, and tax evasion.
The proposed amendments include provisions empowering the Minister to do the following:
- Prescribe duties on trustees to
- obtain and maintain financial records, as well as information on the parties relevant to and dealing with the trust;
- obtain, hold, and keep updated accounting records relating to the trust; and
- disclose their status to business and service providers when transacting in their capacity as trustees in any prescribed transaction.
- Prescribe the measures a trustee must take to discharge its duties with regard to maintaining information and accounting records.
- Prescribe specified groups of trusts that are exempt from the proposed amendments.
- Designate any breach of such rules as an offence.
- Impose a fine not exceeding S$1,000 for any breach of these obligations.
Readers will recall the “Panama Papers” incident of 2016 where data was leaked from 200,000 offshore entities set up by wealthy individuals around the world, including the records of thousands of Singapore-linked offshore entities. The proposed amendments will provide greater clarity to professional trustees on what the law expects of them in terms of information diligence and recordkeeping, and will work toward ensuring that corporate and trust structures are not misused for improper purposes.