We will not tolerate the use of the financial system for criminal acts: MAS

The Monetary Authority of Singapore is keen to protect the financial system from illegitimate funds amidst the US and Europe’s tax evasion crackdown.

A Bloomberg report noted, “The Swiss government agreed in March 2009 to adopt international standards on the exchange of information on tax evaders after being accused by Germany and the U.S. of helping to shelter cheats. The policy was the biggest change to the country’s banking secrecy laws since their introduction in 1934.”

Meanwhile on its website MAS said, “Financial institutions have a key role in preserving the integrity of the financial system. They should guard against the use of their operations to facilitate any illegitimate activity. Financial institutions must continuously assess the legal, regulatory and reputational risks associated with their business."

MAS stressed the need for financial institutions to be alert to agreements between countries to resolve tax issues and said a more critical review of any asset transfers into Singapore from such countries should be undertaken.

"Financial institutions should carefully evaluate the risks and establish the bona fides of customers before accepting such assets. If they have reason to suspect that the assets are illegitimate, they should file Suspicious Transaction Reports and where appropriate, discontinue the business relationship,” continued MAS.

Deepak Sharma, chairman of Citigroup Inc.’s private banking business in Singapore, was quoted by Bloomberg as saying, “There are a number of different tax treaties going on and the MAS wanted to make sure the industry as a whole is cognizant of that.”

View the report here.