CORPORATE service providers (CSPs) can face up to S$100,000 in fines per instance if they fail to meet their anti-money laundering obligations.

Fines will be imposed upon conviction of non-compliance with obligations related to detecting and preventing money laundering, financing the proliferation of weapons of mass destruction, and terrorism financing.

The penalty is among new measures in a proposed Bill aimed at enhancing the regulatory framework for CSPs, said the Ministry of Finance (MOF) and the Accounting and Corporate Regulatory Authority (Acra) on Tuesday (Mar 12).

They are seeking public feedback on the new Bill and proposed amendments to the Companies Act 1967 and Limited Liability Partnerships Act 2005.

Under the new Bill, all business entities that provide corporate services in Singapore will need to register with Acra. These services include:

• Forming corporations on behalf of other persons.

• Acting or arranging for persons to act as directors or nominee shareholders.

• Providing registered office or business address for business entities.

• Designated activities related to providing accounting services.

• Carrying out transactions with Acra on behalf of other persons, or as a secretary of a company by way of business.

Such transactions include buying and selling real estate, managing client money, securities or other assets, and managing bank savings or securities accounts.

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CSPs will need to register with Acra every two years and have at least one registered qualified individual. Acra and MOF noted that non-registration offences could carry a fine of up to S$50,000 and/or imprisonment.

The new Bill will also target the misuse of nominee directorship arrangements by barring individuals from acting as nominee directors unless their appointments have been arranged by registered CSPs.

Nominee directors must also be assessed as “fit and proper” by the registered CSPs and, together with shareholders, disclose to Acra their nominee status and the identities of their nominators.

MOF and Acra will also increase the penalties for breaches of obligations related to the Register of Registrable Controllers, Register of Nominee Directors and Register of Nominee Shareholders.

Plans for Acra to raise penalties on errant CSPs and place restrictions on directorships were previously mentioned by Second Minister for National Development Indranee Rajah in October 2023. 

She was delivering the final of three ministerial statements addressing Singapore’s largest money laundering probe in Parliament.

Investigations have led to Acra cancelling the registration of two filing agents linked to the 10 foreigners nabbed in the anti-money laundering bust. The registrations belonging to the agents’ qualified individuals were also invalidated.

One of the agents, LW Business Consultancy, had failed to perform the additional customer due diligence measures required for customers not physically present during onboarding. (see *Amendment note)

Another breach also resulted from the company’s failure to inquire about the existence of a beneficial owner in relation to some of its customers. LW also failed to perform risk assessments in relation to some of its customers.

Acra has been studying restrictions on directorships to ensure nominee directors are fit and proper for the role, said Indranee.

Restrictions include limiting the number of nominee directorships that one can hold, in line with international benchmarks. Currently, there are no limits to the number of companies that a director can be involved in.

A Singapore resident was previously reported to be listed as a director, secretary and shareholder of 185 companies here, several of which were linked to some of the money laundering suspects arrested.

*Amendment note: The story has been amended to reflect that Acra cancelled the registrations of two filing agents instead of just one filing agent linked to the 10 foreigners arrested in the anti-money laundering bust.