Singapore proposes to bar convicted money launderers from directorships

The Ministry of Finance (MOF) and the Accounting and Corporate Regulatory Authority (Acra) plan to bar those who have been convicted of money laundering offences from serving as a company director as part of wide-ranging reforms to strengthen Singapore’s corporate framework.

These and other proposals come in the wake of a S$3 billion money laundering scandal that rocked the city-state in 2023.

The proposed amendments – targeting the misuse of firms, and aiming to ease compliance burdens and strengthen shareholder protection – are now open for public consultation until Jul 31.

In a joint release on Monday (Jul 14), MOF and Acra proposed to make changes to the:

• Accountants Act 2004;

• Accounting and Corporate Regulatory Authority Act 2004;

• Companies Act 1967;

• Limited Liability Partnerships Act 2005; and,

• Limited Partnerships Act 2008.

Currently, the Companies Act 1967 has no provisions to disqualify persons convicted of money laundering offences from acting as a director.

A proposed amendment introduces a new ground to disqualify such persons from taking on the role, thus strengthening Singapore’s anti-money laundering regime, according to the public consultation documents on the Reach portal.

Additionally, the proposed amendments to the Companies Act 1967 include a shortened timeline for deregistering a company from the Register of Companies. This could reduce the likelihood of misusing inactive companies for illicit purposes, such as money laundering.

For voluntary striking off by companies, it will require 60 days for the public to object, instead of 90 days. For Registrar-initiated striking off, it will require 75 days –15 days for the company to object, and 60 days for the public to object – instead of 90 days.

“The proposed amendment will improve the efficiency of the striking-off process as a whole without changing the length of (the) statutory period (60 days) for the public to lodge objections,” stated the document listing out the key amendments to the Companies Act 1967 and Accountants Act 2004. Consequential and related amendments may be made to other written laws to give effect to or align with these amendments.

The existing definition and obligations related to anti-money laundering and countering the financing of terrorism that are applicable to public accountants and accounting entities in the Accountants Act 2004 and subsidiary legislation refer to only money laundering and the financing of terrorism.

A proposed amendment of the definition and obligations is to explicitly include countering the financing of the proliferation of weapons of mass destruction, or proliferation financing, in line with the Financial Action Task Force’s requirements for countries to explicitly assess and address risks related to it.

On reducing the regulatory burden for companies, the governing bodies proposed to remove the requirements for public limited companies with a share capital to convene a statutory meeting and prepare a statutory report. This is to provide more flexibility without compromising members’ rights.

More details and the amendment Bill can be found on the Reach public consultation portal. Interested parties can submit their comments via FormSG, noted both MOF and Acra.

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