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In her opening address at the 9th CSIS Corporate Service Providers Conference on July 10, 2024, Mrs. Chia-Tern Huey Min, who recently assumed the role of Chief Executive at ACRA, likely focused on key areas of collaboration between ACRA and the CSP sector. The speech might have addressed ACRA initiatives relevant to corporate service providers, or broader themes related to Singapore’s business environment and regulatory landscape for companies. Here’s a summary of the key themes addressed by Mrs. Chia-Tern Huey Min in her opening address:

1. Collaboration between ACRA and CSPs:

• Mrs. Chia-Tern Huey Min acknowledges CSIS’s role in developing the CSP sector and their ongoing collaboration with ACRA.
• She highlights the importance of feedback from CSPs in shaping regulations, citing the recent Corporate Service Providers Bill (CSP Bill) as an example.

2. Importance of the CSP Bill for Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT):

• Mrs. Chia-Tern Huey Min clarifies that the CSP Bill was not solely a response to the recent money laundering case, but part of a long-term effort to strengthen Singapore’s AML/CFT regime.
• She emphasizes the role of the CSP Bill in enhancing transparency of beneficial ownership for companies and Limited Liability Partnerships (LLPs).

3. The Role of CSPs in Singapore’s AML/CFT Regime:

• The recent money laundering case highlighted the critical role of CSPs in preventing the misuse of Singaporean entities for illicit activities.
• Mrs. Chia-Tern Huey Min identifies three areas where CSPs play a crucial role:
  • Misuse of corporate structures
  • Misuse of nominee directors
  • Transparency of beneficial ownership

Preventing Misuse of Corporate Structures 

4. Combating Misuse of Corporate Structures for Money Laundering (ML/CF/PF):

• The new CSP Act aims to close regulatory gaps and ensure all CSPs operating in Singapore are subject to AML/CFT/PF regulations.
• CSPs play a crucial role in preventing misuse by performing customer due diligence (CDD) and filing Suspicious Transaction Reports (STRs).
• ACRA encourages the use of technology like video calls for identity verification and staying updated on advanced AML/CFT solutions.
• ACRA is taking stricter actions against errant Registered Filing Agents (RFAs) and Registered Qualified Individuals (RQIs) who breach regulations.
• Striking off inactive companies and detecting anomalous activities during incorporation are additional measures to prevent abuse.

Mitigating Risk from Misuse of Nominee Directors

5. Importance of Nominee Directors:

• Companies in Singapore require at least one resident director, but foreign-owned companies often utilize nominee directors (individuals appointed to fulfill legal requirements, not actively involved).
• All directors, regardless of nominee status, have legal obligations to act responsibly and diligently.

6. New Regulations:

• The new CSP Act requires all business-arranged nominee directorships to be facilitated by registered CSPs.
• This aims to:
  • Prevent the creation of shell companies for money laundering through nominee directors.
  • Enhance the quality of nominee directors.

7. Responsibilities of CSPs: CSPs are responsible for ensuring the “fit and proper” nature of the individuals they appoint as nominee directors.

8. ACRA’s Measures:

• ACRA has strengthened data analytics to identify potential misuse of nominee directorships.
• They will investigate individuals holding an excessive number of directorships and take action against those who fail to fulfill their duties.
• Increased prosecution of nominee directors for breaches (eight in 2023 compared to three the previous year).

Transparency of Beneficial Owners

9. Importance of Transparency: Transparent beneficial ownership is crucial for a robust Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regime and the global fight against financial crime.

10. New Regulations: Following updates from the Financial Action Task Force (FATF) in March 2022, Singaporean law now requires:

• Nominee directors and shareholders to disclose their nominee status publicly.
• Nominee directors and shareholders to disclose the identity of their nominators to ACRA.

10. Benefits of Transparency: Increased transparency in beneficial ownership helps law enforcement agencies:

• Investigate potential financial crimes.
• Identify criminals hiding behind complex corporate structures.

11. Role of CSPs:

• CSPs play a critical role in ensuring the accuracy and up-to-dateness of business information filed with ACRA.
• Their involvement in arranging nominee directors/shareholders and filing records positions them uniquely to guarantee this accuracy.

Conclusion:

• Acknowledgement of Challenges: Mrs. Chia-Tern Huey Min acknowledges the recent high-profile money laundering case might have negatively portrayed CSPs in the media.
• Recognition of Responsible CSPs: She emphasizes that most CSPs are diligent and committed to their compliance obligations.
• Continued Partnership:
  • ACRA values the partnership with CSPs in maintaining a trusted business environment and attracting investment to Singapore.
  • This partnership is crucial for the upcoming FATF mutual evaluation in August 2025.
• ACRA’s Initiatives: ACRA is committed to:
• Upholding a robust CSP regulatory regime.
• Collaborating with the sector to enhance professional standards and competence.
• Sharing industry best practices and information on emerging criminal trends.
• Improving the Bizfile system to streamline user experience for CSPs.
• Shared Goal: ACRA and CSPs share the goal of securing Singapore’s reputation as a clean and trusted financial hub.

If your company needs help filing taxes for the year 2024, or requires assistance with Singapore incorporation, economy, banking, etc., feel free to call/WhatsApp us at +65 90612851 or email us at aceglobalacct@gmail.com. Alternatively, you may leave us a reply using our contact form below.

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