Money laundering offenses now include serious tax crimes
That's effective July 1.
With effect from 1 July 2013, the offences of tax evasion and serious fraudulent tax evasion under the Income Tax Act, and the offences of tax evasion and improperly obtaining refunds under the Goods and Services Tax Act have been designated as money-laundering predicate offences.
According to Rajah & Tann partner Francis Xavier, this action is part of a slew of measures Singapore is taking to strengthen its framework for international tax cooperation to combat cross-border tax offences.
The Monetary Authority of Singapore ("MAS") had earlier announced this change in a consultation paper titled "Designation of Tax Crimes as Money Laundering Predicate Offences in Singapore" issued in October 2012.
MAS had also proposed to implement a regulatory framework for financial institutions to apply existing anti-money laundering ("AML") measures such as know-your client checks, transactional monitoring and other control measures to identify money laundering of proceeds from serious tax crimes.
Prior to the new rule, Baker & McKenzie partner Edmund Leow noted that Singapore's main AML legislation is the corruption, Drug Trafficking and Other Serious Crimes (Confiscation of benefits) Act ("CDSA").
The CDSA makes it a crime to engage in the money laundering of benefits from a total of 417 predicate offenses, such as criminal breach of trust and dealing with the property of terrorists. However, tax evasion in itself is not one of the predicate offenses.