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Singapore stance
on bank secrecy puts EU trade deal in doubt
Vladimir
Guevarra
Dow Jones Newawires
14 Oct
07
http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=1870f28d-84b6-458a-97dc-e4d9de5ba425
Singapore
won't be changing its tough banking secrecy laws despite calls
from the European Union for more transparency, a decision which
could scuttle talks for a trade agreement between the
island-state and the E.U.
"We have no plans to change
these (banking secrecy) laws, contrary to the (Dow Jones
Newswires) report. They allow for the necessary transparency in
combating criminal activity, while safeguarding investors'
interest for safety and security," a spokesman for the
Monetary Authority of Singapore told Dow Jones Newswires Saturday
via email.
Dow Jones Newswires reported Thursday that some
members of Singapore's Parliament told their E.U. counterparts
last week that they are planning legislative changes on their
banking secrecy laws.
Among the changes sought by the E.U.
is greater exchange of information between Singapore and E.U.
countries on suspicious movements of money between the two
markets.
The affluent city's tough secrecy laws have
helped make it a growing private banking hub, but it also aims to
prevent any possibility of becoming a shelter for
money-laundering, especially with the opening of two
multi-billion dollar casinos in 2009 and its proximity to
countries that are battling terrorist groups.
The Monetary
Authority's response, which appears to contradict what the
Singapore MPs said to their E.U. counterparts, could spell a
delay - if not the end - of negotiations for a trade agreement
between Singapore and the E.U.
Without any change in
Singapore's banking secrecy laws, it's unlikely that Singapore
and the E.U. will sign a partnership and cooperation agreement
(PCA). Such a deal is seen as a building block toward a broader
free trade agreement (FTA) between the E.U. and the Association
of Southeast Asian Nations.
"At the moment, the
European Commission and Parliament would feel that we're not in a
situation, mostly specifically in regards to transparency and
banking secrecy laws, where we can reach an agreement. Without a
PCA, there is probably no FTA," Glyn Ford, a senior member
of the European Parliament, told Dow Jones Newswires
Wednesday.
Ford and his co-members from the European
Parliament's committee on international trade last week held
talks in Singapore with their Singaporean counterparts, headed by
Zainudin Nordin, chairman of the Singapore-Europe regional
parliamentary group.
"They (Singapore MPs) said that
they're planning legislative changes to deal with these issues.
They are looking at the matter, they realize it's a problem and
they want to join the fight against terrorism," Ford
said.
"They didn't give us a timetable but the clear
implication is we're talking about some kind of action within
months not years. The implication was that something will be done
prior to the opening of the casinos," Ford said.
Phone
calls to Nordin's office weren't immediately returned Saturday
and an email query wasn't immediately answered.
Stumbling
Block
The European Commission has been negotiating a
trade agreement with Singapore since 2005. "In our talks, we
got to a point where we were very close to an agreement. The one
stumbling block is over banking secrecy," Ford said.
But
in its statement, the Monetary Authority of Singapore said: "The
so-called "stumbling block" referred to in the article
relates to the question of withholding tax on customer savings
which the E.U. has sought to discuss with Singapore."
"The
Singapore Constitution does not allow us to collect taxes on
behalf of a foreign country," the MAS said.
However,
the MAS didn't say whether Singapore will look into changing its
Constitution to allow the levying of withholding taxes on E.U.
citizens.
The MAS also said that any allegation that
Singapore is a potential haven of suspicious money from
launderers and terrorists is "baseless".
"Singapore's
laws on banking confidentiality provide customers of banks the
right to confidentiality of information, but do not shield
criminal activity. We operate a rigorous regime against money
laundering and financing of terrorism which is benchmarked
against international standards," the MAS said.
In
the media briefing last week, Ignasi Guardans-Cambo, another E.U.
member of parliament who took part in the talks with Singapore
MPs, said Singapore needs to boost transparency in its financial
sector to avoid the possibility of attracting organized crime
given that it will soon open two casinos.
"It was not
us but the members of the Singapore assembly who spoke about
money laundering, saying that casinos will be set up in less than
two years. It was their comment and they need to have a legal
framework to prevent Singapore from becoming a money-laundering
place," Guardans-Cambo said.
"The big
money-laundering hubs in the world are disappearing and nobody
wants Singapore to replace them. And, of course, nobody is
accusing Singapore now, but that's a reality not only in terms of
financing of terrorism, but also in terms of organized crime,"
Guardans-Cambo said.
"We say that we don't think
there's money laundering going on here, but clearly people
engaged in money laundering are looking for places like Singapore
with low levels of transparency to actually engage in money
laundering," Ford also said in the briefing.
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