Hansard, Tuesday, 6 August 2024

1 Miss Rachel Ong asked the Minister for Sustainability and the Environment (a) whether the ban on formaldehyde in paints used for application on interior surfaces of buildings can be brought forward from 1 January 2026 and, if not, why not; (b) what penalties will be meted out for firms found to have used interior paint products with formaldehyde content exceeding the limit of 0.01% of the paint weight; and (c) how many households have filed complaints in the last two years regarding formaldehyde levels arising from renovation works.

2 Mr Edward Chia Bing Hui asked the Minister for Sustainability and the Environment (a) what measures are in place to ensure that imported wooden furniture that have been chemically treated and contain formaldehyde are safe for indoor use; and (b) whether the Ministry will consider implementing stricter import regulations or mandatory testing measures on imported wooden furniture to protect consumers from potential health hazards.

3 Mr Melvin Yong Yik Chye asked the Minister for Sustainability and the Environment (a) in the past five years, how many complaints has NEA received regarding high levels of formaldehyde in new furniture; and (b) whether NEA will consider regulating formaldehyde as a hazardous substance under the Environmental Protection and Management Act given that exposure to high levels of formaldehyde can lead to cancer.

4 Miss Cheryl Chan Wei Ling asked the Minister for Sustainability and the Environment (a) whether the Ministry conducts checks on companies selling building products to ensure that the products offered do not contain or emit formaldehyde; (b) whether the Ministry will consider requiring renovation contractors to show proof that indoor formaldehyde concentration levels are within limit when renovations are completed; and (c) what support can be given to owners of non-air-conditioned places such as residential homes to ensure that the concentration level of unwanted chemicals in the vicinity are within safe limits.

5 Dr Wan Rizal asked the Minister for Sustainability and the Environment (a) what steps are being taken to address health concerns related to formaldehyde emissions from wooden furniture in homes; (b) how is the Ministry monitoring and regulating the levels of formaldehyde in residential environments to ensure that they are within safe limits; and (c) whether there are plans to review and update existing regulations on indoor air quality and furniture safety standards to better protect public health.

Mr Speaker, may I take Question Nos 1 to 5 together?

Please go ahead.

Sir, my Ministry has been monitoring the issue of formaldehyde levels in indoor premises. Since 2020, the National Environment Agency (NEA) has received 19 feedback cases on formaldehyde levels arising from renovation works.

We announced at the Committee of Supply 2024 that we will introduce regulations on formaldehyde in interior paints. From 1 January 2026, interior paints with formaldehyde will not be allowed for sale in Singapore. "Formaldehyde in Paint" will be regulated as a hazardous substance under the Environmental Protection and Management Act (EPMA). Companies found importing, manufacturing, possessing for the purpose of selling or offering for sale in Singapore, interior paints with formaldehyde levels equal to or exceeding 0.01% weight in weight, are, upon conviction, liable to a fine of up to $50,000 or imprisonment for a term up to two years or both. NEA will carry out market surveillance and take appropriate enforcement action.

This implementation timeline strikes a balance between safeguarding public health and giving the industry sufficient time to adapt to the new requirements based on its feedback. In the meantime, interior paints with no added formaldehyde are already available in the Singapore market.

We recognise that apart from interior paints, there are products such as composite wood products and adhesives which may emit formaldehyde. NEA is actively studying this issue, including the review of international best practices, guidelines and regulatory requirements.

The furniture industry has made an effort to lower formaldehyde emissions. The Alliance for Action on Sustainable Spaces, jointly formed by the Singapore Business Federation, Singapore Furniture Industries Council (SFIC) and Singapore Green Building Council (SGBC) developed and launched a set of industry guidelines and recommendations to improve indoor air quality last year. Among other things, these guidelines recommend formaldehyde emission limits for products and furnishing used indoors.

We encourage the public to use products that are certified with the Singapore Green Labelling Scheme (SGLS) administered by the Singapore Environment Council, or the Singapore Green Building Product (SGBP) Certification Scheme administered by the SGBC. For wood products bearing these green labels, the formaldehyde levels are certified to be low or non-detectable, while interior paints certified with these labels are required to have no formaldehyde. The SFIC’s website also lists its member companies that have pledged to supply or adopt low or no formaldehyde products and solutions.

If products containing formaldehyde are installed in indoor spaces, occupants are advised to improve ventilation and promote air circulation by opening doors and windows where possible, as well as utilising fans and ventilation systems, which can help dilute the concentration of formaldehyde in those areas.

Mr Edward Chia.

Thank you, Speaker. I would like to ask the Senior Parliamentary Secretary two supplementary questions. He mentioned that NEA is conducting a review of formaldehyde treatments on wooden furniture. I just want to ask what is the timeline and what are the considerations, considering the fact that there is legitimate public safety concerns regarding formaldehyde in wooden furniture. So, timeline and the considerations of the review.

Second, in terms of public awareness, the Senior Parliamentary Secretary mentioned that there is accreditation by the Singapore Environment Council. How is NEA going to create more public awareness among residents who appoint small renovation contractors, how would they be able to know what are the products being used by renovation contractors?

Sir, as mentioned, we are reviewing what is being done in overseas jurisdictions. We are taking reference from them, learning from them to see how we can adopt these in Singapore. Like what we did for the formaldehyde controls in paints, we strike a balance between protecting public health as well as how the industry is able to adapt to the new requirements, because any changes may affect the industry and ultimately, consumers if they are not able to respond accordingly.

Sorry, what was the second supplementary question?

Public awareness on certified products.

Yes, okay. We will work with the various industry associations, those in the renovation or furniture supply sectors, to raise awareness amongst consumers. But when the law is implemented for "formaldehyde in paints", for example, that will be a law that does not allow the sale of such products. I urge consumers and the public to do more research, do some homework, especially when they are concerned with such products used in their home furnishings.

Miss Cheryl Chan.

I have got a supplementary question for the Senior Parliamentary Secretary. From now till when the official regulation is in place is still some time away. For home owners, they would not have a means to be able to detect formaldehyde levels because they would not know. As much as we want to raise public awareness, this is after all a chemical.

I just want to ask what recourse would these home owners or consumers have if they were being supplied this by the renovation contractors and are there other things that can be done more actively, because, today, all the actions that are taken are very reactive?

In the case of "formaldehyde in paints", there are already paint products available in the market that do not contain any formaldehyde. This would be something that consumers can easily check by looking at the details about the paint content. They should also question their renovation contractors or painters about what type of paint is being used. Based on the 19 feedback cases I mentioned earlier, a lot mainly dealt with cases of smell nuisance. When the home owners or in some cases employees in offices, they may find out and they will give the feedback, and usually, it is settled between themselves and the renovation companies.

In cases where people find the smell to be noticeable, the formaldehyde content will get diluted over time. So, it is quite common, like in newly renovated spaces, the smell would be more obvious, but with proper ventilation, the smell, which is also a proxy for the formaldehyde level within the product or paint, will get diluted to a level that will be more acceptable by the occupants of the premises. The advice is to ventilate and allow some time after renovation works are completed before the occupants move in on a permanent basis.

Mr Melvin Yong.

Sir, I thank the Senior Parliamentary Secretary for his answer. I declare I am the President of the Consumers Association of Singapore or CASE. Sir, in the first half of 2024 alone, CASE received 10 complaints regarding strong chemical odours emitted by new furniture, such as mattresses, sofas, wardrobes. Some consumers reported experiencing symptoms such as headache, dizziness and coughing after being exposed to what they suspect to be formaldehyde. I would like to ask would the Ministry consider regulating formaldehyde levels in furniture, in addition to, as the Senior Parliamentary Secretary said, for paints. Since that regulation has not come on board, can we include furniture as well in the regulations?

As what Miss Cheryl Chan had said, beyond what you can do after the furniture and renovation have been completed, I think what we can do is to go upstream and educate consumers on what are the furniture that have these levels of formaldehyde, so that they can make a considered decision on whether to purchase them or advise the contractors what they can use and what they should not use.

Sir, as mentioned in my reply, apart from paints, we are reviewing how the law could also apply to other products such as composite wood products and adhesives which also contain formaldehyde. Consumers or people undertaking renovation works should discuss with their contractors to demand that the products used meet these requirements. Also, if they are personally more concerned with such content, they should specify for products that do not contain formaldehyde.

There was a publicised case recently, which based on reports, we understand there was agreement in the end where the renovation company actually compensated the family to move out of their flat to give them a temporary accommodation. And in the end, there was some sort of court case or legal demand for them to dismantle and reinstate the affected furniture. So, these can be settled commercially. [Please refer to "Clarification by Senior Parliamentary Secretary to the Minister for Sustainability and the Environment", Official Report, 6 August 2024, Vol 95, Issue 138, Correction By Written Statement section.]

6 Ms Sylvia Lim asked the Minister for Home Affairs (a) whether the Government has a standard protocol of consulting the authorities of the intended receiving countries before proceeding with the deportations of foreigners convicted of offences in Singapore; and (b) in the case of a money laundering convict who was deported from Singapore to Cambodia in June 2024 and subsequently expelled by Cambodia after one month, what consultations did the Government undertake with the Cambodian authorities before deporting him there.

As regards whether the Government has a standard protocol of consulting the authorities of the intended receiving countries before proceeding with the deportations of foreigners, the short answer is that there is no such standard protocol.

As stated in my Ministry's reply on 2 July 2024, foreigners who are being deported can leave for any country to which their passports allow them to go. [Please refer to "Factors Considered in Deciding Deportation Destinations for Foreigners Who Have Served Their Sentences in Singapore", Official Report, 2 July 2024, Vol 95, Issue 137, Oral Answers to Questions section.]

The foreign country can, as a sovereign state, choose to allow entry or it can choose to disallow entry when the person arrives on its shores, or it can take subsequent actions to expel the person after entry. The way we treat these persons is no different from any other traveller. We do not consult the foreign countries beforehand as a general rule as to whether a traveller is allowed to go there.

As regards Ms Lim's second specific question, the general position is that we do not disclose specific discussions. Discussions may sometimes take place for operational security reasons, for intelligence reasons, other similar purposes.

[Deputy Speaker (Ms Jessica Tan Soon Neo) in the Chair]

But since this particular question seems to interest the Member of Parliament (MP), because she asked last month and followed up with several supplementary questions, and now, again. I will say no, we did not discuss with the Cambodians or the Cambodian authorities. But having made that position, for future, let me make it clear to MPs, the general position that my Ministry takes about discussions with foreign governments on deportations is that we should not be disclosing this. It is not in the public interest to disclose it because there are a variety of reasons why we may be in touch with foreign governments, and likewise, we may want people to be deported from foreign governments as long as the law allows it and we sometimes will not want that publicly disclosed upfront. Otherwise, others who are collaborating with such persons of interest may then get wind of it.

So, these are, sometimes, matters of operational security. But here, in answer to the question, no, we did not discuss with the Cambodians.

Ms Sylvia Lim.

Deputy Speaker, I have two supplementary questions for the Minister. First, I accept that there could be some operational considerations and not revealing too much information. So, I would like to say that upfront.

I would like to ask the Minister, because it was indicated in this House that offenders are permitted to indicate their choice of jurisdiction, to where they would like to be deported. So, my question is, is the Ministry concerned that the offender would tend to choose a jurisdiction which he considers to be favourable to him? By that, I mean that he might be concerned about possible prosecution for the predicate offences which led to the money laundering, for instance. Would that be something that the Government would take into account, that he may choose a jurisdiction that would actually facilitate his avoiding prosecution for certain other crimes that he may have committed overseas? That is the first question: whether the Government is concerned about this in giving the offender the choice.

Secondly, I wonder whether the Minister could confirm whether or not the choice of the deportation country is part of the plea bargain process.

Madam, on whether offenders can choose to go to where they want to go, we have said it several times. They can choose to go to where they want to go. The law allows them to go where their passports allow them to go to.

So, what we think about what will happen to them in the receiving country, whether it will be more favourable or less favourable, as Ms Lim will appreciate, is legally irrelevant and is not something that the Government can take into account.

Second, as regards the choice of deportation and whether that is part of the plea bargain process, again, strictly speaking, if the offender, the person who is asked to leave, can choose to go wherever he wishes to go to, then the relevance of it becomes small. I do not engage in plea bargains. That is a matter between the Attorney-General's Chambers and the defendant's lawyers. I cannot rule out that these discussions take place, but I can tell you what the legal position is.

Ms Sylvia Lim.

Thank you, Deputy Speaker. One further supplementary question. Earlier, the Minister mentioned that what might happen in the jurisdiction that is chosen is legally irrelevant. But I am just wondering whether he will agree with me that money laundering, being transnational in nature, that we would also like to be seen to be doing our part to ensure that the offenders face justice for whatever offences they have committed. So, as such, are we not interested in the likelihood of such offenders facing prosecution or being charged for any predicate offences that they may have committed overseas and to that extent, we should play our part as well?

Well, in the first place, they would have served time in Singapore if they have committed an offence here. Second, of course we are interested, which is why we are the chair of the Financial Action Task Force. We take this very seriously. But it is wishful thinking to think that every other country will take the same approach or that we can control how other countries can or cannot operationalise their legal position.

If the Member were to ask any country, they will all tell the Member that they take it very seriously. We should not be making those value judgments. However, rather than engage in this back and forth, Ms Sylvia Lim may be aware that we have amended our legislation last year such that once it is operationalised, which should be sometime later this year or next year, the law will allow us to decide where to send such a deportee. But the only consideration cannot be what we think of the different legal systems. There has got to be a multiple set of considerations.

7 Mr Liang Eng Hwa asked the Minister for Culture, Community and Youth (a) whether NTUC Enterprise's sale of its 51% stake in Income Insurance Ltd to a foreign insurance company will impact affordability and availability of essential insurance products to the broad mass consumers and small enterprise segment in the long term; and (b) whether there is social value for NTUC Enterprise to retain its controlling stake in Income Insurance Ltd so that the provision of insurance services remains inclusive and accessible.

8 Mr Leong Mun Wai asked the Minister for Culture, Community and Youth with the proposed majority stake acquisition of Income Insurance Ltd by Allianz Insurance, how will the Government continue to support the co-operative movement in providing Singaporeans with affordable essential goods and services in the future.

9 Mr Don Wee asked the Minister for Culture, Community and Youth regarding the potential acquisition of a majority stake in Income Insurance Ltd by Allianz Insurance, whether the Government will work with the National Trades Union Congress to assess the potential impact on (i) insurance coverage for lower-income groups and workers and (ii) Income Insurance Ltd's original social mission if it is acquired by a foreign-listed profit-driven commercial entity.

10 Mr Saktiandi Supaat asked the Minister for Culture, Community and Youth (a) whether MAS can provide an update on the sale of Income Insurance Ltd to Allianz Insurance, a foreign for-profit insurer; (b) what steps can MAS take to ensure that Income Insurance Ltd continues to provide accessible insurance products to Singapore citizens; and (c) whether companies set up with a social purpose and has performed a critical role in keeping prices affordable for Singaporeans should be designated by legislation as critical entities which require approval from the Government for ownership or control changes.

Mdm Deputy Speaker, Madam, may I have your permission to take Question Nos 7 to 10 in today's Order Paper as well as a Parliamentary Question (PQ) by Mr Christopher de Souza1 scheduled for a later Sitting, together please?

Please proceed.

Mdm Deputy Speaker, the Ministry of Culture, Community and Youth (MCCY) and the Monetary Authority of Singapore (MAS) have received several PQs on the National Trades Union Congress (NTUC) Enterprise's social mission and the Income-Allianz deal. Singaporeans have long recognised NTUC Income as a pillar of social support. It is, therefore, understandable that many Singaporeans are concerned about Allianz's plan to buy a majority stake in Income Insurance. I thank Members of this House for giving voice to these concerns through your many questions.

Allow me to, first, address the PQs relating to the social mission and the support given to co-operative societies, or co-ops, in Singapore, in my MCCY capacity. Minister Chee Hong Tat will, then, address questions relating to the regulatory aspects of the Income-Allianz deal in his MAS capacity. So, reserve your questions on the social mission for me, and then, later on, for the regulatory aspects for Minister Chee in his subsequent reply.

Mdm Deputy Speaker, co-ops remain an important pillar of our society and their work helps to strengthen our nation's social fabric. Co-ops are member-owned business entities that operate on the principles of self-help and mutual assistance. They address the common economic or social needs of their members or of the wider community. Some co-ops seek to provide goods and services at affordable prices for the benefit of their members and the community, while others seek to care for and serve the vulnerable within our community.

Mdm Deputy Speaker, the Government appreciates and values the role of co-ops and social enterprises in Singapore. We will continue to support the co-operative movement to ensure that Singaporeans' economic and social needs are met and that these goods and services remain affordable and of good quality. We have done so in a few ways.

First, MCCY has amended the Co-operative Societies Act twice within the last seven years, as part of our efforts to update our regulatory requirements to better support co-ops' formation, operations and development. In fact, I took Parliament through the latest amendment in April 2024, where one of the key amendments was to provide co-ops the flexibility to tap their reserves to pay dividends to their members. MCCY will continue to review our policies to ensure that they remain relevant and effective for our co-op sector.

Second, MCCY works closely with the industry body, the Singapore National Co-operative Federation (SNCF), to provide resources and training opportunities for our co-ops. MCCY and SNCF will continue to review the relevance of these training programmes and provide additional ones to our co-op sector to address current and emerging needs, where needed.

Third, the Central Co-operative Fund (CCF) has provided various grants to assist co-ops in their development. CCF disbursed about $2.7 million in grants to our co-ops over the last five years, including startup funding for new co-ops and grants that co-ops can use to address their emerging threats, risks and needs. These grants are reviewed from time to time to ensure that they remain relevant and useful to co-ops.

Mdm Deputy Speaker, the Government values the role played by NTUC and its enterprises. NTUC Income was established in 1970 with the founding premise of providing Singaporeans, especially underserved workers, with essential, affordable insurance. At the time, most of our workers, particularly from our Pioneer Generation, were uninsured. Through NTUC's affiliated unions, Income provided these workers with much-needed insurance protection at an affordable rate.

But social enterprises must, themselves, be sustainable. If a social enterprise cannot sustain itself financially and Government subsidy is needed to prop up the entity, then we will have to consider whether such a service ought to be provided by the Government. Taxpayers must also be prepared to pay their share of taxes to fund the service.

There are areas like preschool and skills training where the Government has a framework to provide funding to selected operators to deliver affordable services. Where such a framework exists, then the Government has appointed social enterprises, like the NTUC First Campus and NTUC Learning Hub, given them funding support and worked through them to provide the services.

But insurance is different. The insurance market is very different now, compared to when Income was first established in 1970. It is, now, a very competitive market, with many options available to Singaporeans. The Government has also significantly strengthened our social support system. Public healthcare is heavily subsidised. We have MediSave for Singaporeans, MediShield Life offering universal protection against large hospital bills and MediFund as a medical safety net for those with financial difficulties. We also have a universal retirement annuity scheme with CPF LIFE.

So, Income has to operate in this new environment. In fact, the premiums for several of Income's schemes are not the cheapest in the market. Besides competitive pressures, there are also regulators, like MAS and the Ministry of Health (MOH), who ensure that policyholders' interests are protected. Minister Chee will cover this in his reply.

The point is that Singaporeans, including lower-income workers, are well-served by our national insurance programmes and our competitive and well-regulated insurance industry. All these provide Singaporeans with wider choices and better value in insurance services and products.

NTUC has explained the reasons for the deal with Allianz. Let me briefly reiterate the points that NTUC has made. The current situation for Income cannot be sustained and Income's capital buffers have repeatedly come under pressure. NTUC Enterprise has supported Income with capital injections and will continue to do so. But NTUC Enterprise cannot do this on its own. That is why Income sought to corporatise in 2022, so that it could consider more options to access more capital.

Questions have been raised about the corporatisation exercise. When this was surfaced to the Registry of Co-operative Societies (RCS), RCS had advised all parties that this was a matter for NTUC Income and its members to collectively determine and resolve. What was important was the need to be upfront and transparent about the arrangements and to allow Income's members to decide whether or not to proceed with the corporatisation. We note that Income had done so. Eventually, members voted overwhelmingly in favour of corporatisation. And from a regulatory perspective, therefore, RCS is satisfied that due process was followed.

Mdm Deputy Speaker, NTUC has stated its preference was to keep a majority stake and also, local ownership. Majority stake, local ownership. But Income was unable to find a willing partner. Hence, Income assessed that the deal with Allianz provides the best alignment of interests.

I can understand why many Singaporeans are concerned that the partnership with Allianz may impact Income's social objectives. As I have explained, we need to first appreciate that Income, today, operates in a very different competitive and regulatory environment. Allianz has committed to honour Income's existing policies; participate in national insurance programmes; and continue its charity commitments, including the pledge of $100 million over 10 years from 2021 to provide social mobility among the lower-income and support the well-being of seniors.

NTUC and Income have also given their assurance to keep premiums affordable for Income's low-cost schemes for its members. In fact, NTUC's Secretary-General has put out a statement yesterday, re-affirming NTUC's full commitment to its social mission.

On Mr Saktiandi Supaat's question, the Government has introduced the Significant Investments Review Act, or SIRA, safeguards, to designate entities that provide a critical function to national security interests. Companies that provide a "social purpose" will not meet this high bar.

In fact, many companies in Singapore will want to do well and to do good at the same time. It will not be feasible to legislate and prevent ownership changes in all of these companies. Ultimately, the best way to keep prices affordable is to facilitate competition, ensure options for customers and put in place a sound regulatory framework. And that is what the Government is committed to doing.

Before I take questions, Minister Chee, will you be covering for MAS now? Later? Alright, Mr Liang Eng Hwa.

Thank you, Mdm Deputy Speaker. Madam, the crux of the matter here is that we expect entities under the NTUC Enterprise to not only do well, but also to do good, such as offering affordable and inclusive insurance to the mass consumers as well as to the underserved. This has always been ethos and mindsets of the management and board of NTUC entities.

So, my first question to the Minister of State is with NTUC Enterprise ceding control of Income to a foreign company, how is NTUC Enterprise able to ensure that the acquired company, which will be foreign-owned now, will be able to continue to do good, like what they have always done before. And if the acquired entity is no longer able to do as much good, will the Government be prepared to step in to plug the gap?

My second question is, in Singapore's context, entities that run as social co-operatives have always been an added and valuable instrument for the Government to do some of the public good, such as helping to stabilise inflation, to manage cost of living and launch more affordable, inclusive products, whether it is healthcare, childcare, groceries or insurance. So, my second question is, in the light of this sale of Income and its earlier corporatisation, do

social co-operatives still have a role in our society?

Madam, I thank Mr Liang Eng Hwa for his supplementary questions. I can understand why and, in fact, there have been many questions with regard to if NTUC had only a significant ownership in the proposed deal, whether NTUC and Income Insurance can fulfil its social mission.

I think if we take a step back, the reasons why Income has gone into this proposed deal is well laid out. There are realities on the ground – competitive, Government stepping in to provide that social assurance, as well as the capital requirements. The capital buffers, for example, were under pressure. So, that is the first principle.

In this new proposed deal, NTUC as well as Allianz has made assurances. I have outlined these assurances in NTUC's statement, that it will continue with the two schemes, NTUC Gift and Income Insurance's "LUV Life Insurance", and to keep these premiums affordable for policyholders, especially for the low-income segments. And NTUC has stated publicly that Income will uphold this commitment.

NTUC has also stated publicly that NTUC's social mission will not change. On its part, Allianz has also said that the proposed deal will not affect the current policy and they will continue to uphold the pledge to disburse the $100 million over 10 years, from 2021.

Ultimately, this is something that NTUC, Income and Allianz, if the proposed deal goes through, they will have to decide together, but Income Insurance will have board members, they will have substantial share in this and they will work together with this proposed entity to fulfil that mission.

On Mr Liang Eng Hwa's second question, there are a variety of social enterprises, co-ops, many of which many Members know about. For NTUC, there will be a huge portfolio of enterprises, be it in insurance, in childcare and eldercare, supermarket, skills' training, many that I have outlined.

The co-op sector, social enterprises continue to play a very, very important role to provide affordable products that particularly those that are vulnerable and are low income will continue to enjoy. I think that is not just NTUC, but the whole slew of the co-op sector which we have been supporting. And I have shown how we have been supporting them – with training, with grants and also with tweaks in the Co-operative Societies Act. We will continue to support them because we value them and we know that they are a huge value to society.

Mr Leong Mun Wai.

Thank you, Mdm Deputy Speaker. May I first declare that I am an independent director of a life insurance company registered and operating in Singapore. I have three supplementary questions for Minister of State Alvin Tan.

My first question is, although he has touched on the assurances that Allianz has given for the deal, but I would still like to ask whether Allianz has given a commitment in writing to allow Income to continue its social mission. If yes, is there a time limit to their commitment? If no, would he agree that NTUC or NTUC Enterprise, has no basis to give the assurance that Income's social mission will be continued? Because after all, if you sell a majority stake to a private company, you cannot have that assurance given to Singaporeans for the very long term.

My next question is whether the Government actually continues to view NTUC Enterprise and Income as social enterprises or private companies. Because Singaporeans are confused that NTUC Income's CEO, Mr Andrew Yeo, had stated two years ago, that the corporatised Income will remain an NTUC social enterprise, while NTUC Enterprise Chairman, Mr Lim Boon Heng, has just implied in a recent interview that Income should be treated as a private enterprise and thus, we should not interfere in this transaction.

My third question is, if the Government continues to view NTUC Enterprise and Income as social enterprises, is it not in the interest to intervene in this transaction to ensure that Income continues to be majority-owned by Singaporeans, so that the social mission of Income will not be affected? After all, NTUC Enterprise is a co-operative set up by NTUC and affiliated unions, and the Singapore Labour Foundation – which is a Statutory Board of the Ministry of Manpower – has been providing funding to NTUC over the years.

Mdm Deputy Speaker, I thank Mr Leong Mun Wai for his questions. First, I want to say that Income's social mission has already evolved. It only offers two low-cost options right now, and the other products have competitive options and are well- regulated.

But allow me to also, as I answer his questions, take a step back, because he has questions about Allianz's commitment in writing, social enterprise and private companies. I have answered the second one.

And then this other question, with regard to the social mission. I have explained and in NTUC's statement, it has already said that Allianz is committed to honouring Income's existing policies, participating in national insurance programmes, continuing its charity commitments, also including the pledge of $100 million over 10 years.

But Mdm Deputy Speaker, maybe I can take a step back, to again remind Members here why. Because the questions have been: "Why sell?", "Why sell to foreign owners?" and "Can NTUC continue to fulfil its social mission?" I think that is the crux of Mr Leong Mun Wai's question.

Let me also state that the reasons why these questions arise. And I think Mr Leong Mun Wai has also expressed that, as well as others who have asked the questions: why is this such an emotive topic? This is an emotive topic because Income is special to all of us. For many years, since 1970, it is a trusted brand, it is a brand that Singaporeans identify with, it is a brand that Singaporeans trust.

And for many of us, that is our first policy. For example, if you go to National Service, it was your first policy. And that is why this is something which we all care about and care about deeply, and all Members do so. Can I also just say that because it is something we care about, we all want the best for NTUC Income, we want the best for Singaporean policyholders, we want the best for Singapore. And therefore, you have raised these questions.

But there are different views about this on the ground, there are different views about this in the House and there are also different approaches to how NTUC Enterprise, as well as Income, will have to deal with the realities on the ground.

And so, the question is whether NTUC Enterprise and Income's approach is the right one. Because that is what the discussions have been publicly – whether NTUC Enterprise and Income's approach is the right one.

Time is the best judge, but let me, again, put it out very clearly, that, number one, Income's capital buffers have been under pressure. There is no doubt about this. And in fact, if you think about the insurance industry, there are also other insurance companies and financial institutions who have gone through repeated financial crises – be it the Asian Financial Crisis, the Global Financial Crisis, SARS or the COVID-19 pandemic that has just passed – where they have been unable, for example, or have faced challenges to adhere to capital adequacy ratios and solvency standards. And therefore, NTUC Enterprise had to put in capital injections of up to, it is publicly known, about up to $630 million. But it cannot do so alone and it cannot do so in perpetuity. So, that is one, the financial capital adequacy that is the reality that Income faces.

The second reality is that, both in the private insurance market as well as the public insurance market, the landscape has changed. In the public insurance market, the Government, over time, has stepped in, provided very comprehensive healthcare, comprehensive insurance, and therefore, that it has become more competitive for Income.

On the private space, because we have a well-regulated insurance industry, with a whole variety and suite of options for Singaporeans to choose from, Income also finds itself in that competitive space. So, this is why. These are the rationales which they have articulated and these are the realities.

Then, it also begs the question, could Income and NTUC Enterprise then have looked for other funding sources, which is the question on the ground. They have. In their statements, said that they have. They have looked at financial institutions and non-financial institutions, locally and foreign. They have also tried their very best, as they had mentioned in their statement, and they have said their preference is that they want, ideally, the deal to be majority-owned and, ideally, for it to be locally.

So, they have tried. And make no mistake about that, they have tried, which is an answer to many of these questions that are floating on the ground. But after having tried so many of this and being cognisant of the fact of the challenges on the ground, they said "Allianz has the best alignment with NTUC Income."

What is the purpose for that then? It is not just to address all of the challenges which I have lined up, the capital side and the competitive side, but it is also one central reason why they do so. That is a long-term view to protect Singaporeans for the long term.

Because right now, these challenges are apparent in the near term and the medium term. But insurance is a long-tailed business, as the Members would know. And if you can fulfil your liabilities now, all well and good. But if you are unable to fulfil your liabilities 50 years down the road, then who picks up the tab?

So, we can have a very good debate about the approaches. I think this is what we are trying to do. Ultimately, time will tell. It is a judgement call. That is what leadership is. That is what a judgement call is and that is what I think is already stated clearly. What NTUC Enterprise, Income Insurance have already stated very, very clearly. So, I thought that this is very useful for us to put out there, so that all Members are very clear.

Mr Leong Mun Wai.

Thank you, Madam. I would like to further ask the Minister of State about what he has just mentioned. I think this whole debate today is that we want clarity. What the Minister of State has mentioned is that the social mission of Income is no longer a very important part. Because he mentioned that currently, there are only a few policies with regard to that.

That may be the case. But, however, social mission also means intact. Maybe today, the condition of the market, Income does not need to do that much on social mission, but it gives Singaporeans a sense of security that we always have a life insurance company there, protecting us. Just like we seek comfort in the fact that FairPrice is always there. FairPrice is no longer the cheapest in Singapore, we know. But when there is a food crisis, we have FairPrice. So, we are also talking about the long term.

Mr Leong, please ask your question.

Yes, so my question is, first of all, does the Government admit that they are only going to concentrate on the capital adequacy of Income and disregard the social mission? This is the first question. Secondly — okay, maybe the Minister of State can answer that first.

Mdm Deputy Speaker, I think many other Members also have questions, but I have already articulated to Mr Leong Mun Wai. There were quotes by some of our founding leaders. Let me quote Dr Goh Keng Swee. Dr Goh Keng Swee firmly stressed the key principles for co-ops. He said that co-ops must be competitive, it must be financially sustainable, receiving no privileged treatment from Government. He concluded that a bankrupt co-operative will be of no use.

And I have already outlined why NTUC had done its homework and really wanted to make it as majority-owned as possible and locally-owned. I have already outlined this.

If Members were to take one step back and look at NTUC, and look at its social mission, many of us here are advisors to NTUC unions, we have worked very closely with them. I work very closely with my union's Singapore Industrial and Services Employees' Union (SISEU). I work very closely with the co-ops under SNCF. I meet them very regularly.

But let me put to the Member, Mdm Deputy Speaker, NTUC's history. These are proof points that the social mission remains true. These are the proof points that in crises and in peace time, NTUC remains true. Since its founding in 1961, NTUC has protected and uplifted workers' lives and livelihoods. You meet the workers, they will tell you. We were just there, at the SISEU convention recently. They have kept true to its mission. And since 1969, the Labour Modernist seminar 55 years ago, NTUC has continued to care for workers and families.

More recently, on the social mission, NTUC has worked to raise wages of our low-wage workers through the Progressive Wage Model – again, a social mission, focused on workers, because every worker matters. Then, during COVID-19, it was a lifeline for workers, with the Job Security Council. And throughout the years, throughout the decades, NTUC and the NTUC social enterprises have contributed over $300 million to various charity programmes.

So, NTUC has shown time and time and time and time again, since its founding, since NTUC Income's establishment in 1970, that it has continued its social mission and it has continued to, not just talked about it, but fulfilled the social mission. But it has to be responsible, it has to look long term. It has looked at its books, it has looked at the external environment and it has done its homework, and that is why it is doing what it is doing now.

And it has made commitments, which I have stated in NTUC's statement and Allianz has also made its statement as well. And so, Mdm Deputy Speaker, time will tell whether this approach is right, but if you think about this, it is very clear that all of these things have been lined up quite clearly.

Mr Saktiandi Supaat.

Thank you, Mdm Deputy Speaker. I thank Minister of State for answering my PQ. I have one supplementary question, a somewhat similar question as that asked by the Member Mr Leong.

In terms of co-ops playing a role, it is very significant. My question is that, in terms of market failure, issues that have been addressed in the past, I think market failure in the insurance industry in the past, has been addressed somewhat like what Minister of State has mentioned.

So, my question is a bit more technical – it is about governance structure of the new entity. If the Minister of State can share, whether there is any reassurance beyond what he has mentioned, from Allianz, in terms of commitment, whether there are any control measures from the governance structure, going forward. And not just for this case, but future cases, for changes or acquisition of co-ops going forward as well, in terms of the legislation.

Madam, it is still a proposed deal, yet to be approved. But in public, the structure of the deal is that NTUC Enterprise, up to 49%, and it is a significant shareholding, and Allianz, 51%. So, NTUC Enterprise will have a significant say in how this proposed new entity will run and they have already publicly made very clear statements, on both sides, both NTUC Enterprise, Income, as well as Allianz, about what they will do should this deal progress.

I do see a few hands coming up, but I do want to allow for those who have filed PQs, to be able to ask their questions. So, I am going to move on to the next related PQ. And then, I will open it up for supplementary questions. Mr Ang Wei Neng.

11 Mr Ang Wei Neng asked the Prime Minister and Minister for Finance (a) whether MAS will be working with the Competition and Consumer Commission of Singapore to scrutinise the planned purchase by Allianz Insurance of a 51% stake in Income Insurance Ltd; and (b) whether MAS will take into consideration of the ability for Income Insurance Ltd to continue fulfilling the social mission of providing affordable insurance plans to Singaporeans after the acquisition by Allianz Insurance as one of criteria for approving the acquisition.

12 Mr Yip Hon Weng asked the Prime Minister and Minister for Finance (a) whether MAS is aware of the key considerations behind the planned acquisition of Income Insurance Ltd by Allianz Insurance; (b) if so, what are they; (c) what is MAS’ assessment of the impact of the acquisition on (i) the availability of existing and future insurance products that were designed for social good and (ii) the options available to Singaporean consumers and SMEs; and (d) whether MAS is aware if Income Insurance Ltd’s mission as a social enterprise will be preserved post-acquisition.

13 Ms He Ting Ru asked the Prime Minister and Minister for Finance (a) what is MAS’ assessment of the impact of the planned acquisition of Income Insurance Ltd by Allianz Insurance on the social mission of Income Insurance Ltd in providing affordable and well-structured insurance products for Singaporeans; and (b) what avenues and measures are available for Income Insurance Ltd policyholders to allay their concerns about the balance of interests shifting in favour of the new potential shareholder.

14 Mr Mark Lee asked the Prime Minister and Minister for Finance (a) whether the sale of a majority stake in Income Insurance Ltd to Allianz aligns with the Government’s strategy to build national champions that can compete globally; (b) if so, how; and (c) what measures will be implemented to ensure that Singapore (i) retains control over strategic national assets in the insurance sector (ii) safeguards the interests of local policyholders and stakeholders and (iii) balances the benefits of foreign investment with the need to develop and support homegrown companies.

Mdm Deputy Speaker, may I have your permission to answer Oral Question Nos 11 to 14 and Written Question No 3 in today's Order Paper together, regarding the proposed deal between Income Insurance Ltd and Allianz Europe BV?

Please proceed.

Thank you, Madam. My reply will also cover Parliamentary Questions (PQs) on the same subject matter which several Members have filed for subsequent Sittings.

Madam, the Ministry of Culture, Community and Youth (MCCY) has just replied to the PQs pertaining to Income's social mission and NTUC Enterprise's reasons for entering into this proposed deal with Allianz. I will focus on the following areas from Monetary Authority of Singapore's (MAS') perspective as regulator of the insurance sector.

First, how would MAS assess the proposed deal for regulatory approval and did the deal involve any conflicts of interests? Second, would the proposed deal affect Singaporeans' access to affordable insurance products? Finally, what will be the impact on Income's existing policyholders and employees?

MAS' primary role as regulator is to promote a sound and progressive financial sector. For the insurance sector, we want insurers to manage their risks well so that policyholders are assured that their long-term policies are safe and will be adequately protected.

When MAS assesses the application for a change in substantial shareholder in an insurer, we will consider a range of criteria, in particular, the applicant's track record, financial soundness, reputation, as well as fitness and propriety. For example, we will assess if the proposed shareholder has the financial capacity to support the insurer when needed, coupled with the willingness and ability to ensure that the insurer's operations are well-run. The insurer must also have effective risk management systems and controls so that it can continue to meet its obligations to policyholders for the long term.

For the boards of major licensed insurers, including Income, MAS requires the majority of board members to comprise directors independent of the shareholders, management and business relations. Board appointments are also subject to MAS' approval. When assessing an application, MAS' considerations include the background, skillset and experience of the applicant.

With regard to Mr de Souza's question on the management of conflicts of interest, MAS had reviewed and was satisfied with the relevant processes Income's board had put in place to address conflicts of interest with respect to the appointment of its financial advisor on this proposed deal and the decision to enter into the deal with Allianz. In the appointment of the financial advisor for the deal, the Chairman of Income's board had recused himself. The decision to enter into the deal was made by the board, comprising a majority of independent directors.

Madam, fostering a competitive insurance market with financially strong insurers is a key part of MAS' approach to ensuring that insurers operate sustainably and serve the public well. We believe that a competitive market is the most effective way to meet the insurance needs of Singaporeans and facilitate access to affordable insurance options and good service over the longer term.

Allianz is one of the largest insurers globally, although it only has a small retail and small and medium-sized enterprise (SME) insurance presence in Singapore today. Allianz Insurance Singapore Pte Ltd is ranked 14th in general insurance with a market share of 2% based on written premiums. There is no significant overlap between Income and Allianz's overall insurance business in Singapore and hence, there is no concern about adverse impact of the proposed deal on competition in the sector.

The insurance market in Singapore is highly competitive. There are currently more than 50 direct insurers in Singapore offering a wide range of insurance products to meet the insurance needs of individuals and businesses. In both life and general insurance, Income has market shares of less than 10% based on written premiums. For many insurance products, Income does not always offer the lowest prices compared to other insurers.

Take life insurance as an example. A check on CompareFIRST, an online portal that allows consumers to compare life insurance products from various insurers, shows that the most competitive rates for Direct Purchase Insurance Term and Whole Life products, include a mix of local and foreign insurers.

With regard to Integrated Shield Plans (IPs), the Ministry of Health (MOH) helps to exercise regulatory oversight over the IP insurers and they have to seek approval from MOH for changing IP premiums or terms and conditions. MOH also publishes a comparison of indicative lifetime premiums and coverage across different IPs. There is strong competition in the IP market, with each insurer offering plans for different levels of coverage to the public and it is not dominated by any single insurer. Income's IPs are also not the cheapest in the market for most categories.

Finally, I would like to address the impact on Income’s existing policyholders and employees. Madam, we understand their concerns. Like many hon Members here in the House, I too have residents from Bishan-Toa Payoh who are existing policyholders and employees of Income.

Should the proposed deal be approved, there will be no change to the terms and conditions of existing insurance contracts. MAS expects Income to fulfil its obligations to all policyholders under the terms of its existing insurance contracts. I note that Allianz has also publicly stated its intent for Income to continue to honour the terms of the existing policies underwritten by Income and ensure a seamless transition with no impact to existing policyholders. MAS will hold Income and Allianz to account to these commitments.

In addition, MAS has regulatory requirements and guidance in place for insurers to maintain sufficient capital reserves, put in place robust governance and risk management frameworks, and also to treat their customers fairly.

For participating policies where policyholders share in the profits of the participating fund, MAS protects the interests of policyholders by restricting the ratio of profits allocated to shareholders and the type of expenses insurers may charge to the participating fund.

And with regard to employees, MAS does not regulate employment decisions of financial institutions (FIs). However, we expect all FIs, including Income, to treat their employees fairly and to fully comply with the Ministry of Manpower’s (MOM's) employment laws and guidelines.

To conclude, Mdm Deputy Speaker, MAS encourages all insurers, both local and foreign, to continually innovate, adopt best practices and ensure robust risk management. This will foster a competitive insurance market that offers choice, value and stability to protect the interests of policyholders.

Mr Yip Hon Weng.

Thank you, Mdm Deputy Speaker. I have two supplementary questions for the Minister. Given that the acquisition involves a very well-established social enterprise, what considerations did MAS take into consideration regarding the potential shift in corporate culture and mission alignment post-acquisition?

And secondly, looking ahead, how does MAS plan to monitor and evaluate the long-term outcomes of this acquisition in terms of social impact and financial inclusion?

Mdm Deputy Speaker, I believe I have addressed those points in my main reply, but let me just reiterate the key messages. So, first, as regulator, MAS will look at the interest of the policyholders. For the existing policyholders that have existing insurance contracts with Income, we will hold Income and Allianz to their commitments that they have both made to ensure that the terms and conditions of the existing insurance contracts will have no change. So, therefore, this is the way to protect our existing policyholders.

For the other commitments that NTUC, NTUC Enterprise as well as Allianz have made, I think my colleague, Minister of State Alvin Tan, shared some of these earlier in his reply, referring to the statements made by NTUC Enterprise and also by NTUC. I think these are the assurances given by the shareholders and also by NTUC, that its social mission will not change and that it will continue to look after the well-being, especially of the lower-income policyholders.

For MAS, our belief is that the best way to protect our policyholders, whether existing or future, is to have a competitive insurance industry. And insurers, which are well run, will then provide stability over the longer term and offer choice of options and offer competitive rates to policyholders. Then, from a policyholder's point of view, you can choose which insurance product best suits your needs, which insurance product would actually be most competitive for you.

So, choice and stability bring greater value to policyholders, and this is best done through a competitive insurance market.

Mr Ang Wei Neng.

Thank you, Deputy Speaker, and thank you to the Second Minister for Finance for the comprehensive reply. Can I ask supplementary questions to the Minister? What is the time frame for assessing and approving the deal proposed by Income and Allianz? And secondly, what is MAS' assessment of the current Income's financial viability and stability vis-a-vis the rest of the insurance companies in Singapore, particularly, the life insurance companies in Singapore? And, thirdly, can I just clarify again that when MAS evaluates whether to approve the deal, it is looking more at financial viability as well as protecting existing policyholders, rather than whether Income and Allianz will fulfil their commitment to provide affordable insurance to the policyholders?

Mdm Deputy Speaker, the proposed deal is subject to MAS' regulatory approval. So, MAS would have to go through the details, get the information and there is a due process for this. I would not be able to give the Member a specific timeline because I think what is important is that the process is done in a rigorous manner and in a comprehensive manner.

The second question that the Member asked, Mdm Deputy Speaker, is with regard to how we will assess, if I understood him correctly, the longer-term viability and the financial viability of Income. I think this has been explained by both NTUC Enterprise and also by NTUC that even though at the moment, Income is able to meet its commitments, insurance is a business that has a long tail. So, whether Income would, in the future, continue to be able to remain competitive, continue to be able to meet its obligations, I think, those are the questions that are also important. So, it is not just ensuring that Income is able to meet their obligations now. I think, collectively and not just MAS, all of us, we want Income to do well, so that they can do good. We want Income to be able to meet its obligations, not just now, but also into the future, so that is not only now that they are able to fulfil their social mission, but also in the future, they are also able to continue to fulfil their social mission.

So, that is what NTUC has said; they want to retain the social mission. They do not want that to change. But the best way to enable them to continue to fulfil their social mission and to fulfil their social mission more effectively is to have a strong Income. As NTUC has shared in their statement, with Allianz coming into this proposed deal, they would now have two strong supporters, two strong shareholders. Instead of only relying on NTUC Enterprise, they also could tap on the resources and the networks of Allianz.

MAS focuses on what is in the best interest of our policyholders because as regulator for the insurance sector, that is a key target group for us. Speaking not as Second Minister for Finance, but speaking as an MAS board member, that is how MAS will assess this from a regulatory approval point of view. And I have explained earlier in my response to Mr Yip why I believe that ensuring a stable insurance sector, a competitive and vibrant insurance sector, is the best way to benefit policyholders.

Ms He Ting Ru.

Thank you, Madam. I have three supplementary questions on this. The first would be in relation to governance and controls. First, I know that Allianz settled a criminal case in the United States (US) two years ago for around US$6 billion over allegations that it defrauded investors, and its US subsidiary pleaded guilty to criminal securities fraud and agreed to pay fines and make restitution to investors. Did MAS look into this and also is MAS then therefore satisfied that corporate governance and controls have been strengthened and that there are no residual concerns? Because after all Income serves 1.7 million Singaporeans with a significant market share in areas such as motor insurance, about 20%, in property and also health, roughly around 15% for each of those.

My second supplementary question relates to a point made in the Allianz announcement. In the announcement, it said, and I quote, "Allianz and the offeror intend to undertake a strategic and operational review of the company and its subsidiaries with a view to enhancing the value of existing businesses, operating the company in a more capital-efficient manner." And then, further on, it states, "Pending the outcome of such a review, Allianz may make changes to the operations and businesses of the company and its subsidiaries".

I note that there are approximately 1,900 employees of Income at the moment and, having worked on a number of acquisitions, I note the standard for discussions to be had between parties about streamlining operations, possible redundancies and sometimes certain undertakings are made about continued employment for a certain amount of time, particularly for key officers. However, it is natural that existing staff, especially those who are more junior, would be concerned and wonder whether and how they would be supported through this.

Given the above, is the Government or MAS aware of any discussions being made about possible job losses or will MAS consider if any guarantees should be made and sought from Allianz about existing employees, about their employment situation and would this form part of the MAS regulatory assessment and ultimately, decision whether or not to approve the transaction?

And finally, if I may, on the point about the financial sustainability of Income, I note a report that was published in December 2023 by Zero One Research, where it notes that the capital adequacy ratio of Income Insurance was roughly as 193% under the Risk-based Capital framework, called the RBC 2 framework, and this was based on reported data. This exceeds, by a wide margin, the minimum required level of 120% under Singapore's Insurance Act. [Please refer to "Personal Explanation", Official Report, 9 September 2024, Vol 95, Issue 140, Personal Explanation section.]

So, my question is, could I get some clarity about why are there concerns about Income's unsustainability as a business, given this healthy buffer?

Mdm Deputy Speaker, I thank Ms He Ting Ru for her three questions. Let me start off with the first one about the case against the Allianz Global Investors in the US.

Madam, the Allianz Global Investors is a US entity under the Allianz Group and this structure, this entity is not directly linked to the entity that will be entering into a deal, this proposed deal, with Income. The product that got into trouble with the US regulators, the Allianz entity that is in Singapore, they did not manage and they also did not offer similar funds, like this fund that got into trouble, which is called the Structured Alpha funds. The investigation by the US Department of Justice on Allianz Global in the US also did not reveal that any other entities within the Allianz Group, including the entity here in Singapore, were aware or had participated in the misconduct. So, I hope that addresses the question that Ms He raised.

Ms He's second question, with regard to the announcement by Allianz that they intend to do a review of their operations and see how they can deploy capital and also streamline their operations, I think that is to be expected, that every time you have a merger, you have a corporate restructuring, whether it involves another party or it is done internally, we are always looking for ways to work more productively and to become more efficient. Whether that then translates into what Ms He was concerned about, which is job losses, I think let us not jump too far ahead. They have not even entered into the proposed deal yet. It has not been approved yet. It is a bit too early, a bit too premature to start to talk about whether there will be job losses.

But as I mentioned earlier in my main reply, in response to a question that Ms Foo Mee Har raised, because I know Ms Foo is also very concerned about our workers and wanted to make sure that their interests will be protected, the MAS does not directly regulate employment practices of FIs. This is not just for Income, this is across all FIs. But we do expect our FIs to comply fully with the MOM employment laws and guidelines. If the workers are not treated fairly, that is where MOM and NTUC will be able to come in and help to speak up for our workers, just like what NTUC has done in previous cases. Where there are job losses and the workers were not fairly treated, NTUC will step forward and fight for our workers, so that we give our workers a fair deal.

As I qualified earlier, this is too early for us to talk about that. In Chinese, they say, "八字都还没一撇". You have not even completed the deal. Therefore, it is too early for us to start talking about some of these potential downstream issues.

The assurance I want to give to the Member and also to our workers is that we expect Income and Allianz, we expect the entity to treat its workers fairly and to comply fully with the MOM employment laws and guidelines.

To Ms He's last question, I would like to go back to what Minister of State Alvin Tan mentioned earlier in his reply, which is why NTUC Enterprise had to inject additional capital into Income. Maybe the healthy state of what Ms He has seen being reported, is the outcome of NTUC Enterprise injecting additional capital into Income.

As I also mentioned earlier in my response to Mr Ang, this does not mean that in the immediate moment, at the immediate point in time, Income is having a problem with its finances. That is not the case. But we know insurance is not a just here and now business, it is a long-term business with a long tail. How do you ensure that over the longer term, you are stronger and better able to meet your obligations and to protect the interests of your policyholders – both the existing policyholders and also new policyholders that you may take on later on. This is best done when you have a stronger insurer.

Ms Foo Mee Har.

Thank you, Deputy Speaker. I thank the Minister for the many assurances of holding Income and Allianz accountable to their commitment for this deal. It is also comforting to hear NTUC also weighing in to give their commitment.

I think what is in many people's minds is that with a minority shareholding, what would be MAS' regulatory powers? In specific details, how are they going to exercise that to make sure that the interests of policyholders are safeguarded? The Minister did touch on the composition of the board of directors, but can the Minister elaborate further, including maybe on regulatory levers like approving pricing strategies and monitoring the product offerings so that the parties can honour Income's existing policies and ensure essential insurance products remain affordable and accessible under the new ownership structure, should it come through?

Mdm Deputy Speaker, I thank Ms Foo Mee Har for her questions. I know where Ms Foo is coming from because just as I mentioned earlier, she is very concerned about making sure that the workers are well looked after. She is also very concerned about making sure that the existing policyholders' interests are protected.

I appreciate where Ms Foo is coming from and I want to assure Ms Foo and Members of this House that indeed, MAS' focus is to make sure that the interests of policyholders are protected. I mentioned in my main reply earlier what are some of the ways in which we can do this and also what are some of the things that we can do to promote a competitive, vibrant and stable insurance market that would then give policyholders options and good choices.

I would like to reiterate this point in response to Ms Foo and then, add one important consideration to address the point that she mentioned. In order for us to promote a competitive and vibrant insurance sector, we need to make sure that our rules and regulations for the financial sector, for the insurance sector, are being implemented and that the regulator's decisions are being taken with transparency and also in accordance with what the law provides.

This is what we mean by rule of law – that it is not one set of treatment for one entity and another set of treatment for another entity. We have to have even-handedness and a level playing field across different entities within the market so that we are able to promote more competition in a more vibrant, in a more competitive market, which ultimately will serve the interests of our policyholders.

Mr Pritam Singh.

Thank you, Mdm Deputy Speaker. Just a few questions for the Minister. This pertains to the second thrust of his original reply, which was on the subject of Singaporeans' access to affordable insurance products. Both my questions pertain to what has happened over the last 24 hours.

The first pertains to the statement by the NTUC Secretary-General Ng Chee Meng. He stated that, "Today, Income offers two low-cost schemes for union members – NTUC Gift and LUV term life insurance. Income has assured NTUC that it will keep premiums affordable for policyholders, especially those in the lower-income segments."

Can I ask the Minister, with regard to MAS as regulator of insurance companies, has it queried NTUC on the basis of such a commitment that has been made in view of NTUC Enterprise's projected minority shareholding – if the deal goes through? Relatedly, can I enquire whether MAS is looking at the market to provide more low-cost options for Singaporeans, especially underserved communities who require insurance protection?

The second question pertains to NTUC's joint statement on 4 August and the response of the former Income CEO, Mr Tan, yesterday.

MAS, as regulator, would note that there is a point of difference between NTUC Enterprise's alleged representation that its undertaking to hold on to the relevant shares was "not for an indefinite period". Mr Tan, on the other hand, represents that this is not true and he invites MAS to ask both NTUC Enterprise and NTUC Income to produce all the material board minutes on the undertaking given by NTUC Enterprise. What is MAS' position on this matter?

Mdm Deputy Speaker, I thank the Leader of the Opposition for his two questions.

The first question on the insurance products that Income will continue to provide and also what the NTUC Secretary-General said in terms of those two specific low-cost products targeted at, especially, the lower-income workers, we are glad that NTUC has stepped forward to provide this assurance to look after the lower-wage workers. From a regulatory point of view, we do not go into the level of details in which the Secretary-General of NTUC has provided because he has gone beyond what is the regulatory requirement for him to give this assurance. He did it because he understands the concerns and he wants to give the assurance to the lower-wage workers that NTUC will continue to stand by them.

For MAS, my reply earlier to Ms Foo, to Mr Ang and others, and also in my main reply, that is what MAS will focus on. We will make sure that the terms and conditions of the existing policies will not change after the proposed deal has gone through. That is something that we will hold Income and Allianz to. That is something that will be part of our regulatory approval.

To Mr Singh's second question, we have noted the two letters from Mr Tan Suee Chieh. We will do some further work to establish what the facts are before we assess what our position is and our next steps. I want to assure Mr Singh and the House that MAS takes a serious view of protecting the interests of our policyholders and other stakeholders. We will establish the facts and we will assess what our next steps should be.

Ms Denise Phua.

Thank you to the Minister of State and Minister for the responses. I do not know whom I should direct this to, so my question is to either one of you. I help to run charities and also social enterprises as an active volunteer. I agree with Minister of State Alvin's quote by Dr Goh Keng Swee that —

Ms Phua, please ask your question. We have only three minutes.

— co-ops and social enterprises cannot remain forever just because they are there or they started at a certain time. Social enterprises are difficult to run because they have to meet both financial and social bottom lines. It is even costlier to keep them around just for sentimental reasons.

Will the Minister of State or the Minister, through this episode, review and provide better guidelines to educate co-ops, social enterprises, even Singaporeans at large, on the best practices on when these entities like social enterprises or co-ops should enter a market, when they should exit, especially when the landscape has changed? And also, if it is truly an essential sector, how would the Government then come in to support like in the case of preschools and so forth with anchor operator schemes? I just want to know what we learned from this episode.

I am sorry. You cannot direct your question to the Minister of State as we have passed the last PQ. So, it is now Minister Chee who will take the question.

Mdm Deputy Speaker, with your permission, I may exceed the time a little bit. I just want to apologise because I forgot to answer part of Mr Singh's question earlier. Mr Singh asked about the options and products for lower-income Singaporeans and underserved segments. Income, through the assurance given by NTUC and NTUC Enterprise, has said that they will want to continue to ensure that they provide affordable products for lower-wage segments. The provision of these different insurance products that cater to different segments of the society, including the vulnerable segments that Mr Singh mentioned, today, it is not just the purview of Income. The other insurers are also doing it.

So, we believe that a competitive market with sufficient competition and sufficient numbers of insurers, a stable, vibrant, competitive market, will allow us to be able to have more insurers step forward to provide products that may serve the needs of different segments in society, including the lower-wage segments and the vulnerable segments.

If I may now turn to Ms Denise Phua's question, Ms Phua's starting point is a correct one, and that is also the view of NTUC and NTUC Enterprise. I believe my colleague, Minister of State Alvin Tan, had also reiterated that this is also the Government's belief that in order for an entity to do good, it must first be able to do well, so that it can sustain doing good. If you are unable to do well, you cannot continue to do good. So, that philosophy, as Dr Goh Keng Swee articulated, still remains very true today.

For this particular proposed deal, one of the key objectives that NTUC and NTUC Enterprise want to achieve is exactly that. They are not moving away from their social mission. They continue to want to fulfil their social mission. But this is a better way of fulfilling that social mission and this is a more effective way for them to do good if they are able to have a strong Income.

Order. End of Question Time. Introduction of Government Bills. Minister for National Development.

[(proc text) "to amend the Building Control Act 1989 to enhance energy efficiency measures for existing buildings and to make a miscellaneous amendment", (proc text)]

[(proc text) presented by the Senior Minister of State for National Development (Ms Sim Ann) on behalf of the Minister of National Development; read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

[(proc text) "to amend the Energy Market Authority of Singapore Act 2001, the Electricity Act 2001 and the Gas Act 2001", (proc text)]

[(proc text) recommendation of President signified; presented by the Second Minister for Trade and Industry (Dr Tan See Leng); read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

[(proc text) "to amend the Casino Control Act 2006 and to make consequential and related amendments to the Gambling Control Act 2022 and the Gambling Regulatory Authority of Singapore Act 2022", (proc text)]

[(proc text) presented by the Minister of State for Home Affairs (Ms Sun Xueling) on behalf of the Second Minister for Home Affairs; read the First time; to be read a Second time on the next available Sitting of Parliament in September, and to be printed. (proc text)]

[(proc text) "to amend the Constitution of the Republic of Singapore", (proc text)]

[(proc text) presented by the Senior Minister of State for Manpower (Dr Koh Poh Koon) on behalf of the Minister for Manpower; read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

[(proc text) "to provide for the rights and obligations of platform operators and platform workers, to register and recognise platform work associations and provide for matters connected therewith, to amend certain Acts to provide for the rights, obligations, protections and representations of platform workers and platform operators under those Acts and to make consequential and related amendments to certain other Acts", (proc text)]

[(proc text) recommendation of President signified; presented by the Senior Minister of State for Manpower (Dr Koh Poh Koon) on behalf of the Minister for Manpower; read the First time; to be read a Second time on the next available Sitting of Parliament, and to be printed. (proc text)]

Minister for Law.

[(proc text) Order for Second Reading read. (proc text)]

Mdm Deputy Speaker, on behalf of the Minister for Law, I beg to move, "That the Bill be now read a Second time".

Before I deal with the Bill proper, please allow me to outline the important roles and functions that land surveyors perform.

Land surveyors conduct land, building or property surveys in Singapore. Such surveys are necessary to demarcate property boundaries required for the issuance of titles and land development works. They also have the expertise to conduct other types of survey work, such as as-built, topographical and setting-out surveys.

Land surveyors play an important role in the built environment sector. By depicting accurate boundaries and areas in their cadastral surveys, land surveyors contribute to a stable and reliable property ownership framework, which gives certainty to individuals and businesses alike in their dealings. Land surveyors also work with other professionals within the sector, including architects and professional engineers, throughout the lifecycle of a development project. The work stretches from concept to construction and even beyond, from topographical surveys of the site to the final stage of cadastral survey when the building is completed.

Conversely, any errors by land surveyors, such as in the determination of property boundaries in a cadastral survey, can have significant downstream consequences. For example, discrepancies in the surveyed land area occupied by a property could affect the property's valuation. Errors could also lead to inaccurately demarcated boundaries, resulting in encroachments onto neighbouring plots of land owned by different parties.

The Land Surveyors Act 1991, the Act, was enacted to establish a system of registration and regulate the qualifications and practices of land surveyors who supply their services in Singapore.

Under the Act, the Land Surveyors Board (LSB) oversees the registration of land surveyors, regulation of the qualifications and practice of land surveyors, as well as related matters. LSB is also empowered by the Act to establish, maintain and develop the standard of professional conduct and ethics of the surveying profession.

Under our current framework, individuals, regardless of nationality, can only engage in land survey work in Singapore, if they are registered surveyors who have a valid practising certificate issued by LSB; authorised surveyors; or carrying out land survey work under the direction or supervision of such registered surveyors or authorised surveyors.

Registered surveyors are individuals who are registered as land surveyors under section 12 of the Act. These individuals must meet LSB's eligibility criteria, such as passing of examinations and a professional interview conducted by LSB. Authorised surveyors refer to land surveyors employed by the Singapore Land Authority, regardless of whether they are registered under section 12 of the Act.

This framework has served Singapore well over the years. It has ensured that all land surveyors providing services in Singapore are fit and qualified to do so.

At the same time, land surveying is evolving, for example, to include the use of rapidly developing land surveying technologies, such as ground penetrating radar. This is creating new and exciting opportunities for cross-border exchange of expertise.

Given these developments, we are introducing this Bill to help the local profession to pursue these opportunities. In addition, as the last major amendments to the Act were made 20 years ago, we are also taking the opportunity to update certain aspects of the Act.

There are broad proposals in this Bill. They are: facilitating the implementation of Mutual Recognition Arrangements (MRAs) between Singapore and other countries or territories and/or between LSB and its foreign counterparts in other countries or territories; granting registered surveyors greater professional recognition; and updating the penalties and fines and dealing with the consequential amendments in the Act. I will take hon Members through these areas in turn.

First, the amendments to facilitate the implementation of MRAs. As defined in the Bill, MRAs are bilateral or multilateral arrangements for the mutual recognition of land surveyors who are registered in their respective countries or territories and the survey work that may be performed by these land surveyors in each such country or territory that is party to the MRA.

The proposed amendments will facilitate the movement of local registered surveyors from Singapore who wish to pursue new opportunities overseas, subject to the rules in the foreign jurisdiction. It also allows Singapore to benefit from the expertise of foreign land surveyors.

MRAs will also allow us to build up and strengthen new capabilities within the local surveying profession, through the mutual exchange of knowledge, expertise and best practices. For example, registered foreign surveyors may be able to share their experience or expertise with specialised equipment in emerging areas like aerial Light Detection and Ranging (LIDAR) scanning, underground survey and large-scale mapping.

Our local registered surveyors can also benefit by collaborating with registered foreign surveyors who have access to specialised equipment, such as cameras used to conduct aerial mapping. This can help them to take on new or different types of projects, with lower upfront capital investment.

For local registered surveyors intending to engage in survey work overseas under an MRA, the new section 10A, inserted by clause 7 of the Bill, will provide for them to apply to LSB to be recognised for the purposes of that MRA.

Meanwhile, for foreign surveyors who wish to carry out survey work in Singapore, clauses 3 to 6 and 9 of the Bill will amend the Act to require LSB and its Registrar to administer and maintain a register of foreign surveyors who have successfully registered with LSB and allow registered foreign surveyors to carry out survey work in Singapore in a manner permitted by LSB pursuant to an MRA.

These changes are supported by the members of LSB, which includes private sector representatives. They are also in line with the 2017 amendments to the Architects Act 1991 and Professional Engineers Act 1991, which facilitated the implementation of MRAs in these related professional fields.

Hon Members who are familiar with the developments in the built environment sector will know that land surveyors, architects and professional engineers are often collectively referred to as allied professionals. The amendments proposed in this Bill on MRAs will have the effect of ensuring that local registered surveyors are on par with their allied counterparts. MRAs can make it easier for local registered surveyors to practise abroad in a participating jurisdiction.

With your permission, Mr Speaker, Sir, may I ask the Clerks to distribute handouts that illustrate how MRAs will add to our current landscape.

Please go ahead. [Handouts were distributed to hon Members. Please refer to Annex 1.]

Obliged, Sir. Members may also access the handout through the MP@SGPARL App.

As set out on page 1 of the handout, currently, a local registered surveyor who wishes to engage in land survey work overseas is likely to have to go through the full qualification process to be registered to practise in that jurisdiction. The surveyor will have to meet that jurisdiction's requirements, including residency or citizenship-based restrictions, if applicable. The application process may also involve steps, such as passing examinations or professional interviews conducted by the overseas Board or Authority.

However, where there is an MRA in place, the local registered surveyor can apply to LSB to be recognised for the purposes of the MRA instead. One example is the ASEAN Framework Arrangement for the Mutual Recognition of Surveying Qualifications (ASEAN MRA) which was signed in 2007. After the ASEAN MRA is implemented, the ASEAN Registered Surveyor Scheme, the Scheme, will be introduced. Eligible land surveyors can apply through their local survey authorities to the ASEAN Competent Authority Committee on Surveying (ACACS) to be recognised as ASEAN registered surveyors.

Local registered surveyors in Singapore who have been recognised as ASEAN registered surveyors will be able to collaborate on land surveying projects in other ASEAN member states. Such ASEAN registered surveyors will not have to go through the full qualification process in that country but will remain subject to any conditions imposed by the relevant overseas survey board or authority. This will help our local registered surveyors to tap on business opportunities in different markets and broaden their exposure and experience. The ASEAN member states have been working together to implement the Scheme. LSB will update the local registered surveyor community, when the Scheme is ready for implementation.

Next, turning to page 2 of the handout, such MRAs will also introduce a new way for foreign land surveyors to contribute to land survey work in Singapore. Aside from the three existing pathways through which individuals can engage in survey work in Singapore, which I touched on earlier, foreign land surveyors will be able to apply to LSB to be registered foreign surveyors. This will allow them to engage in survey work in Singapore in a manner permitted by LSB pursuant to an MRA.

For example, under the Scheme, ASEAN registered surveyors from other ASEAN member states will be able to collaborate with our local registered surveyors on surveying projects in Singapore, after they are registered with LSB. These registered foreign surveyors will not be allowed to practise independently. They can only do so in collaboration with a local registered surveyor.

On the matter of safeguards in the implementation of MRAs, I wish to highlight that foreign land surveyors will need to meet certain requirements before they can provide land surveying services in Singapore in accordance with the terms of an MRA. For example, under the Scheme, there will be binding minimum requirements in terms of qualifications and work experience, which individuals must meet before they can be recognised as ASEAN registered surveyors.

The new section 12A(4) inserted by clause 9 of the Bill also allows LSB to impose additional conditions on foreign land surveyors as part of their registration as registered foreign surveyors. This enables LSB to ensure there are safeguards to protect the interests of the public, where required, and allows it to continue to effectively regulate the quality of land surveying services provided in Singapore.

Registered foreign surveyors will support, rather than compete with, our local registered surveyors. For example, as mentioned earlier, foreign ASEAN registered surveyors will not be allowed to provide land surveying services independently in Singapore, that is, without a local partner. If they wish to practise independently in Singapore, they must go through the same process as any other individual who wishes to be a local registered surveyor today. This includes passing the examinations and professional interview conducted by LSB, being registered with LSB and having in force a practising certificate.

When the Scheme is implemented, LSB also intends to impose a condition that foreign registered surveyors under the Scheme will only be able to take on one project and, thus, collaborate with only one local registered surveyor at any one point in time.

LSB will continue to monitor the implementation of the Scheme in Singapore and make adjustments where necessary.

I now move to the second proposal in the Bill, the introduction of official titles for local registered surveyors and registered foreign surveyors. This will grant greater recognition to local registered surveyors and help distinguish local registered surveyors from their counterparts.

Under section 10(2) as amended by clause 6, local registered surveyors will be able to use the title "RS". This is similar to the use of professional titles amongst registered architects and registered professional engineers. Registered foreign surveyors will be able to use a separate designation to be determined by LSB.

The final proposal in the Bill is to update the fines and penalties for illegal practice and improper conduct in land surveying. The quanta of fines and penalties have remained unchanged since the Act was enacted in 1991. It is thus timely to review them to ensure they remain effective deterrents going forward. LSB carried out a holistic review, referencing similar offences in the Architects Act 1991 and the Professional Engineers Act 1991, while keeping in mind the difference in the nature of the work of land surveyors and that of these allied professionals.

For specific offences, such as illegal practice, wilful falsification of register and wrongly procuring registration, stiffer fines are proposed. Clause 6 proposes to raise the maximum fine in section 10(5), which sets out the penalties for engaging in survey work in Singapore without meeting the requirements stipulated under the Act and falsely representing oneself as a person authorised to supply survey services in Singapore, from $4,000 to $10,000. Similarly, clause 15 proposes to raise the maximum fine stated in section 34, which prescribes penalties for the wilful falsification of any register kept under the Act and wrongfully procuring registration under the Act from $4,000 to $10,000, too.

As for disciplinary proceedings and revocation of licences, clauses 11 and 12 provide for the raising of the maximum penalties under sections 25(2) and 27(2) to $20,000 and $50,000 respectively, from the existing maximum penalties of $10,000 and $20,000.

LSB is empowered to impose these penalties on (a) registered surveyors and (b) licensed corporations/partnerships/limited liability partnerships respectively, in cases where LSB considers that no cause of sufficient gravity for cancellation of a registration, suspension from practice or revoking a licence exists but some form of disciplinary action is appropriate.

Next, clause 13 will raise the maximum fine under section 30(2) from $2,000 to $5,000. This pertains to a refusal or failure, when required to do so by LSB or an Investigation Committee convened by LSB, to give evidence, answer truthfully and fully any question or produce any book, document or paper.

Finally, clause 17 makes consequential amendments to certain other Acts. These will make clear that the term "registered surveyor", when used in these other Acts, only applies to the land surveyors registered under section 12 of the Land Surveyors Act, that is, to local registered surveyors. This will avoid any confusion with the introduction of registered foreign surveyors into the local land surveying landscape.

In closing, Sir, these amendments will make it easier for local registered surveyors to tap on opportunities overseas and, at the same time, allow Singapore to tap on external land surveying expertise and resources to support the built environment sector. They will also provide strong recognition for practising local registered surveyors on par with their allied counterparts, such as architects and professional engineers.

Finally, the amendments will strengthen LSB’s regulatory powers. This will allow it to continue upholding the standing and integrity of the professional land survey fraternity in Singapore. Sir, I beg to move.

[(proc text) Question proposed. (proc text)]

Mr Yip Hon Weng.

Mr Speaker, Sir, I rise in response to the introduction of the Land Surveyors (Amendment) Bill 2024. I appreciate the Ministry's efforts to elevate and integrate Singapore's surveying profession within the ASEAN framework.

The proposed amendments, particularly those facilitating the ASEAN MRA and the introduction of the ASEAN ARS, hold significant potential for strengthening the profession in Singapore and the region. However, while the Bill aims to enhance the mutual recognition of land surveyors within ASEAN, I have several clarifications on the Bill.

Mr Speaker, Sir, let us first consider the timing and rationale behind these proposed amendments. The Bill seeks to amend the Land Surveyors Act 1991. This is primarily to allow for mutual recognition of survey works under MRAs.

I note that the ASEAN MRA on surveying services was signed in 2007. However, even after 17 years later, the detailed scheme has not been fully established. Why has there been such a notable delay in finalising the MRA? Is it prudent to implement this Bill when the details of the scheme remain unclear? Without the finalised details, how can we ensure that the mutual recognition arrangement will be beneficial and fair to our local surveyors? Can the Minister provide a timeline for when the details of the ARS scheme will be announced?

Second, Mr Speaker, Sir, I would like to ask about the potential impact of this Bill on our local surveying professionals. We should support the vision of a more integrated ASEAN surveying landscape. Nonetheless, we must ensure that our local surveyors are not inadvertently disadvantaged by this process.

Opening our market to ASEAN-based surveyors raises several concerns.

Firstly, on the issue of competitiveness, have our ASEAN counterparts announced similar bills or schemes in their jurisdictions? If not, by being the first, will Singapore inadvertently disadvantage our local surveyors? The possibility of lower-cost ASEAN-based surveyors competing for jobs in Singapore could negatively impact the livelihoods of our local professionals. I urge the Ministry to clarify what measures are in place to protect our surveyors from unfair competition and ensure a level playing field.

Furthermore, the principle of reciprocity must be carefully examined. Our local surveyors will be required to register with LSB to perform work overseas under this scheme. Yet, are our ASEAN counterparts equally prepared to accept Singaporean surveyors? Will our professionals face any red tape, bureaucratic hurdles or barriers in these foreign jurisdictions hindering their ability to compete for projects fairly overseas? Clarity on these reciprocal arrangements is essential to ensure that this Bill truly fosters mutually beneficial professional mobility within ASEAN. Do we know of any other ASEAN jurisdictions which may be implementing such an arrangement soon?

Third, Mr Speaker, Sir, we need to uphold the highest standards of professional practice within the Singaporean surveying sector. While we seek greater regional collaboration, we should never compromise on the quality of surveying work conducted within our nation.

To maintain these high standards, it is essential to ensure that foreign surveyors entering our market are adequately qualified and their work meet our stringent requirements. This raises the question of verification. How will we ensure that ASEAN-based surveyors possess the necessary qualifications and competencies for the scope of work required in Singapore? Will there be stringent and transparent verification processes in place to validate their credentials and ensure equivalence with our local standards?

Moreover, I believe it is critical to address the issue of quality assurance. Will the work of foreign surveyors be subject to rigorous oversight by our local registered surveyors? To guarantee accountability and maintain the highest levels of professional rigour, should we consider mandating that a local registered surveyor co-signs the work of foreign surveyors engaged in projects within Singapore? Should there be any dispute on the work of these foreign surveyors, what recourse do potential clients have?

Mr Speaker, Sir, beyond these key areas, I believe there are additional considerations that warrant our attention. Firstly, we must carefully examine the potential economic implications of this Bill on Singapore's surveying industry. Have we conducted a comprehensive impact assessment to fully understand how local surveyors and businesses, particularly smaller firms, will be affected by the increased competition?

Secondly, we must address the question of potential differences in technological and methodological standards between Singapore and other ASEAN countries. Do such discrepancies exist? If so, how will we address them to ensure consistent, high-quality survey work across borders when projects involve professionals from different nations? Maintaining our standards of precision and accuracy necessitates a clear understanding of how we will navigate these potential differences.

Given that laws, regulations and even established methodologies can vary among countries, should we consider mandating that ASEAN surveyors, before practising here, undertake a mandatory familiarisation programme? This programme could focus on Singapore-specific surveying regulations, legal precedents and common practices.

Additionally, Mr Speaker, Sir, are the instruments and technologies used in other ASEAN nations directly compatible with our own standards and systems? If not, how do we ensure uniformity and accuracy when integrating data collected using potentially disparate methodologies? Should foreign surveyors be required to utilise equipment that aligns with Singapore's standards while operating here? This, again, highlights the need for a comprehensive integration process, perhaps through the mandatory familiarisation programme I proposed earlier.

In conclusion, Mr Speaker, Sir, let us take a moment to consider the importance of land surveyors and land surveying. In a small and densely populated nation like ours, where land is an invaluable and finite resource, the role of land surveyors is critical. They are the guardians of our boundaries, ensuring the precise demarcation of every square metre. Their meticulous work underpins our property ownership records, our construction projects and even the management of our underground infrastructure. The very foundation of our built environment relies upon the expertise of our land surveyors.

While I commend the intent behind the Land Surveyors (Amendment) Bill to foster greater collaboration and professional recognition within ASEAN, I believe it is imperative that we proceed with a measured and cautious approach. We must thoroughly examine the potential implications on our local surveyors. We must also ensure that robust measures are in place to sustain the high standards of surveying work that are synonymous with Singapore.

Firstly, the timing of this Bill in relation to the still developing ARS scheme raises concerns that must be addressed. Secondly, we must safeguard the interests of our Singaporean surveyors against unfair competition and ensure genuine reciprocity in professional mobility within ASEAN. Thirdly, stringent verification of qualifications and rigorous quality assurance mechanisms are non-negotiable aspects of upholding our professional standards.

Only through careful consideration, thorough planning and a commitment to transparency can we ensure that this Bill achieves its intended goals of regional integration, without compromising the interests of our local surveying professionals. I support this Bill.

Minister of State Murali Pillai.

Mr Speaker, Sir, I thank the hon Member Mr Yip Hon Weng for raising very thoughtful points in his speech. I would like to respond to three areas raised in his speech.

First, on the timing and rationale of the Bill. The hon Member is right to observe that it has been about 17 years since the Framework Arrangement was signed in 2007. This reflects the complexity of the task at hand. We had to deal with the unique characteristics of jurisdictions across ASEAN and, of course, the domestic legislation dealing with boundary and geographical locations of the various properties as well.

In addition, there is a need to strike a balance between greater ease of movement for land surveyors and also meeting local requirements. So, all these led to the time that has been taken. But the passing of this Bill is an important milestone because it is an indication that we are turning the corner and, hopefully, we will be able to get the details of the Scheme, as commonly agreed amongst the ASEAN member states.

I want to also highlight one very important point. It does not mean that when we passed the Bill, the Scheme is implemented straightaway. It would not. It would only be implemented after the details of the Scheme has been ascertained and member states agree to the Scheme as well. So, this is a safeguard to make sure that at any one point in time there would be reciprocity between member states. So, that is one big safeguard which will address some of the concerns that were raised by the hon Member just now.

The next area which I want to touch on is the issue of timing. As I said in my speech, LSB would be making announcements on the details of the Scheme as and when they are ready.

Moving to the second area for clarification, the impact on local surveyors. The first point to note, as I mentioned earlier, is that the MRA would only be put into effect when other member states are ready. So, we ensure that the benefits are reciprocal.

The other point to note is that registered foreign surveyors would only be allowed to practise in Singapore in collaboration with local registered surveyors. In other words, when they do the work and they sign off, it is not enough for the registered foreign surveyors to sign off. The local registered surveyors would have to sign off as well and this is a good safeguard, the reason being, with the local registered surveyors in play, we will be able to ensure that the local registered surveyor community would generally benefit because otherwise they would not employ registered foreign surveyors, and this is also to ensure the level of standard that is required in relation to any survey services that have been contracted.

As far as qualifications and standards are concerned, which is the third area that the hon Member has raised, he will be happy to note that we are ad idem, we also agree that there must be a high standard of qualifications as well as experience before a registered foreign surveyor is allowed to practise in Singapore in collaboration with a local registered surveyor. So, this is where LSB has to come up with the criteria. Commonly, the ASEAN Competent Authority Committee on Surveying would stipulate the minimum qualifications and experience that a registered foreign surveyor must possess before seeking to admit itself in the jurisdiction of another member state.

I now come to some of the additional points that the hon Member made in his speech.

First, he asked whether there was a study on the potential economic implications. As I said in my speech, this initiative was really promulgated at the instance of LSB, which includes of members from the private sector. So, they are all looking forward to it and I also mentioned that allied professionals, such as professional engineers and architects, have already been subject to MRAs and they are benefiting from it as well.

Singapore remains a little red dot and we can see that with the MRA, our land surveyors have the potential to practise across jurisdictions. Certainly, what we have here is the prospect of having in place an ASEAN MRA and that is something which I am sure they will look forward to.

The hon Member also mentioned about the prospect of standardising the methodology standards for surveys and that is a fair point. But one would have to put in place the MRA first and then work and endeavour towards standardisation. At this point in time, one good safeguard is the fact that a registered foreign surveyor has to collaborate with a local registered surveyor so that the local standards would be observed.

Sir, I believe I have answered most, if not all, of the questions raised by the hon Member.

In conclusion, the proposed amendments to the Land Surveyors Act 1991 will facilitate the implementations of MRAs and, through the cross-border exchange of expertise, support our local registered surveyors in adopting new or different technologies, exploring opportunities in different fields and locations as well as upskilling themselves.

This is important, given the shrinking manpower pool, the increasing use of technology in the field and the emergence of new focus areas in the industry. All of these mean that it will no longer be sufficient for our local registered surveyors to be proficient only in the traditional domains of land surveying.

It is thus critical that we take advantage of new areas of opportunities to pivot and launch the profession to even greater heights and be ready for future challenges. I thank the hon Member for his questions and suggestions. Mr Speaker, Sir, with that I beg to move.

Any clarifications for the Minister of State, Mr Yip? No.

[(proc text) Question put, and agreed to. (proc text)]

[(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)]

[(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mr Murali Pillai.] (proc text)]

[(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)]

Second Minister for Home Affairs.

[(proc text) Order for Second Reading read. (proc text)]

Mr Speaker, Sir, I beg to move that, "The Bill be now read a Second time".

Sir, Singapore has a comprehensive anti-money laundering regime, comprising legal and institutional levers. This regime is well established and highly regarded internationally. But the landscape does not stay static and new risks emerge regularly. Rather than to expect perfection at any point in time, our approach has been to stay responsive and to get ahead of the curve once these risks are identified and assessed. This is what this Bill seeks to do.

Mr Speaker, may I have your permission to ask the Clerks to distribute a handout with some details of our regime?

Please proceed. [A handout was distributed to hon Members.]

Sir, our laws to tackle money laundering include the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, or CDSA for short, as well as the Criminal Procedure Code, or CPC. Like our other laws, we regularly review the CDSA and CPC to ensure that they remain relevant and effective.

Money laundering, in particular, is one crime which has evolved significantly. Money launderers are finding new ways to evade detection, taking advantage of technological innovations meant to facilitate legitimate financial and business transactions. Consequently, international standards against money laundering have been enhanced. This includes those set by the Financial Action Task Force (FATF), the international body that sets global standards to tackle money laundering and terrorism and proliferation financing.

Each new money laundering case uncovered in Singapore or around the world provides useful lessons and this includes our $3 billion case. We have been distilling the learning points through careful studies of the changing modus operandi, as well as the new standards promulgated by FATF. This Bill is a continuation of our ongoing efforts to ensure that Singapore’s regime keeps pace with evolving standards and trends, so that we can continue to deal effectively with attempts to launder criminal proceeds through Singapore.

According to the International Criminal Police Organisation (INTERPOL), around US$2 to $3 trillion of illicit proceeds are channelled through the global financial system every year. US$2 to $3 trillion. Think about it. These numbers are bigger than the gross domestic product (GDP) of most countries, Singapore included. In the ocean of money flows, criminal proceeds are like toxic waste that gets carried along. Inevitably, some of them enter pristine waters, polluting rivers and estuaries, much against the wishes of local communities.

Illicit monies flow through many jurisdictions, but are especially attracted to global financial centres, such as London, Hong Kong, New York, Delaware, Switzerland and Singapore. This is because the open, efficient and well-connected infrastructure of such centres that makes them attractive to legitimate investors is also useful for criminals to move and hide their monies. I shared some examples with Parliament last year. More of such cases have surfaced since.

In February this year, the Hong Kong authorities arrested seven Hong Kong residents suspected of laundering US$1.8 billion of proceeds from online scams in India and the illegal sale of electronics and rare gems. The authorities seized more than US$21 million worth of assets as part of the operation. In April, two managers of a Saudi oil exploration company went on trial in Switzerland for alleged fraud and money laundering of at least US$1.8 billion.

Singapore strives to be a reputable, trusted and thriving financial and business hub. We have a hard-earned track record and every intention to keep our system clean. This must mean keeping money launderers out of our system as best as we can.

Our anti-money laundering regime has three pillars: (a) prevention through a robust legal and regulatory framework to deter such criminals; (b) detection to ensure that illicit activities are picked up early; and (c) enforcement. We take firm and prompt enforcement action against money laundering.

In this Bill, we have proposed enhancements across all three pillars to empower our agencies with strengthened levers and toolkits against money laundering.

Sir, allow me to elaborate on the key features of the Bill.

The Bill seeks to: first, align our framework for Anti-Money Laundering and Countering the Financing of Terrorism, or AML/CFT, framework with the FATF standards to better prevent and detect money laundering; second, enhance the ability of Government agencies to detect and enforce against money laundering through enhanced data sharing and strengthened prosecutorial levers; and third, clarify and improve our processes to deal with seized or restrained properties linked to suspected criminal activities.

First, on our AML/CFT framework for casino operators.

Customer due diligence (CDD) checks conducted by gatekeepers in various sectors, is key to preventing suspicious individuals from sinking roots into our system and detecting any illicit activities early. Casino operators are one such gatekeeper.

To align with FATF's standards, clause 2 will amend the Casino Control Act to require casino operators to conduct tighter CDD checks on patrons at the point of transaction. The threshold for CDD checks will be lowered from the current threshold of single cash transactions involving $10,000 or more or deposits into a deposit account involving $5,000 or more to cover single cash transactions or deposits involving $4,000 or more.

Additionally, the Gambling Regulatory Authority of Singapore will be empowered to require casino operators, when conducting CDD checks, to also consider proliferation financing risks. These are the risks of financing the proliferation of weapons of mass destruction.

Second, this Bill will enhance the ability of relevant Government agencies to detect and enforce against money laundering through enhanced data sharing, and strengthened prosecutorial levers.

On data sharing. Very often, money launderers will conduct and layer their activities across different sectors and use different front entities, so as to avoid detection. When interacting with individual Government agencies, they may leave traces of suspicion, which, on their own, may not raise concerns. However, when triangulated and pieced together with information from other agencies and sources, including Suspicious Transaction Reports (STRs), a more revealing picture may emerge. This can then trigger and support investigations by the relevant law enforcement agencies.

Clauses 18 to 21 introduce amendments to the Income Tax Act, Goods and Services Tax Act, Regulation of Imports and Exports Act, and the Free Trade Zones Act. The amendments will allow the Inland Revenue Authority of Singapore (IRAS) and Singapore Customs to share tax data and trade data respectively, with Singapore's Financial Intelligence Unit. This will allow the Suspicious Transaction Reporting Office of the Singapore Police Force to augment its analyses of money laundering risks and, in turn, provide richer financial intelligence to law enforcement agencies and AML/CFT regulators for appropriate enforcement action.

The United Kingdom, New Zealand and South Korea have similar tax data sharing arrangements. Likewise, Hong Kong, the United States (US) and Luxembourg have trade data sharing arrangements with their Customs agencies.

Additionally, clause 10 introduces amendments to the CDSA to allow any AML/CFT regulator, such as the Council for Estate Agencies (CEA) and the Accounting and Corporate Regulatory Authority (ACRA), to have access to suspicious transactions reports filed by their respective regulated entities. Regulators will then have greater insight into the risks and trends relating to their sectors, and be able to take more effective supervisory and regulatory actions. Guardrails for the data-sharing will be implemented to protect data confidentiality.

Next, we will amend and enhance the levers for prosecution of money laundering cases arising from criminal conduct abroad.

After our investigators painstakingly turn over the stones and uncover the suspects and their activities, the next big challenge is navigating the legal hurdles to successfully prosecute them. To do so, the prosecution needs to show that the monies, allegedly laundered in Singapore, are benefits derived from criminal conduct. In cases where the criminal conduct is committed outside Singapore, the authorities are currently required to show the complete trail of the monies from the point the crime was committed overseas to the point the monies were deposited with the money launderer in Singapore.

In many cases, law enforcement agencies face enormous challenges in obtaining the necessary evidence from foreign victims, entities and authorities. This is especially so if the criminal proceeds had flowed through many jurisdictions before entering Singapore, which is often the case. Criminals do this to conceal the origin of their proceeds and exploit such legal requirements to their advantage.

To enhance our abilities to effectively prosecute money laundering offences, clause 11 of the Bill amends section 56 of the CDSA such that the prosecution will no longer need to prove that the monies allegedly laundered in Singapore were benefits from criminal conduct nor show the complete trail. It will be sufficient for the prosecution to prove that the money launderer knew or had reasonable grounds to believe that the property he was dealing with were the gains from criminal conduct. This amendment will significantly alleviate the challenges faced by the prosecution today when dealing with money laundering offences, in cases where the monies laundered had passed through many bank accounts and intermediaries in foreign jurisdictions before entering Singapore.

We also propose to designate foreign environmental crimes as money laundering predicate offences.

Currently, law enforcement agencies are only able to investigate money laundering offences arising from the commission of an offence outside Singapore if the foreign offence is also a serious offence under Singapore's laws. Environmental crimes, such as illegal mining, illegal waste trafficking and illegal logging, are not applicable in our domestic context and, hence, not considered serious offences in Singapore. This limits our ability to investigate money laundering associated with such foreign offences.

However, these crimes are one of the largest contributors to transnational organised criminal activities in the East Asia and Pacific region. There is a high propensity for funds arising from such crimes to flow into Singapore, given that we are a well-connected international financial, trading and transit hub. This was highlighted in Singapore's Environmental Crime Money Laundering National Risk Assessment, which we recently published.

Clause 13 therefore introduces a Third Schedule to the CDSA, which will designate serious foreign environmental crimes as money laundering predicate offences. We have taken a risk-based approach, aligned with FATF's recommendations, and propose to designate specific foreign environmental crimes which have been assessed to pose a higher risk of their proceeds being laundered in Singapore. These are illegal logging, land clearing, mining, waste trafficking and wildlife trade. The amendment will allow the law enforcement agencies to investigate money laundering offences if it is suspected that the monies in Singapore are derived from such serious environmental crimes committed overseas.

Third, this Bill introduces three proposals to improve the processes to deal with seized properties in general, including those linked to money laundering.

Currently, when seized or restrained property is no longer required for investigations or court proceedings, law enforcement agencies must obtain the consent of all parties involved if they want to obtain a court order to sell the property. This is highly impractical because, if there is no consensus amongst the parties, law enforcement agencies will need to continue to manage and maintain the property. These properties can include vehicles, liquor, luxury watches and livestock. Not only are they costly to maintain, they also tend to depreciate in value. The costs of maintenance are borne by the state.

Clauses 14 to 16 will amend the CPC and the CDSA to allow the Court to order the sale of a seized or restrained property without the consent of all parties involved, provided the Court is satisfied that, the value of the property is likely to depreciate or undue costs are involved in maintaining the property; or the sale would be in the interests of justice. These amendments will allow law enforcement agencies to reduce the cost of property maintenance and preserve the value of seized or restrained properties to facilitate subsequent asset recovery and restitution to the victims.

We will also make amendments to deal with properties in cases where the suspect has absconded.

In the course of investigations, law enforcement agencies may seize properties linked to persons who are suspected of having committed offences under Singapore's laws but cannot be found despite efforts to reach out to them. In some cases, the persons may have left Singapore and cannot be extradited or refuse to return. This is not uncommon in cross-border financial crimes, such as money laundering and scams. Investigations can be wilfully stalled by such absconded persons if they decide to stay out of Singapore in order to avoid being imprisoned for their crimes. But law enforcement agencies need to interview them for the investigations.

Today, the CPC prohibits the Court from releasing a seized property if the property is required for any investigation, inquiry, trial or any proceeding under the law. However, if the law enforcement agencies fail to satisfy the Court that any of these grounds for continued seizure of the property applies, the Court may order the property's release or disposal.

If the absconded person refuses to return to Singapore, it may become increasingly difficult for the Police, over time, to justify how the continued seizure of the property remains relevant to the investigations, which are not making headway because they cannot interview the person. This presents an opportunity for absconded persons to frustrate due process. By staying out of Singapore and, hence, stymying investigations, they have hope that the seized property would eventually be released back to them.

Clause 16 amends the CPC such that the Court must not dispose of the seized property, if there is any pending investigation in relation to an absconded person who is reasonably suspected of having committed an offence in respect of the property, regardless of the progress of the investigation. Law enforcement agencies can lawfully seize property only where they have reason to suspect that an offence has been committed or the property has some nexus to the offence. Further, the Court will also have to determine that the continued seizure will not cause injustice to any person entitled to the possession of the property. This ensures due process in the proceedings.

Next, section 372 of the CPC currently provides that if the person entitled to a seized property is unknown or cannot be found, the property will be vested in the Government if no one establishes a claim to it within six months of a public notice. However, an absconded person can lay a claim to the property through a legal counsel, while refusing to return to Singapore to cooperate with the investigations.

Moreover, absconded persons could try to find creative means to insulate their properties from forfeiture or confiscation. For example, they could vest the legal title to the properties in other individuals, who may not have committed offences in Singapore. These individuals may then present themselves as innocent claimants to the property.

Clauses 16 and 17 amend sections 370 and 372 of the CPC, to include a requirement that an absconded person who is suspected of having committed an arrestable offence under our laws or serious offence under the CDSA, must personally present himself before a law enforcement officer to assist in the investigations, prior to making a claim to the property seized in respect of the offence.

Additionally, clause 16 amends the CPC to provide that the Court may consider whether the property was obtained through legitimate sources, such as income or investments, before the seized property may be released to a third party, even if that third party has not committed any crimes. That party cannot prove his entitlement to the property simply because it was a gift from the absconded person.

Taken together, these amendments will enable the Government to better deal with absconded suspects, through depriving them of the financial gains of their money laundering and other criminal activities, if they refuse to return to Singapore for investigations.

To be clear, these amendments continue to be subject to judicial oversight and only affect persons who are suspected to have committed offences in Singapore and have absconded, as well as properties seized in relation to these offences. The proposal does not change the existing law or procedures for persons who are not "absconded persons".

Sir, today's Bill is another step in strengthening our AML/CFT regime. It will not be the last. Criminals will continue to explore other ways to circumvent even the most stringent of measures, in the fast-changing money laundering landscape.

Singapore will therefore have to continue to be vigilant and we will not hesitate to further tighten our laws against money laundering where necessary, to ensure that our financial and business ecosystem remains reputable and trusted and continues to thrive. Sir, I beg to move.

[(proc text) Question proposed. (proc text)]

Ms Foo Mee Har.

Mr Speaker, I rise today to express my support for the Anti-Money Laundering and Other Matters Bill – the AMLOM Bill in short.

As a prominent global financial centre with substantial flows of capital, Singapore faces inherent risks related to money laundering. It is therefore imperative that our anti-money laundering regime remains dynamic and consistently ahead of the evolving tactics of criminals. These individuals are becoming increasingly sophisticated, employing advanced technology, intricate financial networks and cryptocurrencies to outmaneuver systems of detection and prosecution.

Sir, I would like to raise three points in support of the AMLOM Bill.

First, the amendments in this Bill will empower Government agencies to share tax and trade data with Singapore's Financial Intelligence Unit, the Suspicious Transaction Reporting Office (STRO). Additionally, amendments will allow STRs filed by entities regulated under CEA and ACRA to be accessed by relevant authorities.

Data sharing across Government agencies is a significant step forward. It is the key to seeing the full picture of illicit activities. Like pieces of a puzzle, each agency's data may seem insignificant on its own, but together, they reveal the wider scope of money laundering's operations. The ability to corroborate different sources of data will empower enforcement agencies to identify real threats in the vast number of suspicious transactions filed. Without this collaboration, crucial connections are lost and our understanding of the threat remains fragmented.

However, Sir, with the influx of additional data from various agencies, the capability to analyse and make sense of the information must be correspondingly elevated. I would like to ask how STRO plans to handle and analyse the large volume of data from different sources, especially as it already receives an average of 43,000 STRs annually. How will it update its methods, enhance the quality of its intelligence and leverage technologies, such as artificial intelligence (AI), to help agencies better connect the dots from these diverse sources?

Furthermore, with improved detection capabilities, how well-resourced are our agencies to respond promptly and effectively to suspected illicit activities? It is crucial that our analytical capabilities and resources keep pace with the increased data flow to ensure we are not overwhelmed with the sheer volume of information, but rather, empowered to act swiftly and decisively.

Second, the Bill expands the toolkit for law enforcement agencies to deal with seized criminal assets.

I support the provision for early sale of seized assets to minimise the cost of property maintenance and preserve the value of these properties. By streamlining these procedures, law enforcement agencies can act swiftly to order the sale of seized properties, thereby avoiding depreciation or undue costs associated with maintaining these assets.

The importance of these measures is underscored by Singapore's largest money laundering case to date, where the $3 billion in seized assets has already incurred around $650,000 in expenses for storage, maintenance and safeguarding. These provisions are therefore crucial for maintaining the efficiency and effectiveness of our law enforcement agencies and ensuring that justice is both swift and financially responsible.

Mr Speaker, once the assets are seized, it is vital to ensure that the Government has processes in place to secure competitive prices in forced sales. The unique nature of some seized assets, which can include luxury goods, rare collectibles and high-value personal items, requires specialised knowledge and handling to prevent significant losses during forced sales. Ensuring that these assets are appropriately appraised and sold through channels that can attract the right buyers at the best possible prices is essential. This not only maximises the return from these seizures but also reinforces the credibility and efficiency of our asset recovery processes. Therefore, I would like to ask whether the current procedures are robust enough to manage these complex and high-value assets effectively. For instance, how will the authorities market the collectible Bearbrick toy figurines or some 250 luxury handbags and watches to recover the best prices?

Third, I strongly support the provisions in the Bill that allow for the continued seizure of properties in cases where the suspects have absconded and introduce significant barriers to claiming properties linked to these individuals.

Dealing with absconded criminals presents substantial challenges, as jurisdictional issues and international legal complexities often hinder swift justice. The ability for authorities to seize and maintain control over assets even when the suspect is beyond our reach is therefore crucial. It disrupts the financial incentives for fleeing, for running away and makes it clear that evading justice will not protect one's ill-gotten gains.

Moreover, by creating legal barriers to claiming properties associated with absconded suspected criminals, we strike at the heart of criminal networks, undermining their financial base and reinforcing the principle that crime does not pay. These measures are essential for upholding the rule of law and maintaining public confidence in our justice system.

Mr Speaker, the AMLOM Bill will add to Singapore’s ongoing legislative efforts to strengthen Singapore's AML/CFT regime. Since 2023, a total of four Bills have been passed in this House to safeguard our systems from exploitation and enhance our defences to protect the integrity of our systems. There is also an ongoing Inter-Ministerial Committee on AML, with findings and recommendations expected in fourth quarter of 2024.

Sir, the intensity of this legislative activity is a very clear testament to the Government's zero tolerance for money laundering. It underscores our commitment to staying ahead of evolving threats by ensuring our legal frameworks remain both robust and adaptive. We address risks head-on as soon as they come to light.

However, Sir, we must ensure that these new measures do not come at the cost of jeopardising Singapore's reputation as a competitive global business and finance hub. I have received feedback and frustrations from affected parties that the account opening process is now protracted and delayed, with layers of checks perceived as disproportionate and not commensurate with the assessed level of risk. Some have expressed concerns that our banks have taken a knee-jerk reaction in the reviewing accounts, issuing retroactive requests for documents and information that are cumbersome and time-consuming to produce, often seen as unnecessary given the accounts' sizes, tenure of the relationship with the financial institutions and transaction patterns.

Wealth owners shared that they no longer feel welcomed in Singapore. Bankers fear their clients are bringing their money to other centres such as Switzerland, Hong Kong and Dubai.

Mr Speaker, I urge the relevant authorities to work closely with the industry to ensure that the implementation of new AML rules is well guided, well understood and implemented proportionately. Most businesses and investors are legitimate and checks must be risk-based, proportionate and considers the history of the relationship and transaction pattern.

Mr Speaker, as we move forward with these crucial reforms, let us strike a careful balance between vigilance and openness. While we are resolute in our commitment in combating money laundering, we must also ensure that our actions reflect the same confidence and clarity that have long defined Singapore as a trusted global financial hub. By implementing these measures thoughtfully and proportionately, we reinforce that Singapore remains a place where legitimate business thrives and where the integrity of our financial system is safeguarded with both strength and wisdom. And in doing so, we send a strong message to the world: Singapore is open for business and we welcome those who seek to contribute to our shared prosperity under the rule of law. I support the Bill.

Ms Sylvia Lim.

Mr Speaker, I will first make some general observations about money laundering in Singapore before raising three queries about the Bill.

Sir, this Bill is part of Singapore's efforts to enhance its anti-money laundering measures. The Workers' Party supports the Bill. Nonetheless, if implemented, this Bill is just part of an entire ecosystem that needs to be scrutinised for gaps and vulnerabilities. Member He Ting Ru will speak later about some areas of concern regarding Singapore's ecosystem.

Sir, Singapore is one of the 40 members of FATF, which conducts mutual evaluations on the ecosystems of countries. The most recent mutual evaluation by FATF on Singapore was done eight years ago in 2016, with the next one due next year.

In the 2016 evaluation, Singapore was assessed to have a mostly robust and competent regulatory system when it came to financial institutions. However, the same could not be said for sectors outside the finance industry, collectively known as designated non-finance businesses and professions (DNFBP). The DNFBP sectors were noted to lack many of the obligations and supervisions that financial institutions were subject to. The 2016 evaluation identified that we did not have a strong awareness of illegal fund flows from foreign predicate offences. It also pointed out that the private sector had weak knowledge of money laundering risks from transnational transactions.

Fast forward to today, Singapore just published its own Money Laundering National Risk Assessment (ML NRA) report. This report concurred that there were significant risks in the DNFBP sector which needed to be addressed.

Last month, this House took a step in the right direction by enhancing the requirements on corporate service providers. Other private sector industries, such as real estate and luxury retail, have rightly been identified as needing to be stepped up too.

To illustrate, we just need to look at the recent $3 billion money laundering case. The money launderers had managed to channel their ill-gotten gains into Singapore with the purpose of washing them through items of tremendously high value. For example, just one of the men involved had purchased 10 condominium units at Canninghill Piers worth $85 million, a transaction in which red flags should have been raised. It has since been reported that some real estate agents were being investigated for giving kickbacks to their clients from the huge commissions earned. It is clear then that an effective AML approach needs not just a robust framework. How it is executed is key. To this end, Member Dennis Tan will seek clarifications later on the adequacy of AML due diligence measures in the recent cases.

I now move to the Bill before us. On this, I have three queries: (a) on restitution to crime victims; (b) on the change in the law to Jeanette Ang's case; and (c) on STRs.

First, on restitution to crime victims. In the Government's recent paper, National Asset Recovery Strategy 2024, it was stated that the strategy had four operational pillars. I was pleased to note that under Pillar 3, the strategy aims to "deliver maximum recovery of assets for forfeiture and restitution to victims". The paper affirmed that Singapore adopted a victim-centric approach towards asset recovery. I agree that where offenders have profited at the expense of victims, then the assets purchased using such fruits of crime should rightfully be delivered to these victims. I, therefore, welcome the provisions, such as clauses 7 and 14 of the Bill, which will help ensure that the value of seized assets is preserved.

One challenge regarding delivering restitution to victims is that money laundering is typically transnational in nature. The victims of crime are often located in other countries. In the National Asset Recovery Strategy report, it was stated that in the five-and-a-half-year period between January 2019 and June 2024, authorities here seized about $6 billion in assets. Out of this, the majority of $4.6 billion is still tied up in ongoing investigations and Court cases. This leaves about $1.4 billion freed up to make restitution, out of which, $416 million, or less than one third, has been returned to victims.

During the Parliamentary Sitting in July, I had asked whether it would be too late for victims to make claims after a Singapore Court had already forfeited the assets. The Ministry of Home Affairs (MHA) had indicated that it would still be open to foreign parties to make requests for MLA even after the Court had made forfeiture orders. For us to assess whether the MLA route is meaningful for victims, could the Ministry confirm how many countries have filed MLA requests with Singapore in the last two years and which three countries have filed the most MLA requests?

Next, I move on to the change in the law arising from Jeanette Ang's case. I have a query on the change in clause 11. Clause 11 will amend the law set out in the 2011 High Court case of Ang Jeanette vs Public Prosecutor to make it easier for the prosecution to prove certain money laundering offences. Let me summarise why.

In Jeanette Ang's case, the High Court had ruled that to prove that an accused had committed money laundering, the prosecution needed to show that the monies in the accused's accounts came from criminal conduct. Clause 11 would remove this requirement. Instead, it would simply be sufficient for the prosecution to show that the accused had a guilty frame of mind, that is, that he knew or had reason to believe that the monies came from criminal conduct.

In explaining the rationale for the change, the Ministry pointed to evidentiary difficulties. It was said that the proceeds of crime could have been channeled through other bank accounts in other jurisdictions before coming to the accused. It was stated to be difficult to obtain documents from foreign banks to prove the trail of monies. I think earlier, the Minister also touched on this point.

Sir, this amendment in clause 11 would fall squarely within the concern raised by the judge in the Jeanette Ang case. The Court in that case had stressed the importance of requiring the prosecution to prove the trail of monies. The judge noted that if the prosecution did not need to prove that the monies came from criminal conduct, then a person could be prosecuted for money laundering in situations where he mistakenly thought that the monies were the proceeds of crime when the monies were, in fact, clean monies. The Court opined that prosecuting such a mistaken person would not further the purposes of the anti-money laundering conventions and laws. With the change in clause 11, how will be risk be addressed?

Sir, finally, on STRs. STRs are a key step through which the authorities are alerted to potential money laundering transactions. Clause 5 of the Bill will increase the jurisdiction of STRO, that is, the Commercial Affairs Department (CAD). STRO will soon be receiving STRs arising from additional legislation, such as the Free Trade Zones Act, Goods and Services Tax Act, Income Tax Act and the Regulation of Imports and Exports Act. In order to facilitate the work of STRO, what can we learn from our experience so far about the filing of STRs?

In answer to a Parliamentary Question (PQ) I filed in January last year, the Minister for Home Affairs revealed that CAD received an average of 37,000 STRs each year from 2019 to 2021, or about 102 reports daily. I believe the numbers are much higher today, a point that Ms Foo Mee Har alluded to earlier.

Sir, what is concerning is that of the STRs filed in those two years from 2019 to 2021, the Minister reported that only 20% of them resulted in or supported investigations eventually. Does that mean that the other 80% were found to be of low quality and not actionable?

Similarly, when it came to digital payment tokens (DPTs), a similar trend is being observed. According to our Money Laundering National Risk Assessment report this year, a majority of the STRs relating to DPTs did not point to any specific offence.

Sir, all this suggests a possible wastage of investigative resources to look into unactionable STRs. It may also suggest that the STRs are being filed defensively to avoid possible trouble down the road.

Being unclear about the threshold that warrants the filing of an STR harks back to the earlier concerns expressed by FATF about the level of private sector knowledge in Singapore regarding AML risk. What is being done to promote a deeper understanding of what STRs should contain?

Sir, let me conclude. The Workers' Party is in support of the Bill. I look forward to the Ministry's clarifications regarding the three concerns I have raised about restitution to crime victims, the change to the law in the Jeanette Ang case and the quality of STRs.

Mr Derrick Goh.

Sir, safeguarding Singapore's financial integrity is paramount to upholding our reputation as a flourishing global financial hub. A robust legal framework for AML/CFT is critical in this endeavour.

This Bill consists of proposals across prosecution, foreign environmental crimes, cross-agency data sharing and others. Taken together with past amendments fronted by MHA, the Ministry of National Development and Ministry of Law (MinLaw), as well as the recently published National Asset Recovery Strategy and updated Money Laundering National Risk Assessment, it underscores an unwavering whole-of-Government emphasis on strengthening our AML/CFT regime amid a dynamic financial crime landscape. On this basis, I support the Bill but would seek some clarifications.

I will begin with the enhanced levers for prosecution of money laundering cases. As is, Law Enforcement Agencies (LEAs) are required to show the complete trail of monies from point of crime to deposit in the suspect's account. Recognising the challenges, especially when crimes originate or when monies are dissipated through accounts overseas, clause 11 of the Bill makes it sufficient for prosecution if the money launderer should reasonably know or believe he possessed criminal proceeds, with no need to prove the complete trail of funds.

This is sensible. A lower bar for prosecution will further deter money mule activities in Singapore while at the same time avail our LEAs with greater capacity to focus on efforts with more systemic outcomes like crippling syndicates with our international partners. That said, while the public cheers every successful anti-crime operation by our LEAs, what is foremost on their minds, particularly victims of scams, is how to get their money back.

Given that LEAs' efforts on illicit funds tracing would be instrumental in determining their rightful ownership and facilitating their proper seizure for restitution, consistent with one of the four pillars in our National Asset Recovery Strategy, may I seek the Minister's clarification whether the amendment will impact the likelihood of asset recovery for Singaporean victims? Will these victims have any recourse for cases where investigations reveal an ownership connection but where details of fund flows are unavailable or are no longer required to be pursued for prosecution?

In addition, as it is challenging to obtain information from foreign agencies and entities, international partnerships remain a crucial lever to combat financial crimes. This will facilitate the greater visibility and timelier confiscation of illicit overseas assets for investigation and restitution to Singapore victims as well as to detain fugitives on the run. On the $3-billion-dollar money laundering case that the Minister had mentioned, the 17 remaining absconders come to mind.

Given that Singapore was the FATF president for two years until June 2024, can the Minister also share further plans to boost international cooperation for more robust investigations and asset recovery?

I now turn to clauses 4 and 13 of the Bill, which would empower our LEAs to act upon the criminal proceeds resulting from foreign environmental crimes, which will be listed in the Third Schedule of CDSA. These proceeds may inevitably flow through Singapore as we are a global financial centre. In addition to closing the legislative gap highlighted by FATF, this move also signals Singapore's commitment to environmental sustainability on the global stage. On this, I have the following clarifications.

First, looking back, can the Minister share the value and number of money laundering cases from environmental crimes that could have been pursued in the past five years had this legislation been in place; and, secondly, clarify if there will, indeed, be retrospective application of this law?

Looking ahead, we may have limited visibility on how these overseas offences evolve. Other than relying on FATF, can the Minister clarify plans to be more proactive in ensuring the Third Schedule continues to be comprehensive and relevant?

Next, I move to the enablement of cross-agency data sharing to enhance financial intelligence. This is pursuant to clauses 18 to 21, which allow IRAS and Singapore Customs to share tax and trade information respectively with STRO to facilitate more holistic sense-making. Agencies like CEA and ACRA will also have more access to information.

I previously spoke in support of the Monetary Authority of Singapore's (MAS') Project COSMIC, or Collaborative Sharing of Money Laundering/Terrorism Financing Information and Cases, and I shared about the parable of the blind men and the elephant, and it is only by collecting information and thereafter pooling them all together, can a more accurate picture and understanding of money laundering risks emerge. I, therefore, welcome the amendment not only because it directly addresses a gap highlighted in Singapore's 2016 FATF evaluation, but more substantially, because it furthers an ecosystem approach to counter AML/CFT.

What is clear from the $3 billion and the other money laundering cases is that, criminals leverage multiple and intertwined points of entry into Singapore's financial ecosystem, be it by asset purchases, shell companies, illegal trade, bank deposits or others. This risk is expected as with any global financial centre, so the key question is: how can we enhance vigilance across the board, by promoting information sharing, pooling and access to risk insights by both agencies and the private sector.

Given the above, may I seek the Minister's view on (a) how may STRO further enhance the collection, pooling and delivery of insights to both the private and public sectors, to boost the effectiveness of entities' CDD, as the first lines of defence; and relatedly, secondly, whether information from agencies, such as IRAS and Customs, can be integrated with COSMIC that was launched in April 2024 this year, in the longer term, for more automated and secure sharing of intelligence across the entire financial ecosystem?

Lastly, I spoke to and I note the amendments related to dealing with seized properties linked to suspects who have absconded, which introduce safeguards to prevent a premature release when investigations are ongoing to trace the absconder. On this, can the Minister clarify the prevalence of previous cases where an absconder had wilfully stalled investigations by staying overseas, and yet, successfully made a claim to seized properties? Was this observed with absconders in the $3 billion money laundering case, which continues to be of public interest?

So, in conclusion, Sir, together with the final key amendment on tightening the CDD thresholds for casinos, this Bill will further align our defences against AML/CFT with international best practices and represent progress in safeguarding Singapore's financial integrity.

Notwithstanding the clarifications, I support this Bill.

Ms He Ting Ru.

Mr Speaker, while the strengthening of our anti-money laundering laws is welcome, the recent $3 billion money laundering case is a good reminder that we have to tackle money laundering comprehensively and I will speak on this today. Like my Aljunied Group Representation Constituency (GRC) colleague, Ms Sylvia Lim, I support the Bill's objectives. However, we cannot just react to the immediate circumstances of money laundering cases, but need to more holistically address structural problems at their root to prevent ourselves from being caught out on the back foot.

It would also prevent a situation where our legislation and regulations, which take time, end up having to constantly play catch-up to outlaw new ways in which criminals evolve to launder illicit funds. The challenge of money laundering that we face has several key facets. First, money laundering can originate from any area within financialised assets, including Single Family Offices (SFOs), cryptocurrencies, fine art and real estate.

Second, we would be best served by a comprehensive omnibus AML Bill that consolidates and streamlines the various existing regulations including CFT, CDSA and MAS guidelines. This unified approach should cover all relevant sectors, including financial institutions to dealers in precious metals. These laws should also be easily understood by all Singaporeans, not just specialised legal and compliance experts.

An omnibus Bill would present an opportunity to future-proof our legislation by introducing a unifying principle of a duty of financial transparency for our intermediaries, which does not require suspicion of a predicate offence and ensures that Singapore does not become a place that facilitates obfuscation of funds.

Third, to effect real change, we must alter the incentive structures to foster a culture of vigilance throughout the financial industry and we should act decisively to establish a whistleblowing fund.

First, individual verticals. Mr Speaker, money laundering is an issue that can only be effectively combated by addressing multiple potential entry points to maintain the integrity of our overall financial system. Given the rapid pace of financial innovation and the increasing complexity of corporate structures, we cannot, realistically, stay ahead of all asset classes unless we legislate proactively. I will focus on three areas not covered by the Bill: SFOs, cryptocurrencies and fine art.

I hope that there can be discussion about the Government's assessment of the risks in these sectors. It will be insufficient to merely state that these areas are not covered by the Bill. We must understand how the Government intends to address these areas and ensure that any gaps are effectively closed.

Mr Speaker, the 2021 collapse of Archegos Capital Management, a US$20 billion SFO, highlights a critical regulatory overlap between AML concerns and systemic risk. Archegos used equity total return swaps to build US$100 billion of portfolio exposure while avoiding disclosure requirements, exposing a significant gap in financial oversight.

In response, the US is contemplating significant regulatory changes. These include bringing family offices under the Investment Advisors Act, mandating ownership and business structure disclosures and enhancing trade reporting under the Securities Exchange Act. Such measures could compel SFOs to provide detailed information about their trades and portfolios. I strongly advocate for similar advanced disclosure requirements for SFOs in Singapore.

This approach would not only bolster our AML defences, but also curb potential market abuses by SFOs. We can hit two targets with a single type of policy instrument. For SFOs, recent events have demonstrated that SFOs can be a significant conduit for illicit funds entering Singapore. In July 2024, Deputy Prime Minister Gan Kim Yong revealed that six SFOs awarded tax incentives were linked to individuals convicted in the recent money laundering case.

The number of family offices in Singapore has grown by nearly 200%. From 400 in 2020 to about 1,100 by the end of 2022. This rapid expansion increases the risk of importing financial crimes from jurisdictions with weaker AML controls. This is a live vulnerability in our AML framework. The current regulatory landscape presents a glaring gap. SFOs are exempt from MAS legislation or licencing requirements under the SFA, as they do not handle third-party funds.

While this is an MHA Bill, cooperation with MAS is key to addressing the risks. What, then, is the current status of the MAS Public Consultation on Strengthening Defences Against Money Laundering Risk in SFOs, launched on 31 July 2023? The consultation proposed that all SFOs maintain a relationship with an MAS-regulated financial institution for AML checks. We have not seen any public updates on actions taken.

If this public consultation has not been operationalised, then, as stated by the Minister of State Alvin Tan in Parliament on 3 October 2023, only SFOs applying for MAS tax incentives are subject to DDCs. This means, SFOs not seeking tax incentives remain outside our AML framework. How do we justify this discrepancy? MAS Managing Director, Mr Chia Der Jiun, stated on 18 July 2024, that Singapore had already issued a set of enhancements for SFOs last year.

Can we get more clarity on this statement? Is this an operationalisation of the July 2023 public consultation? To close the current regulatory gap, I suggest requiring all SFOs, regardless of tax incentive status, to register with and be licenced by MAS. Mr Speaker, there is a related issue of remittance companies working with SFOs. Currently, SFOs are exempt from many due diligence requirements, allowing their transactions with remittance companies to go largely unscrutinised.

Since 2019, MAS regulations have not required remittance houses to seek prior approval for new customers without face-to-face meetings. Are remittance houses now included in the April 2024 MAS Notice PSN01 (Prevention of Money Laundering and Countering the Financing of Terrorism - Specified Payment Services)? If not, what strengthening of remittance house diligence can we expect?

I propose two immediate measures for remittance companies.

First, to introduce cumulative transaction limits for SFOs receiving funds through remittance houses, with an automated system to flag transactions exceeding those limits. Second, reinstate mandatory face-to-face verification for new customers, especially for high-value or frequent transactions involving SFOs.

I will move on to cryptocurrencies. Cryptocurrencies and other digital assets present unique challenges to our AML efforts. Recent data indicates rising illicit fund flows. Chainalysis reports nearly $100 billion has been sent from known illicit wallets to conversion services since 2019, peaking at $30 billion in 2022. Crypto is increasingly used to launder proceeds from off-chain crimes, like drug trafficking and fraud, not just crypto-specific crimes.

In 2022 alone, the FBI reported that US victims lost $2.6 billion to pick butchering and other crypto fraud, with the true scale of losses unknown, as victims are often too embarrassed to report crimes to authorities. There is great technical complexity involved. While blockchains offer transparency, sophisticated laundering techniques involving multiple transactions and intermediaries pose tracing challenges.

Both centralised exchanges with consolidated wallets and decentralised protocols enable the co-mingling of illicit and legitimate funds. This can take the form of consolidated exchange hot wallets for exchanges, such as Binance; but also decentralise co-minglement protocols through crypto tumblers, such as Tornado Cash; or core protocol features, such as Privacy Coins or Monero's ring signatures.

There is a fundamental tension between crypto's desire for instant, irreversible transactions and the need for financial safeguards. While instant transaction finality is desirable in crypto for censorship resistance, it poses risks when it butts up against traditional finance. Our priority must be preserving Singapore's reputation for clean finance over accommodating crypto's preference for irreversibility.

To address these concerns, we should consider methods like increasing off-ramp fiction. Solutions, could include enhancing scrutiny on crypto-to-fiat conversions, including one-to-three-day escrow periods for large transactions, with the time bought to perform on-chain analysis through providers, like Chainalysis, to check for co-mingled funds or suspicious sources both on centralised exchanges and decentralised protocols.

Finally, I will move on to art. The art market, with its high value transactions and potential for anonymity, has recently become an attractive avenue for those seeking to launder illicit funds. The 1MDB scandal provides a stark example of how the art market can be exploited. From May to September 2013, approximately $137 million from an account controlled by Jho Low's associates was used to purchase art at Christie's auctions.

This includes, Jean-Michel Basquiat's Dust Hits for $48.8 million, along with significant works by Alexander Calder and Mark Rothko. Low further leveraged these assets, using 17 artworks to collateralise loans worth $107 million from Sotheby's. Effectively creating additional layers of transactions to obscure the origins of the stolen funds. The scale of this issue is significant and growing with the depth of the market.

In early 2023, China saw a 14% year-on-year increase in art auction sales to $7.9 billion, with the Old Masters' segment alone rising 15% to $1.1 billion. Globally, the art-secured lending market has expanded rapidly, with Sotheby's financial services alone originating more than $10 billion in loans since its inception. The entire global art secured lending space was valued at up to $34 billion in 2023.

This growth in art-related financial services presents new challenges for anti-money laundering efforts. Collateralised portfolios of art can more easily obscure the origin of funds and complicate scrutiny of wealth sources. The US Treasury, recognising these risks, recommended in a 2022 report that certain art market participants be subject to AML requirements, including suspicious activity reporting and KYC requirements.

Given these developments, what steps is Singapore taking to address the risks of money laundering through the art market and other alternative assets? Are we considering implementing AML requirements for auction houses, galleries and art-secured lenders operating in Singapore?

Next, I will move on from individual markets to overarching considerations.

Mr Speaker, given the evolving nature of money laundering techniques, we should consider creating a single dedicated omnibus AML legislation. This would consolidate the various amendments currently scattered across different acts, including the CFT, CDSA and the numerous MAS guidelines. Such consolidation would encompass regulations for financial institutions, professionals, trustees and dealers in precious metals.

This omnibus approach serves two purposes. It simplifies compliance for industry professionals and makes our AML laws more accessible to the general public. Secondly, and more importantly, we should future-proof our legislation by introducing the unifying legal principle and being affirmative in the duty of financial transparency.

Currently, our laws require reporting of suspicious transactions when there are reasonable grounds to suspect criminal activity. I propose we go further. Financial institutions and gatekeepers should have an affirmative duty to ensure the transparency of all the transactions they facilitate. This new standard of care would require reasonable efforts to ensure transparency, which is more proactive than our current suspicion-based reporting. It would involve comprehensive origin and destination checks for funds, verification of the economic rationale for complex transaction structures and enhanced ongoing monitoring for high-risk clients or transactions.

The advantage of this approach is that it does not require suspicion of a predicate offence. Instead, it ensures that Singapore does not become a place that facilitates the obfuscation of funds, which some call "Singapore-washing". We can protect private wealth without enabling financial opacity. This approach allows us to target the core issue of financial opacity, adapting to new financial instruments and practices as they emerge. It positions Singapore as a leader in combating global money laundering while maintaining our attractiveness as a financial hub.

Finally, Mr Speaker, in response to the clear need to shift the culture among our financial gatekeepers, we can approach it from a different angle. Rather than viewing AML measures as mere administrative burdens, we must foster an environment where vigilance is valued and rewarded. In our fight against money laundering, we must recognise the crucial role of whistle-blowers and create a system that incentivises proactive reporting and cooperation. I propose that we allocate a portion of the assets confiscated from money launderers to establish a whistle-blowing fund. This fund would serve to reward those who come forward with valuable information, with the size of the awards proportional to the value of the assets seized as a result of their disclosures.

The US offers an instructive model. In 2023, the US enacted the Anti-Money Laundering Whistleblower Improvement Act as part of the Consolidated Appropriations Act 2023. This legislation, passed unanimously by the Senate, significantly enhances incentives for whistle-blowers. Key provisions include: first, guaranteed awards of 10% to 30% of the financial fines collected for qualified whistle-blowers; second, establishment of a $300 million financial integrity fund funded by criminal forfeitures, fines and victim restitution; and third, expansion of eligibility to include non-US citizens, corporate auditors and compliance professionals. The US experience offers valuable lessons for crafting an effective whistle-blower campaign.

Mandatory awards are crucial. Discretionary awards are rarely paid and have proven ineffective in incentivising whistle-blowers. Confidentiality and anonymity protections allowing whistle-blowers to file complaints anonymously and maintain their anonymity encourage higher participation rates. Compensation for related actions where whistle-blowers are rewarded for enforcement actions by all relevant agencies resulting from their tip promotes comprehensive reporting to all relevant authorities.

For us in Singapore, the $3 billion money laundering case has indicated that there is somewhat of a culture of viewing self-reported checks as administrative hurdles to be avoided in the pursuit of profits. This cultural issue needs addressing in any regulatory framework. I believe that a whistle-blower fund, properly implemented, offers us the best shot of changing the game and mindset around suspicious transaction reporting. In the fight against money laundering, we will need both carrots and sticks.

While the US already has a strong AML framework, as evidenced by its prosecution of the 1MDB case, it still saw the need to enhance the whistle-blower system. Singapore should follow suit, recognising that motivating individuals to come forward is essential to maintaining a clean and transparent financial system.

By implementing these measures, we can turn the current AML lapses into a catalyst for positive change, fostering a culture of integrity and vigilance within our financial sector. A whistle-blower fund, seeded from the ill-gotten gains of the Fujian money launderers, could be the cornerstone of a cleaner, more transparent financial future for Singapore.

Mr Yip Hon Weng.

Mr Speaker, Sir, this Bill represents a significant step in strengthening Singapore's fight against financial crime. The proposed amendments, aimed at enhancing law enforcement capabilities, streamlining asset management and aligning regulatory frameworks with international standards are commendable. While I support the Bill's overall objectives, I would like to seek some clarifications.

First, Mr Speaker, Sir, I have some queries with regard to the potential impact on specific groups. For instance, the reduction of the transaction threshold for customer due diligence checks in casinos, from S$10,000 to S$4,000, raises questions about its effect on small business owners and patrons who rely on these establishments for legitimate recreational or business purposes. In particular, whilst $4,000 is not an insignificant amount, the much-lowered sum of $4,000 may reduce the attractiveness of the casinos to tourists. They may be put off by the additional due diligence process. Can the Minister provide data or studies that justify this reduction and its projected impact on these stakeholders?

We should find a balance between allowing the genuine punters who are here to enjoy the thrill of gambling versus those who are here to game the system and wash their ill-gotten gains in criminal activities. Otherwise, we will be suffocating the very clients who are essential to the casinos to keep afloat and contribute to the tourism traffic in Singapore. Furthermore, the money launderers from the recent high-profile cases or convictions know that they will keep a wide berth from using Singapore as their playground. There is no lack of alternatives in the region for them to move around.

Second, Mr Speaker, Sir, while I understand the necessity of robust customer due diligence measures, I am also mindful of the potential operational challenges and financial burden these measures may impose, particularly on smaller enterprises. The amendments proposed rigorous customer due diligence measures for casinos and other entities. Has the Ministry conducted a cost-benefit analysis on the operational feasibility and financial burden these measures may impose on smaller enterprises? Understanding the rationale and considerations behind implementing such stringent measures across diverse business sizes is critical.

Third, Mr Speaker, Sir, the success of this Bill hinges not only on the strength of its provisions, but also on the effectiveness of its implementation. The Bill emphasises coordination amongst various Ministries and agencies, such as the Gambling Regulatory Authority which oversees the Casino Control Act, amongst others. What measures are in place to ensure seamless coordination and avoid potential jurisdictional conflicts? Can the Minister elaborate on the framework designed to facilitate this interagency collaboration?

Fourth, Mr Speaker, Sir, while I recognise the necessity of information sharing to combat financial crime, it is critical to ensure that individual privacy is protected. The Bill also addresses the sharing of information among Suspicious Transaction Reporting Officers and regulatory bodies. What safeguards are in place to protect individuals' privacy? How do we ensure that the information shared is used solely for its intended purpose? Is there a timeline when information shared needs to be destroyed after its intended use? Given the sensitive nature of financial data, I believe it is paramount to address any potential privacy concerns comprehensively.

Fifth, Mr Speaker, Sir, it is important to understand how we measure up to international standards and best practices. The Bill aims to align with recommendations from FATF. Nevertheless, it would be valuable to understand how Singapore's approach compares with international best practices. Can the Ministry provide a comparative analysis highlighting why certain FATF recommendations were adopted while others were not?

Sixth, Mr Speaker, Sir, it is essential to ensure that the measures introduced in this Bill remain effective in the face of constantly evolving financial crimes. What mechanisms are in place to review the effectiveness of the new measures and make necessary adjustments? Regular evaluation will ensure that the legislation remains relevant and effective in combating evolving financial crimes.

In conclusion, Mr Speaker, Sir, Singapore has long been recognised for its commitment to upholding international standards in the fight against financial crime. This year alone, we have seen a slew of Bills introduced to tackle various aspects of financial crime, demonstrating our unwavering dedication to this critical issue. Despite these Bills, we have also seen a rise in the number of people wanted for money laundering and financial fraud in Singapore.

While I commend the Government for its efforts in introducing this Bill, I believe that it is essential to carefully consider the potential impact on specific groups, ensure operational feasibility and cost-effectiveness and establish robust safeguards for privacy and data protection. A thorough understanding of the comparative analysis with international best practices and the implementation of robust evaluation and review mechanisms will further strengthen this Bill and ensure its long-term effectiveness in safeguarding Singapore's financial integrity. I support this Bill.

Mr Dennis Tan.

Mr Speaker, this Bill seeks to amend certain Acts to give effect to certain recommendations of FATF to enhance the legal framework for preventing, investigating and prosecuting offences relating to money laundering and terrorism financing and so on. The recent infamous $3 billion money laundering case has cast a negative spotlight on Singapore. It is, therefore, important that the right lessons are learnt and applied, and laws and procedures are enhanced to prevent or minimise similar cases in future.

Mr Speaker, I would like to seek a clarification in respect of the amendment under clause 17 of the Bill, that is to say, section 372 of the CPC 2010. In MHA's press release of 2 July 2024, it was stated at paragraph 16 that, I quote, "...taken together, these amendments will prevent the premature release of seized properties while investigations are ongoing and avoid a situation where an absconded person evades investigations by staying out of Singapore and makes a successful claim to the seized properties because investigations have not been able to proceed". May I ask the Minister whether there has been a recent precedent, such as a recent case or precedent, such as from the recent $3 billion money laundering case, or has there ever been any precedent at all where an absconded person evaded investigations by staying out of Singapore and then made a successful claim to the seized properties as investigations have not been able to proceed?

Mr Speaker, in the recent $3 billion money laundering case, we read of mostly Cambodian nationals of Chinese origin setting up residency in Singapore, buying expensive real estate, posh cars and other types of valuables and properties. We read that, and I quote, "millions of dollars earned over the years from an illicit gambling ring were turned into luxury cars, extravagant watches, properties in Singapore's most lavish neighbourhoods, jewellery, designer goods, cryptocurrency and cold hard cash". And this is from a media report.

So far, we read of media reports of kickbacks received by property agents or bankers taking cuts for property purchases. But the purchase of these properties required various parties or professionals who should be obligated to do AML due diligence checks required by the authorities.

The money launderers could have brought monies into Singapore either by cash or by remitting monies to Singapore via their existing bank accounts. Where money was remitted to bank accounts in Singapore, the banks located in Singapore would have had the chance to do their AML due diligence searches. For those who bought real estate here, besides the banks, the real estate agents as well as the conveyancing lawyers would have been required to do AML due diligence checks, including especially on the source of funds they put up for payment.

I would like to ask the Government for the banks, lawyers, jewellers or other persons who helped with or handled any of the sales transactions for the different types of properties on behalf of the members of the $3 billion money laundering ring, whether all of them carry out the necessary AML due diligence searches. Did they file any suspicious transactions report? And if so, what were the authorities' responses to such reports?

Mr Speaker, a few years ago, I was among an early group of practitioners who had to complete a prescribed AML/CFT course and an AML/CFT proficiency test as part of new requirements by ACRA for anyone seeking to register or renew his registration as a Registered Filing Agent (RFA) of companies. The programme aims to ensure that RFAs are well equipped to comply with AML/CFT regulations through continuous education. RFAs have to fulfil the new requirements once every two years as a precondition for their renewal.

I passed the test but, subsequently, I did not remain an RFA. However, the course and the test left me with deep impressions. In particular, while strict adherence can be onerous, if all professionals and service providers were to take the AML due diligence checks seriously and conscientiously, one would have thought that they would greatly help to prevent, or at least to minimise, the bringing in or the utilisation of funds which are subject to prohibitions under the AML regulations.

So far, not much is directly disclosed about AML due diligence efforts of the bankers, property agents, lawyers or other service providers or sales agents who serve or assisted the convicted members of the $3 billion money laundering case. Will the Government share with this House what are the lessons learnt from this case, if any, in respect of the adequacy of the current AML due diligence efforts required of the banks, property agents, sellers of precious stones or metals, lawyers and other service providers involved?

Mr Speaker, I look forward to the Minister's clarification. Notwithstanding the clarifications I seek, I support this Bill.

Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 3.50 pm. Order.

Sitting accordingly suspended

at 3.31 pm until 3.50 pm.

Sitting resumed at 3.50 pm

[Deputy Speaker (Ms Jessica Tan Soon Neo) in the Chair]

ANTI-MONEY LAUNDERING AND OTHER MATTERS BILL

[(proc text) Debate resumed. (proc text)]

Mr Leong Mun Wai.

Mdm Deputy Speaker, before I begin, I would like to declare my interest as the founder and CEO of a fund management firm. With my past experience as the head of a leading local stockbroking company, I am aware of the challenges and temptations faced by financial institutions with regard to money laundering.

The Progress Singapore Party (PSP) welcomes the move by the Government to enhance the legal framework for preventing, investigating and prosecuting money laundering offences through this Bill.

Over the past year, many Singaporeans have been shocked by the scale of the $3 billion money laundering scandal. Our nation's reputation as a rule-based financial centre has taken a great hit.

As one of the premier financial hubs in Asia, we are structurally exposed to money laundering. People from all over the world want to park their money here because they know that their money will be safe. This has created huge economic benefits for our financial industry and PSP recognises this.

But we want the money to be legitimate. Integrity is the most enduring competitive advantage for a global financial centre. We believe that even if the trade-off for taking a tougher stance against money laundering is slower growth of our financial services industry in the short term, it is a worthy trade-off in the long term.

It is vital that we take steps to protect our reputation by tightening our legal and sentencing framework to deter money laundering. We support the Government's decision to reduce the standard of proof for money laundering offences.

Under clause 11 of the Bill, the prosecution will no longer need to show under the CDSA the direct link between the criminal conduct and the monies allegedly laundered in Singapore. It will be sufficient for the prosecution to prove beyond reasonable doubt that the money launderer knew, or had reasonable grounds to believe, that he was dealing with criminal proceeds. This is a step in the right direction, which will enhance the prosecution's ability to pursue and prosecute money launderers.

However, I am also concerned whether this will also lead to banks adopting an overly cautious approach towards restricting or closing bank accounts out of concern for potential legal consequences, thus hindering legitimate transactions. Does the Ministry envision any safeguards to protect legitimate customers who may be inevitably caught in such a scenario?

We also support the move to reduce the threshold for casino operators to perform customer due diligence when they enter into cash transactions with patrons or receive deposits. However, at the same time, I would like to know whether there is a maximum cap on the amount of cash that a casino can accept in one transaction. For example, are our casinos allowed to take in cash exceeding $1 million in one go?

Madam, most importantly, even though the Bill has strengthened the legal framework for money laundering offences, we are concerned that the sentences that have been meted out to the recent $3 billion money laundering case do not provide sufficient deterrence against Singapore being used as a base to launder the proceeds of illicit activities.

We maintain the mandatory death penalty for serious drug trafficking offences because of the immense harm caused to drug abusers, their families and the community. But are we doing enough to punish money launderers who may be trying to conceal money which originated from drug trafficking or other serious illegal activities?

In his written reply to my PQ on 8 May 2024, the Minister for Home Affairs told me that the risk of imprisonment is an important deterrent against money laundering. I agree to that.

However, to an ordinary Singaporean, the jail terms of 13 to 17 months meted out to the nine men and one woman involved in the $3 billion money laundering case appear to be relatively short, especially given that the CDSA provides for jail terms of up to three to 10 years, depending on the nature of the money laundering offences.

In recent years, there have been an increasing number of Singaporeans being caught for being money mules. In many cases, they handed over their bank accounts and private information in exchange for small amounts of money, usually in the range of hundreds of dollars each time.

Some of these offenders have been sentenced to imprisonment for periods of two to three months for their offences. In comparison, the offenders of the $3 billion money laundering case got to enjoy a luxurious lifestyle worth millions of dollars in Singapore for several years before they were caught. Are the jail terms of 13 to 17 months proportional to the crimes they have committed, when compared to those of the money mules?

It would be appropriate for me to ask at this juncture this question. With money laundering in the billion-dollar scale only attracting up to 17 months of imprisonment, what sort of money laundering crimes did the Government envision would potentially attract the maximum imprisonment sentences under Part VI of the CDSA?

The Inter-Ministerial Committee Reviewing Singapore's Anti-Money Laundering Regime will publish its full findings and recommendations in the fourth quarter. PSP hopes that one of its recommendations will be to strengthen the sentencing regime and increase the deterrent effect against money laundering by way of imprisonment.

We understand that MHA most recently reviewed the adequacy of the prescribed penalties against money laundering only in 2023. However, we believe that the sentencing regime should be reconsidered, given the relatively short jail terms that were handed down to those who had been caught in one of the largest anti-money laundering operations worldwide.

Can I also ask the Minister if the Sentencing Advisory Panel will consider issuing an advisory on the sentencing framework for offences under the CDSA based on the lessons learnt from the $3 billion money laundering case?

Finally, for any anti-money laundering regime to be effective, besides the perpetrators, strong actions against the gatekeepers like the banks and other financial institutions who contravene the rules are necessary. Can the Minister tell us for each of the banks and corporates involved in this case, the actions that have been taken against them and the internal actions these institutions have taken so far to strengthen their AML Regime?

Following the review of the Inter-Ministerial Committee, we hope we will further strengthen the penalties against banks, other financial institutions and their senior management who contravened anti-money laundering rules. Mdm Deputy Speaker, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] Fellow Singaporeans, the $3 billion money laundering case has severely damaged our country's reputation as an international financial center and has had adverse effects on our society. PSP supports the Government in amending several related laws following the money laundering case, including the CDSA Bill being discussed today, to strengthen our enforcement efforts against money laundering.

PSP believes that the most important aspect of the anti-money laundering regime is proper sentencing. Many Singaporeans feel that the 13 to 17 months of imprisonment meted out to the 10 individuals involved in the $3 billion money laundering case is not sufficient to deter and prevent money laundering in Singapore. We would like to ask, under the existing CDSA, whereby money launderers can be sentenced to 3 to 10 years of imprisonment, why the offenders in the $3 billion money laundering case were only sentenced to 13 to 17 months? Furthermore, we hope the Minister can clarify, under what circumstances that money launderers can be sentenced to the maximum penalty?

PSP believes that in order to prevent money laundering and uphold Singapore's reputation and moral values in our society, we should increase the sentencing of money launderers and take strong measures against the implicated financial institutions.

(In English): PSP supports the Bill. For country, for people.

Mr Neil Parekh.

Mdm Deputy Speaker, thank you for allowing me to participate in this debate on this important legislation.

This Bill seeks to send a strong signal to the international community that Singapore is fully committed to combating money laundering.

I also believe the importance of this Bill in strengthening anti-money laundering and counter-terrorism financing measures can improve trade relations with other countries, as partners will have greater trust in Singapore's regulatory framework.

Singapore’s compliance with the recommendations made by the Financial Action Task Force will increase confidence among international investors and financial institutions and help attract more foreign capital. This is quite evident from the healthy inflow of investments we continue to see, as reported in in the recent announcements by the Economic Development Board (EDB) and by the Ministry of Trade and Industry (MTI).

By cracking down on illicit activities, the Bill helps protect legitimate businesses from being undermined by unfair competition from entities engaged in money laundering or financing terrorism.

I believe the Bill may also lead to development of new services and products in the financial sector such as advanced compliance software, consulting services, and anti-money laundering and counter terrorism financing training programmes.

Furthermore, the need for enhanced compliance can spur innovation in Regulatory Technology or regtech, leading to the development of new solutions to help businesses comply with the regulations more efficiently, positioning Singapore as a leader in the regtech innovation.

However, despite many favourable outcomes for the overall economy, this Bill could lead to certain challenges for businesses especially SMEs.

Implementing stringent AML/CTF measures often requires significant investments in technology, staff training, and process changes, which can be financially burdensome. Compliance costs may also increase substantially leading to closure of some SME businesses. While some consolidation in this sector may be necessary there is also a risk that overly stringent regulations might stifle innovation and entrepreneurship. Businesses might be hesitant to engage in new ventures or adopt innovative practices due to the fear of non-compliance or excessive regulatory scrutiny.

Mdm Deputy Speaker, I have a few clarifications for the Minister.

First, regarding the scope and application of this Bill, could you please specify which businesses and sub-sectors are directly affected by the new AML/CTF regulations? Are there any exemptions for small businesses or any specific sub-sectors?

Secondly, is there a stipulated timeline for businesses to comply with the new regulations? Also, are there any transitional provisions provided to help businesses adjust to these new requirements?

Thirdly, how do our regulations align with international AML/CTF standards and the recommendations of the Financial Action Task Force? Are there any specific international guidelines that businesses should be aware of?

Lastly, could you please also clarify the procedures and measures for ensuring privacy and security of collected customer data?

Mdm Deputy Speaker, notwithstanding these clarifications, this Bill has my full support.

Mr Zhulkarnain Abdul Rahim.

Mdm Deputy Speaker, I rise in support of this Bill. Singapore has a comprehensive Anti-Money Laundering Regime centered around the three pillars of prevention, detection and enforcement. This Bill helps us to continue to be responsive to new threats in the future that threatens the status and confidence in Singapore as an international financial hub.

My speech is focused on the amendments: firstly, to remove the requirement to trace back the assets or proceeds as benefits of criminal conduct overseas; secondly, the early sale of seized assets; and lastly, tightening the criteria for third parties to claim assets linked to absconded persons still under investigations.

On the first amendment, the law as it currently stands requires the Prosecution to prove that property or assets are benefits of criminal conduct. This is quite difficult to do especially in sophisticated financial transactions, with layers after layers of sophisticated transactions, across various jurisdictions and split over different amounts. Some are even converted into other types of assets to further mask the transactions.

It will be tough to conduct the tracing exercise to the predicate offence which usually occurs overseas. In fact, even if the account or asset holder admits that he or she has acted as a money mule or has given up control of the account to receive and transfer such illicit funds, that alone may not be enough to prosecute. As such, I welcome the amendments to remove this requirement.

Jurisdictions like Hong Kong, Canada and Australia have already done away with such requirement to prove that the property or asset in question came from or are benefits of the criminal conduct.

However, I have some clarifications and suggestions.

Firstly, I understand that there is still a requirement to prove whether or not the subject was involved in the financial or property transfer. May I confirm that this is still the burden of proof for the Prosecution to discharge? And that it is not presumed that the accused is in receipt of illicit funds just because the last transfer of monies went into his or her account.

Secondly, what level of involvement would the subject have to be, in respect of the transfer? Is this to be referenced similarly to an objective test as to whether or not he or she ought to have known that such monies were criminal proceeds?

Next, I welcome the amendment to allow for the early sale of seized properties. This is especially important for seized assets like vessels or specialised items. In my previous experience as a maritime lawyer, I arrest vessels to secure maritime lien and admiralty claims on behalf of clients and if no release has been made, then through the Sheriff, the arrested vessels will be put up for sale.

However, the process will be long and expensive. While the vessel is still under arrest and if the owner has abandoned the vessel, the arresting party has to foot the bills for the wages and sustenance of the crew, security guards, repairs and maintenance, bunkering costs, insurance coverage, port dues, and many other expenses. And the longer the vessel sits under the arrest, the higher the exposure of liability on the arresting party. For instance, in one case that I had, the Master or the captain of the vessel, fell and suffered a chipped tooth and needed medical attention. In another case, a homesick crew with special extenuating circumstances had to be repatriated and change of crew had to be made.

All of these means more costs and risks will be saddled on the arresting party. We cannot have the same situation saddled on our law enforcement agencies as this will be a burden on taxpayers.

For specialised items that are being seized, they also may require special storage with the right temperature and humidity conditions to ensure that the value and veracity of the items are preserved. Handbags, watches and other high luxury items fall into such category.

I have six clarifications.

Firstly, how much has been spent by MHA annually to preserve or maintain such seized items? What is this in terms of percentage of the value of the seized assets? Will MHA look at setting a standard threshold set for the costs of maintenance in terms of percentage of the value of the seized assets, beyond which it will be unfeasible to continue to retain those assets under seizure because this then will provide clear guidance?

Secondly, I understand that the CPC and CDSA will be amended to allow the Court to order the sale of the seized or restrained property without the consent of all parties involved. However, what are the safeguards to balance the rights on interested parties in the assets? For example, will ample notice be given by way of advertisement to ensure that any interested parties can attend the Court hearing to be heard before the sale of the assets?

Thirdly, before determining that such assets can be sold, what are the steps that can be taken to ensure that any evidential value from the property or asset has been extricated and preserved? For example, through the cloning of any metadata, photographs and videos of the assets, anything and everything that may have evidentiary value to the investigations must already been taken, before such assets can be sold.

Fourthly, the prerequisite to such early sale is that the asset may depreciate in value or undue costs will be involved in the maintaining of the property and that the sale will be in the interests of justice. Hence, will the relevant law enforcement agencies consult industry valuation experts who are familiar with such properties or assets to determine the risk of depreciation?

Fifthly, what are the safeguards to ensure that the sale of the seized assets is for the right value and made to genuine purchasing parties. For example, in the standard Sheriff’s Condition for Sale of vessels, the Court's approval will be required to sanction any accepted bids below the appraised value.

Lastly, what are the safeguards to ensure that the value of the seized assets continue to be protected even after the sale order has been made? For instance, it will be better to approach a calibrated sale rather than flooding the market with many items, all being put up to auction all at once. Alternatively, married deals through specialised auction houses for a specific group of accredited bidders, can be made to ensure the exclusivity of the offer and higher bid returns.

Next, on third parties' claims to properties linked to absconded persons. Usually, the perpetrators not only mask their illicit activities and transactions through layering of transfers and transactions but also through putting such assets in the names of proxies like family members or friends. Hence, I welcome the amendments to the CPC to tighten the criteria of any ownership claims by third parties over assets linked to absconded persons. No longer can such parties hide behind the excuse that these ill-gotten gains are gifts made to them.

The amendments bring the position in line with the common law principle in AB Partners Pte Ltd v PP. In any case, the common law principles of presumption of advancement or gift still apply to family members like spouses or children. Hence, it is incumbent upon this group of third parties to prove that if the assets are not gifts, how are they able to afford the assets with regard to their own income, revenue or savings. This is only fair.

I do have a small clarification in this regard. In law, there is the concept of "equity's darling" – a bona fide purchaser for value without notice. Hence, family members or friends who are truly not proxies need not fear this amendment if they can show how they gave value to the acquisition and how they came into ownership of such asset. However, what about gifts or donations made or pledged to charities or foundations with a social cause? Will such assets be clawed back, given that they are linked to the absconded persons?

In this regard, I have a suggestion. In a previous response to the Parliament, MHA has explained that the forfeited assets and cash will go to the Consolidated Funds. Perhaps, we can set aside a portion of such forfeited assets to be put up to benefit the larger community by establishing some criteria or guidelines.

For example, in Australia, the Proceeds of Crime Act 2002 establishes a scheme to confiscate proceeds of crime and allows for such confiscated funds to be used to benefit the community. Under section 298 of the Australian Act, confiscated proceeds of crime can be reinvested in programmes for relevant purposes, including crime prevention and law enforcement. There is also a call for a grant to be provided for deserving programmes under such a scheme.

If Singapore has a similar lever, then such assets that have been pledged or donated to charities that are recognised and accredited in Singapore can also stand to benefit those charities, assuming that the charities played no part in the commission of the offence.

Mdm Deputy Speaker, notwithstanding the aforesaid clarifications, I stand in support of the Bill.

Assoc Prof Razwana Begum.

Mdm Deputy Speaker, I stand in support of the Anti-Money Laundering and Other Matters Bill. The Bill seeks to amend several other Acts and aligns with the recommendations of the Financial Action Task Force.

[Mr Speaker in the Chair]

Mr Speaker, the $3 billion money laundering case uncovered last year has captured the public's attention. Many wondered how this was possible in a country that is known internationally for being safe, crime and corruption free, and having sound governance. Such cases not only contribute to a negative image of Singapore, they also have direct implications on the public safety and security of Singapore and Singaporeans.

Mr Speaker, Singapore is a global financial hub, which makes it an attractive target for illicit financial activities. Measures that enhance anti-money laundering improve the integrity of our financial systems and foster trust and confidence among domestic and international investors and stakeholders. Additionally, they assist to protect the country's reputation, deter criminals from exploiting our financial infrastructure and safeguard the broader economy from the adverse effects of financial crimes.