Singapore is a veritable paradise for wealthy people all over the world, because Singapore can not only ensure the personal safety of rich people, but also ensure their property safety. This " New York Times " specializes in this article to talk about this matter, likening Singapore to "a good place to replace Switzerland, where rich people hide their money." Let's read original text :
Last year, Taiwanese-American Henry Hsiaw was accused of not filing a tax return. In this case, U.S. law enforcement officials put pressure on Swiss bank UBS.
For the wealthy, Swiss banks used to mean the highest level of privacy, but the world has changed now. UBS has paid a $780 million fine and disclosed details of thousands of Swiss bank accounts held by Americans, including one controlled by Henry Xiao.
However, UBS did not hand over Henry Xiao’s account information in Singapore Bank. UBS said the information is protected by the bank confidentiality law of the Asian city-state.
Singapore is an increasingly popular destination for money that doesn't want attention, and this legal controversy shows that the country is under increasing pressure. Boston Consulting Group estimates that the country's strict bank confidentiality laws have attracted $1.1 trillion in foreign capital. Singapore is now growing faster than Switzerland, and the company expects it to become the world's largest multinational financial center by 2028. But in the face of more efforts by the international community to combat tax fraud and foreign complaints about Singapore’s ineffective measures to stop illegal funding, Singapore has taken action to show that it is taking criticism seriously.
It has detained several local and foreign bankers and closed branches of two Swiss banks, whose involvement amounts exceed US$3 billion, allegedly misappropriated from 1Malaysia Development Berhad (1MDB), a part of which has been in several banks in Singapore.
Ravi Menon, head of Singapore's top financial regulator, said the 1MDB case shows that Singapore can do better. “There is no doubt that the recent findings have damaged our reputation as a clean and reliable financial center,” Menon said in a speech in July, adding that “the authorities are feeling misleading with these negligence in terms of financial control.” The Straits Times, a Singaporean newspaper, warned the city’s banks about 1MDB in an editorial last year. "Business is part of Singapore's DNA," the article said, "but the business that facilitates suspicious transactions is not included."
Singapore's position shows that global regulators are beginning to pay close attention to those low-key money. The Financial Action Task Force, a multinational advisory group set up to combat money laundering, said last year that Singapore’s financial institutions “have less knowledge of the risks of illegal capital inflows and outflows”.
"Singapore is the new Switzerland", independent economist Xie Guozhong said that Xie Guozhong was originally the chief Asian economist at Morgan Stanley. In 2006, he was dismissed by the company after a private email calling Singapore a money laundering center was exposed.
He said, "Singapore has filled the gap it has left since the U.S. Department of Justice began chasing Swiss banks to conceal tax avoiders a few years ago."
Singapore's highest financial regulator The Monetary Authority of Singapore (The Monetary Authority of Singapore) objected to the allegation. “There is no doubt that the rapid influx of private banks into Singapore will lead to an increase in the risk of illegal capital flows,” a spokesperson said in a written statement.
However, Singapore will not tolerate its financial system being used as a shelter or channel for illegal capital flows.
Singapore has positioned itself as a one-stop service center for Asian wealthy people. The rise of China created a new generation of wealthy people in the 1990s, while Singapore encouraged private wealth managers to use the city as a base in the region.
Today, in Singapore’s financial district, offices of major banks such as Credit Suisse, Julius Baer and UBS are located among glittering skyscrapers surrounded by centuries-old, low-rise buildings built during the British colonial period.
billionaires can fly to the private jet terminal here, gamble at the private high-bill tables of two new casinos, and buy and sell at the world's first physical settlement diamond exchange.
They can store artworks, wine, gems or gold bars in Le Freeport, a super safe, fully duty-free facility based on similar facilities in Switzerland as a template, known as "Fort Knox in Singapore". The
MDB scandal casts shadow on Singapore's success. U.S. officials are working to recover more than $1 billion in funds, which they claim were withdrawn from 1MDB and eventually spent in the United States by Malaysian Prime Minister Najib Razak's family and friends. Last year, U.S. officials said in a civil lawsuit that the money was used to buy luxury homes in places like Manhattan and Los Angeles, funding the Hollywood movie The Wolf of Wall Street and buying oil paintings by Picasso and Monet.
The focus of officials is Low Taek Jho (also known as Jho Low), a young Malaysian financier who has made friends with Paris Hilton and others. US officials said that in the 1MDB money laundering case, hundreds of millions of dollars were able to enter the United States legally, and Jho Low played a crucial role. Both Zho Low and Najib denied that they had engaged in illegal acts.
"1MDB and other things are disruptive for Singapore," said Chris Leahy, co-founder of BlackRock, a Singapore-based corporate consulting and investigation company.
htmlIn November, a Singapore court sentenced Yang Jiawei, a former private banking specialist at the local branch of Swiss Bank of Switzerland (BSI) to 30 months in prison for tampering with evidence and covering up his relationship with Jho Low. In March, Singapore regulators punished Tim Leissner, a former bank employee of Goldman Sachs, who had worked with 1MDB, banning him from trading securities for 10 years.'s lawyer representing Resner did not respond to a request for comment, and Goldman Sachs said the company is working with Singapore.
Singapore is adopting stricter controls ahead of schedule. Next year, new rules on global financial information exchange between the Organization for Economic Cooperation and Development member states will take effect in Singapore.
Freeport has also received additional close attention. In its September report, the Financial Action Task Force said in some cases, Singapore authorities are not well aware of what is happening in the free port, given the risks.
Singapore customs officials said they have "strong regulatory measures" to prevent illegal activities. Lincoln Ng, the chief executive of the Freeport and former Singapore police officer, said local regulators understand the activities through strict inspections and audits.
Freeport is in the hands of Yves Bouvier, a Swiss art dealer who lives in Singapore, who leases the space here to companies that house goods on behalf of their customers. Tenants also include Natural le Coultre, Bouvier's own art transport and warehousing company, which said it has done due diligence on customers and goods.
"In short, we know what we are dealing with, and we know who we are dealing with," said Christian Pauli, director of art logistics at Natural le Coultre.
This facility has both European-style exquisiteness and security measures that seem to be from 007 movies. The private vault is located behind an 11-ton steel door surrounded by over 15 inches of thick scrubbed concrete walls. Three different people are required to unlock the door. Some tenants, such as companies dealing with precious metals, will also install additional cameras, facial recognition technology or iris scanners.Once the
vault is leased to customers, the Freeport manager cannot enter. The customers here include Christie's and other companies that provide art storage services; companies that specialize in gemstones, precious metals and wines; and banks that store gold bars. In marketing materials, many tenants emphasize the confidentiality of the company and use it as a selling point.
As for Taiwanese-American Henry Xiao Yiyan, lawyers said the Justice Department chose a particularly tough approach. Independent lawyers said the initial action taken by the U.S. prosecutors were based on an extraordinarily powerful summons that allowed them to track money that Swiss banks had previously been involved in prosecution and were later deposited into Singapore.
UBS withdrew the allegations after UBS provided several Singapore account information for Henry Xiao. Henry Xiao, who worked as an executive in the telecommunications industry, moved to China in 2007 and was unable to contact him for comment.
UBS said it has complied with all applicable laws, but has not specified it in detail. Singapore's financial authorities said Singapore officials can provide assistance as long as they have legal reasons.
lawyers said that this is the first case of similar cases in the United States targeting Singapore accounts, which is equivalent to a warning.
It's a "nuclear option", said Jeffrey Neiman, a Florida lawyer, who served as one of the leading prosecutors in a federal lawsuit against UBS Switzerland branch in early 2009.
He added: "In any jurisdiction, the last death knell of the confidentiality system is that a bank gets a subpoena, chooses to take action, and then fails in court."
article is reprinted from "New York Times"
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