Friday, April 05, 2013

ICIJ's Offshore Files: The Singapore Link?

In 2010, the US Diplomatic Cable leaks caught the public's attention in a big way with the global media going on a frenzy of reporting about all the 'juicy' information emerging from leaked US Embassy cables. 

I just glanced through the website of the International Consortium of Investigative Journalists and it didn't take me long to realise that the information released by them on 3rd April 2013 about the network of global offshore money is potentially far more explosive that the Diplomatic Cable leaks.  ICIJ claims that its director Gerard Ryle managed to obtain a hard drive containing 2.5 million files of corporate data that points to a web of hidden financial interests alluding to a possibility of tax evasion and money laundering.  Packed with information about 120,000 offshore companies and 130,000 individuals worldwide, this hard drive and the investigative story emerging out of it is going to adversely affect many reputations (at the very least).  The story is slowly emerging as ICIJ releases information gradually.  It has been the result of a 15 month research project representing a global collaboration of 86 journalists from 46 countries.

What got me interested in the story was an email from the Center for Public Integrity (whose newsletters I subscribe to).  I clicked through to the website of the ICIJ and found this story:
This line caught my attention:  "Analysis by ICIJ’s data experts showed that the data originated in 10 offshore jurisdictions, including the British Virgin Islands, the Cook Islands and Singapore."

I looked through the site for information involving Singapore and found these two stories:
"Deutsche Bank Helped Customers maintain hundreds of offshore entities"
"Ferdinand Marcos' daughter tied to Offshore Trust in the Caribbean"

The story on Deutsche Bank alleges that more than 100 customer consultants at Deutsche Bank Singapore helped to create or manage 309 offshore entities for its clients.  Germans attempting to move their funds in Swiss Bank accounts to Singapore or to other tax havens through Singapore is not entirely news.  In October 2012, the German and Singapore governments agreed on a deal to tackle this problem.  The Singapore government agreed to designate tax crimes as "predicate offences" for money laundering.  As reported by the Financial Times:  "Under the deal between Singapore and Germany, the two counties could exchange information for the enforcement of domestic tax laws “of the requesting country”, expanding this to all types of tax, not only taxes on income and on capital. Nor will the exchange depend on the taxpayer being resident in either country."

Interestingly enough, the Monetary Authority of Singapore has just published on 28 March 2013 a Response to the Feedback Received on the Consultation Paper to designate Tax Crimes as Money Laundering Predicate Offences.  The target date for implementation is 1 July 2013.  The ICIJ report on offshore money implicating Singapore as one of the destinations has come at just about the right time.  It will be interesting to see how banks and financial institutions are taken to task by our authorities. 

Apart from the German story, the story about Ferdinand Marcos' daughter throws up a Singapore link.  Imee Marcos is allegedly one of the beneficiaries of Sintra Trust, formed in the British Virgin Islands in 2002.  She is also allegedly a financial adviser to Sintra Trust.  One document found apparantly shows a United Overseas Bank account.  The regulatory authorities in Philippines have indicated interest in the revelations and there could be explosive consequences for Imee Marcos' political career. (As a lawmaker, she is duty bound to disclose her financial interests.  As the daughter of the former dictator, there will be much speculation as to whether the funds are part of her father's corrupt gains.)

Singapore readers will find the following extract from the ICIJ article to be of particular interest:

The Sintra Trust was created in June 2002 with the help of a Singapore-based offshore services firm called Portcullis TrustNet.

The documents indicate that in her role of financial advisor, Imee Marcos had powers to direct the investment of trust assets held by banks and other financial institutions.

The so-called “settlor,” “trust protector,” and “master client” listed in the documents is Mark Chua, a Singapore-based businessman said to be Imee’s new boyfriend. The settlor refers to the person who creates the trust by transferring a certain asset that he or she owns to the trustee, who then assumes legal ownership of the assets on behalf of the beneficiaries.

Chua has not replied to PCIJ’s questions on his role in Sintra Trust.

In June 2005, Imee was named investment adviser of the Sintra Trust, according to a document uncovered by ICIJ. As investment adviser, she can direct any financial institution in the purchase, sale, liquidation and investment of the trust assets. Chua also became an investment advisor for the trust in 2006.

Although the Sintra Trust is located in the British Virgin Islands, another PCGG official – the commission tasked with recovering the Marcoses’ assets – said he does not find it surprising that its servicing company, Portcullis TrustNet, is based in Singapore, which has one of the toughest financial secrecy regulations in the world. It ranked No. 6 in the 2011 Financial Secrecy Index of the Tax Justice Network, a London-based group that campaigns against tax havens.

“We’ve had a hard time getting cooperation from Singapore in our requests for international mutual assistance on criminal matters,” said the PCGG official, who asked not to be identified because of the confidential nature of his work for the agency. stands for the 'Presidential Commission on Good Government' and PCIJ stands for the 'Philippine Center for Investigative Journalism')

The following update is posted on the website of Portcullis TrustNet:

"Portcullis TrustNet Group is aware of media reports with information on our Group. We take a serious view of unauthorised disclosure of any confidential information. We are looking into the matter. Meanwhile, controls and safeguards are in place to protect client confidentiality. We are confident that our business activities and client services are legitimate and conducted in compliance with laws and regulations in the jurisdictions in which we operate."
  The Philippine government has, in the meantime, commenced a probe into the Sintra Trust.   As ICIJ releases more details over the next few days and weeks, thinks could get pretty nasty for some big names in the world.  In the meantime, it would be interesting to see how much of these funds have moved through Singapore without our detection.  I am sure that MAS will now turn on the heat.  A statement from our authorities on this developing story would be useful. 
As I search around further within the ICIJ website, the Singapore Link is beginning to throw up many other individuals.  The common feature is the involvement of Portcullis Trustnet.  ICIJ has done a piece on Trustnet: