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Singapore companies scramble to file beneficial ownership data as deadline looms
11 June 2021 07:37
Companies in Singapore are scrambling to gather and report data on who ultimately owns and controls their companies, lawyers say, as the deadline for filing this information to the country’s central beneficial ownership register draws near.
Companies have been required to record and maintain this information themselves since March 2017 and make it available to the authorities on request.
But in July last year, changes were introduced which meant companies will have to file this data to a central register maintained by the Accounting and Corporate Regulatory Authority, or ACRA.
Information on the register will only be made available to law enforcement agencies and can’t be accessed by members of the public.
Unless a company is exempted, all companies, including foreign companies, and Limited Liability Partnerships, or LLPs, must file this information with ACRA.
The filing deadline was initially delayed, but in February ACRA set a new deadline of June 30.
Lawyers in Singapore have said, however, that some companies are cutting it fine.
“We have been getting a lot of recent enquiries from clients on identifying their registrable controllers and our sense is that a lot of corporate entities are still working towards meeting the extended deadline for lodgment with ACRA,” Celeste Lee, a partner at Rajah & Tann, told MLex.
“The challenge with compliance is that the process of tracing upwards through a chain of entities to identify all the controllers is often a complex exercise,” Lee said.
Mark Tan, a partner at Pinsent Masons, said that the duty to privately maintain data on a company’s beneficial owner, known locally as Register of Registrable Controllers or RORC, information, was easy to overlook. But the new requirement to now file this information with ACRA makes it hard to ignore this task.
“Due to this, we do see some entities now scrambling to identify their registrable controllers, particularly as the 30 June 2021 deadline draws near,” said Tan.
Tan said the process of identifying ultimate beneficial owners can be difficult if they aren’t forthcoming and their shareholdings are owned through corporate entities in jurisdictions where they don’t need to disclose their beneficial owners.
ACRA has warned that if companies fail to file by the deadline, they face the risk of being fined up to S$5,000 ($3,800).
But Tan said that it is unlikely that ACRA will immediately penalize companies that fail to meet the deadline.
“ACRA is more likely to follow up with the non-compliant entities in the first instance to try and get them to comply with the RORC requirement within a certain time frame,” Tan said. “Thereafter, if some entities continue to remain recalcitrant without valid reasons, it is likely that ACRA will then commence enforcement action against such entities.”
While this deadline looms in Singapore, the world’s anti-money laundering standards-setter, the Financial Action Task Force, or FATF, is reviewing the global standards it sets in this area.
The current global standard dictates that countries only need to ensure that national authorities have timely access to adequate, accurate information on a company's beneficial ownership.
But a debate is now taking place globally about whether central beneficial ownership registers should be made compulsory as part of the international standards FATF sets, and whether those registers should be open to public scrutiny or sealed off for national law enforcement agencies only.
When asked if ACRA plans to make its register publicly accessible in the future, the regulator said in a statement that Singapore will “continue to work with the international community on the needed international standards to promote transparency and combat money laundering and other financial crimes.”
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