Source : The Sunday Times, Oct 14, 2007
SINGAPORE has refuted a foreign media report last week that it was changing its banking secrecy laws to address concerns that it was a money laundering haven.
The Monetary Authority of Singapore (MAS) was commenting on a Dow Jones Newswire report on Thursday that said Singapore was looking into changing its laws in a bid to seal a trade agreement with the European Union (EU).
The report quoted Mr Glyn Ford, a member of the European Parliament, as saying that Singapore's Members of Parliament had told their counterparts from the EU during talks last week that the Republic was planning 'legislative changes'.
Dow Jones said Singapore was considering the changes to 'remove the tag' of it being a 'potential haven of suspicious money from launderers and terrorists'.
In a statement yesterday, an MAS spokesman said the allegation that Singapore was such a haven for suspicious money was baseless.
The spokesman said Singapore's laws on banking confidentiality provide bank customers the right to confidentiality of information, but do not shield criminal activity.
'We operate a rigorous regime against money laundering and financing of terrorism which is benchmarked against international standards. We have no plans to change these laws, contrary to the report,' said the spokesman.
Mr Zainudin Nordin, an MP and chairman of the Singapore-Europe regional parliamentary group, who headed the Singapore delegation, also refuted the Dow Jones report. He told The Sunday Times yesterday: 'At no time did we talk about the banking secrecy laws.'
He said the two parties discussed developments in Singapore's financial sector and the EU team did raise concerns that Singapore's banking policy did not meet some of their criteria for the trade pact.
'We said that we would highlight their concerns to the relevant authorities in Singapore,' said Mr Zainudin.
In the Dow Jones report, Mr Ford said that 'the one stumbling block' in reaching an agreement is 'over banking secrecy'. The European Commission has been negotiating a trade agreement with Singapore since 2005.
But the MAS said the 'so-called 'stumbling block'... relates to the question of withholding tax on customer savings'.
The spokesman said 'the Singapore Constitution does not allow us to collect taxes on behalf of a foreign country'.
'This is an altogether different issue from the fight against money laundering and the financing of terrorism.'
Sunday, October 14, 2007
MAS Refutes Dow Jones Report On Changing Banking Laws In S'pore
Source : Channel NewsAsia, 13 October 2007
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The Monetary Authority of Singapore (MAS) has refuted claims made in a Dow Jones news report on 11 October, which said Singapore is "a potential haven of suspicious money from launderers and terrorists".
MAS said the allegation is baseless, and contrary to what the report said, MAS has no plans to change Singapore's banking laws.
The authority said Singapore's banking laws provide customers the right to confidentiality of information, but do not shield criminal activity.
And Singapore operates a rigorous regime against money laundering and financing of terrorism, which is benchmarked against international standards.
MAS said the laws allow transparency in combating criminal activity while safeguarding investors' interest for safety and security.
In the Dow Jones report, a member of the European Parliament was quoted as saying Singapore and the European Commission were discussing a trade agreement, but a stumbling block was over banking secrecy.
The MAS said this so-called stumbling block refers to the issue of withholding tax on customer savings.
It said Singapore does not allow the collection of taxes on behalf of a foreign country.
MAS said this is a different issue from tackling money laundering and financing terrorism. - CNA/so
+1.jpg)
The Monetary Authority of Singapore (MAS) has refuted claims made in a Dow Jones news report on 11 October, which said Singapore is "a potential haven of suspicious money from launderers and terrorists".
MAS said the allegation is baseless, and contrary to what the report said, MAS has no plans to change Singapore's banking laws.
The authority said Singapore's banking laws provide customers the right to confidentiality of information, but do not shield criminal activity.
And Singapore operates a rigorous regime against money laundering and financing of terrorism, which is benchmarked against international standards.
MAS said the laws allow transparency in combating criminal activity while safeguarding investors' interest for safety and security.
In the Dow Jones report, a member of the European Parliament was quoted as saying Singapore and the European Commission were discussing a trade agreement, but a stumbling block was over banking secrecy.
The MAS said this so-called stumbling block refers to the issue of withholding tax on customer savings.
It said Singapore does not allow the collection of taxes on behalf of a foreign country.
MAS said this is a different issue from tackling money laundering and financing terrorism. - CNA/so
Banks To Set Up $117b Fund To Limit Credit Crunch
Source : The Sunday Times, Oct 14, 2007
NEW YORK/WASHINGTON - MAJOR banks including Citigroup are looking at setting up a roughly US$80 billion (S$117 billion) fund to buy ailing mortgage securities and other assets, in a bid to prevent the credit crunch from further hurting the global economy, sources familiar with the matter said.
Representatives from the United States Treasury have organised conversations among top global banks, sources said, as financial institutions grow increasingly concerned that a certain type of investment fund linked to banks may have to dump billions of dollars of repackaged loans onto financial markets.
A fire-sale of assets could lift borrowing costs globally, trigger big losses from investors and force banks to further write down some holdings on their balance sheets.
Such sales could trigger huge losses for banks, and in the worst-case scenario tip the US or Europe into recession.
The fund is the latest response to a global credit hangover after at least three years of easy credit that fuelled massive mortgage lending in the United States and spurred record levels of leveraged buyouts.
'Banks made unwise business decisions, and now they're scrambling to save themselves,' said Mr Steve Persky, chief executive at Dalton Investments in Los Angeles, which has US$1.2 billion under management.
Citigroup, JPMorgan Chase and Bank of America are involved in the discussions, according to people familiar with the situation. The three banks declined to comment.
The US Treasury is involved in the discussions, but taxpayer money is not expected to be used.
The Financial Services Authority, the UK market regulator, has suggested UK banks consider participating in the fund, the Wall Street Journal reported on Saturday, citing a person familiar with the situation.
Details concerning the fund the banks are setting up, including its size, are still being hammered out and may change as other banks and investors become involved, sources said.
The fund that is being contemplated would bail out funds known as 'structured investment vehicles', or SIVs.
SIVs bought assets like mortgage securities from banks, and financed their purchases using short-term debt known as commercial paper. They make money by earning more from their investments than they have to pay to fund them.
But if SIVs cannot sell commercial paper, they must sell their assets, and many of the assets do not trade often and would be hard to sell. -- REUTERS
NEW YORK/WASHINGTON - MAJOR banks including Citigroup are looking at setting up a roughly US$80 billion (S$117 billion) fund to buy ailing mortgage securities and other assets, in a bid to prevent the credit crunch from further hurting the global economy, sources familiar with the matter said.
Representatives from the United States Treasury have organised conversations among top global banks, sources said, as financial institutions grow increasingly concerned that a certain type of investment fund linked to banks may have to dump billions of dollars of repackaged loans onto financial markets.
A fire-sale of assets could lift borrowing costs globally, trigger big losses from investors and force banks to further write down some holdings on their balance sheets.
Such sales could trigger huge losses for banks, and in the worst-case scenario tip the US or Europe into recession.
The fund is the latest response to a global credit hangover after at least three years of easy credit that fuelled massive mortgage lending in the United States and spurred record levels of leveraged buyouts.
'Banks made unwise business decisions, and now they're scrambling to save themselves,' said Mr Steve Persky, chief executive at Dalton Investments in Los Angeles, which has US$1.2 billion under management.
Citigroup, JPMorgan Chase and Bank of America are involved in the discussions, according to people familiar with the situation. The three banks declined to comment.
The US Treasury is involved in the discussions, but taxpayer money is not expected to be used.
The Financial Services Authority, the UK market regulator, has suggested UK banks consider participating in the fund, the Wall Street Journal reported on Saturday, citing a person familiar with the situation.
Details concerning the fund the banks are setting up, including its size, are still being hammered out and may change as other banks and investors become involved, sources said.
The fund that is being contemplated would bail out funds known as 'structured investment vehicles', or SIVs.
SIVs bought assets like mortgage securities from banks, and financed their purchases using short-term debt known as commercial paper. They make money by earning more from their investments than they have to pay to fund them.
But if SIVs cannot sell commercial paper, they must sell their assets, and many of the assets do not trade often and would be hard to sell. -- REUTERS
I've Come Into A Fortune But Am Clueless About Estate Duty
Source : The Sunday Times, Oct 14, 2007
Q. I HAVE inherited $15 million, and the money is currently deposited in a British bank.
I am the beneficiary of funds from a deceased friend, who was from Mexico. If I transfer the money from Britain to Singapore, am I subject to an estate duty or a tax that is payable?
A. AS A rule, an inheritance is in the nature of a capital, so transferring it to Singapore should not attract an income tax.
A Singapore citizen will generally be domiciled in Singapore, and even more likely so if he was born here.
If Singapore is your domicile, your assets here and abroad - apart from immovable properties overseas, which are not subject to Singapore law - are liable to an estate duty here when you pass on.
The first $600,000 worth of movable properties and the first $9 million worth of residential properties are exempt from an estate duty.
Beyond these thresholds, however, the duty is 5 per cent on anything up to $12 million and then 10 per cent in excess of that amount.
Allowing for an exemption on the first $600,000, the duty on $15 million in cash - assets in movable form - will be $840,000.
It may be that $15 million is more than you can use in your lifetime, in which case you may wish to consider planning your estate.
Since the law exempts from duty up to $9 million worth of Singapore residential property, there will be less duty on your estate if you invest some of the funds in a residential property in Singapore.
As well, funds that you 'settle' in a trust, so that you personally no longer benefit from them, are not dutiable after five years.
A Singapore permanent resident or, more generally, a person with a right and an evident intention to return to a home country, may not be domiciled in Singapore.
If you happen not to have Singapore as your domicile, then there will be no duty on your estate - at least in this country - save for any immovable property in Singapore, which is subject to Singapore law regardless of your domicile.
In that case, there is no limit to the cash or other movables your beneficiaries can inherit from you free of Singapore estate duty.
Finally, it is worth noting that an estate duty has become a very minor part of revenue for many economies.
There is also no longer any estate duty in Hong Kong and Malaysia. It is possible that Singapore will follow.
Advice provided By
KhattarWong
Leon Kwong Wing Co-Head, Tax Department
Harleen Kaur Associate, Tax Department
Advice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to lorna@sph.com.sg
Q. I HAVE inherited $15 million, and the money is currently deposited in a British bank.
I am the beneficiary of funds from a deceased friend, who was from Mexico. If I transfer the money from Britain to Singapore, am I subject to an estate duty or a tax that is payable?
A. AS A rule, an inheritance is in the nature of a capital, so transferring it to Singapore should not attract an income tax.
A Singapore citizen will generally be domiciled in Singapore, and even more likely so if he was born here.
If Singapore is your domicile, your assets here and abroad - apart from immovable properties overseas, which are not subject to Singapore law - are liable to an estate duty here when you pass on.
The first $600,000 worth of movable properties and the first $9 million worth of residential properties are exempt from an estate duty.
Beyond these thresholds, however, the duty is 5 per cent on anything up to $12 million and then 10 per cent in excess of that amount.
Allowing for an exemption on the first $600,000, the duty on $15 million in cash - assets in movable form - will be $840,000.
It may be that $15 million is more than you can use in your lifetime, in which case you may wish to consider planning your estate.
Since the law exempts from duty up to $9 million worth of Singapore residential property, there will be less duty on your estate if you invest some of the funds in a residential property in Singapore.
As well, funds that you 'settle' in a trust, so that you personally no longer benefit from them, are not dutiable after five years.
A Singapore permanent resident or, more generally, a person with a right and an evident intention to return to a home country, may not be domiciled in Singapore.
If you happen not to have Singapore as your domicile, then there will be no duty on your estate - at least in this country - save for any immovable property in Singapore, which is subject to Singapore law regardless of your domicile.
In that case, there is no limit to the cash or other movables your beneficiaries can inherit from you free of Singapore estate duty.
Finally, it is worth noting that an estate duty has become a very minor part of revenue for many economies.
There is also no longer any estate duty in Hong Kong and Malaysia. It is possible that Singapore will follow.
Advice provided By
KhattarWong
Leon Kwong Wing Co-Head, Tax Department
Harleen Kaur Associate, Tax DepartmentAdvice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to lorna@sph.com.sg
Build Dream Homes On Small Govt Plots
Source : The Sunday Times, Oct 14, 2007
Infill sites to come back on market after over a decade - buyers likely to get cheap land in choice areas
THE idea of building a house on a former septic tank site might seem noxious to some.
10 Mt Sinai
BEFORE
This 4,855 sq ft parcel was a cul-de-sac on Mount Sinai Lane. The highest of 48 bids for the plots in 1993 came in at $880,000. It has since been developed into a two-storey bungalow. -- PHOTOS: SLA, JOYCE FANG
AFTER
But it could mean the chance to build your dream home on that rarest of commodities in Singapore - cheap land.
The Government will release smallish plots - likely to be big enough for just one home each - over the next few months, to meet the sizzling demand for land.
The fine print: The sites might previously have been used for public purposes, so they could have housed parks, gardens, sub-stations, or possibly even septic tanks.
Individual investors and small developers can build homes on these plots, known in the industry as 'infill sites'. The sites usually have adjacent buildings on either side.
Such plots have not been put on the market in more than a decade, but the booming economy and high demand for land have convinced the Singapore Land Authority (SLA) to resume sales, said its deputy director for land sales, Mr Teo Jing Kok.
Infill sites were introduced in 1990 to ease housing demand. By the time sales stopped in 1993, 20 plots had been snapped up at public tenders amid growing interest.
The lowest price paid for an infill site was $402,000, in 1991. The parcel of open space, near Braddell Road, was more than 9,000 sq ft, so the price worked out to less than $45 per sq ft (psf) of land area - relatively cheap even for those times.
408 Dunearn Road
BEFORE
This 15,080 ft plot of open pace drew 28 offers in 1993 and was sold for 3.6 million. Dunearn Lodge, a 14-unit apartment block, now stands on it
AFTER
Over the following two years, the popularity of these sites increased sharply. A 5,581 sq ft plot on Ceylon Road, off East Coast Road, drew a whopping 62 bids when it went on sale in 1993. The highest bid was $1.3 million, or just over $230 psf.
All the plots offered in the early 1990s were zoned for building homes, and most now host bungalows or other landed homes.
Several of the plots once housed septic tanks, some were empty spaces, while a site at Mount Sinai was a cul-de-sac.
Buyers in the past were mainly boutique property development firms or individuals who wanted to build their own homes, said the SLA.
The previous sales 'showed that owners are free to create their own types of houses and are generally more satisfied with the outcome', the agency told The Sunday Times.
'They are able to exercise control in the interior and exterior designs, as well as the colours, resulting in their 'dream home'.'
The first sites, sold in 1991, came with 999-year leases. The remaining sites in following years were 99-year leasehold. The upcoming plots are believed to be mainly leasehold as well.
The SLA said it has not finalised the sites to go on sale, but based on the plots offered in the past, they are likely to be in popular residential locations.
The parcels sold in 1991 were mostly in Upper Bukit Timah and Yio Chu Kang.
110-112 Tamarind Road
BEFORE
This former septic tank site with 11,236 sq ft. of land area sold for $1.45 million in 1993, after receiving 29 bids. Now, it houses twp-storey landed homes. -- PHOTOS: SLA, LAU FOOK KONG, DOMINIC WONG
AFTER
The year after, the Government released sites in Sixth Avenue and Namly Drive in Bukit Timah. In 1993, plots along Dunearn Road, the East Coast and Mount Sinai went on the market.
Consultants expect a good response for the upcoming sales, as long as the locations are desirable.
'There is likely to be demand as many homebuyers are now seeking good landed homes and are willing to pay higher prices,' said Mr Nicholas Mak, the director of research and consultancy at Knight Frank.
Recent launches of 99-year leasehold cluster housing, such as MCL Land's Hillcrest Villas and the latest phase of Far East Organization's Greenwood project, have been well-received.
However, Mr Mak added that the Government might have to allay concerns from potential buyers about possible 'leaks from a previous septic tank or remaining electromagnetic waves from a former substation'.
In response, the SLA gave reassurances that the sites it puts up for sale will be safe to build homes on. It said it will obtain the necessary clearances and conduct certified tests of the soil conditions for each site before allowing the site to be offered.
It will also outline the locations of any waterpipes or sewers within a sale site for the benefit of all bidders, the agency said.
As for likely pricing, Mr Mak said landed homes have risen roughly 2.5 times in price since 1990. If the prices of infill sites match this pace, a 10,000 sq ft plot could go for less than $1.5 million - a fairly good deal.
By comparison, each unit at Hillcrest Villas sold for $2.5 million to $3 million. Nearby, the strata bungalows at 8 @ Kings Road are going for about $5.5 million each for 2,000 sq ft of land area.
Infill sites to come back on market after over a decade - buyers likely to get cheap land in choice areas
THE idea of building a house on a former septic tank site might seem noxious to some.
10 Mt SinaiBEFORE
This 4,855 sq ft parcel was a cul-de-sac on Mount Sinai Lane. The highest of 48 bids for the plots in 1993 came in at $880,000. It has since been developed into a two-storey bungalow. -- PHOTOS: SLA, JOYCE FANG
AFTERBut it could mean the chance to build your dream home on that rarest of commodities in Singapore - cheap land.
The Government will release smallish plots - likely to be big enough for just one home each - over the next few months, to meet the sizzling demand for land.
The fine print: The sites might previously have been used for public purposes, so they could have housed parks, gardens, sub-stations, or possibly even septic tanks.
Individual investors and small developers can build homes on these plots, known in the industry as 'infill sites'. The sites usually have adjacent buildings on either side.
Such plots have not been put on the market in more than a decade, but the booming economy and high demand for land have convinced the Singapore Land Authority (SLA) to resume sales, said its deputy director for land sales, Mr Teo Jing Kok.
Infill sites were introduced in 1990 to ease housing demand. By the time sales stopped in 1993, 20 plots had been snapped up at public tenders amid growing interest.
The lowest price paid for an infill site was $402,000, in 1991. The parcel of open space, near Braddell Road, was more than 9,000 sq ft, so the price worked out to less than $45 per sq ft (psf) of land area - relatively cheap even for those times.
408 Dunearn RoadBEFORE
This 15,080 ft plot of open pace drew 28 offers in 1993 and was sold for 3.6 million. Dunearn Lodge, a 14-unit apartment block, now stands on it
AFTER
Over the following two years, the popularity of these sites increased sharply. A 5,581 sq ft plot on Ceylon Road, off East Coast Road, drew a whopping 62 bids when it went on sale in 1993. The highest bid was $1.3 million, or just over $230 psf.
All the plots offered in the early 1990s were zoned for building homes, and most now host bungalows or other landed homes.
Several of the plots once housed septic tanks, some were empty spaces, while a site at Mount Sinai was a cul-de-sac.
Buyers in the past were mainly boutique property development firms or individuals who wanted to build their own homes, said the SLA.
The previous sales 'showed that owners are free to create their own types of houses and are generally more satisfied with the outcome', the agency told The Sunday Times.
'They are able to exercise control in the interior and exterior designs, as well as the colours, resulting in their 'dream home'.'
The first sites, sold in 1991, came with 999-year leases. The remaining sites in following years were 99-year leasehold. The upcoming plots are believed to be mainly leasehold as well.
The SLA said it has not finalised the sites to go on sale, but based on the plots offered in the past, they are likely to be in popular residential locations.
The parcels sold in 1991 were mostly in Upper Bukit Timah and Yio Chu Kang.
110-112 Tamarind RoadBEFORE
This former septic tank site with 11,236 sq ft. of land area sold for $1.45 million in 1993, after receiving 29 bids. Now, it houses twp-storey landed homes. -- PHOTOS: SLA, LAU FOOK KONG, DOMINIC WONG
AFTERThe year after, the Government released sites in Sixth Avenue and Namly Drive in Bukit Timah. In 1993, plots along Dunearn Road, the East Coast and Mount Sinai went on the market.
Consultants expect a good response for the upcoming sales, as long as the locations are desirable.
'There is likely to be demand as many homebuyers are now seeking good landed homes and are willing to pay higher prices,' said Mr Nicholas Mak, the director of research and consultancy at Knight Frank.
Recent launches of 99-year leasehold cluster housing, such as MCL Land's Hillcrest Villas and the latest phase of Far East Organization's Greenwood project, have been well-received.
However, Mr Mak added that the Government might have to allay concerns from potential buyers about possible 'leaks from a previous septic tank or remaining electromagnetic waves from a former substation'.
In response, the SLA gave reassurances that the sites it puts up for sale will be safe to build homes on. It said it will obtain the necessary clearances and conduct certified tests of the soil conditions for each site before allowing the site to be offered.
It will also outline the locations of any waterpipes or sewers within a sale site for the benefit of all bidders, the agency said.
As for likely pricing, Mr Mak said landed homes have risen roughly 2.5 times in price since 1990. If the prices of infill sites match this pace, a 10,000 sq ft plot could go for less than $1.5 million - a fairly good deal.
By comparison, each unit at Hillcrest Villas sold for $2.5 million to $3 million. Nearby, the strata bungalows at 8 @ Kings Road are going for about $5.5 million each for 2,000 sq ft of land area.
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