MAS Notices on Financial Measures Relating to Russia Sanctions: Impact on Financial Institutions in Singapore
On 14 March 2022, the Monetary Authority of Singapore (“MAS“) issued two Notices to all financial institutions (“FIs“) in Singapore detailing the financial measures imposed by the Singapore Government against designated Russian banks, entities and activities in Russia and fund-raising activities benefiting the Russian government and related parties.
These Notices took effect on 14 March 2022 and apply to all FIs, including all banks, finance companies, insurers, capital markets intermediaries, securities exchanges and payment service providers (including digital payment token (“DPT“) service providers). Failure to comply with the requirements in the MAS Notices is an offence.
MAS Notice SNR-N01 Financial Measures in Relation to Russia (“MAS Notice SNR-N01“) sets out the activities and transactions that FIs are prohibited from engaging in (unless relevant exemption(s) apply). Such prohibited activities and transactions include, among other things:
- Dealing with designated Russian Banks and Designated Entities in the manners set out in Paragraph 3 of MAS Notice SNR-N01 (including establishing business relations with or undertaking any financial transaction for, or providing any financial assistance or service to, or transfering any financial assets or resources to, the designated Russian Banks and Designated Entities).
The designated Russian Banks are:
- VTB Bank Public Joint Stock Company;
- The Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank;
- Promsvyazbank Public Joint Stock Company;
- Bank Rossiya; and
all entities owned or controlled by, directly or indirectly, or acting on behalf of or under the direction of, these Russian banks.
A “Designated Entity” refers to an entity involved in activities relating to the export from, transhipment in or transit through, Singapore or any other jurisdiction to Russia of strategic military and high technology goods that are prescribed in the Strategic Goods (Control) Order 2021, and all entities owned or controlled, directly or indirectly, or acting on behalf of or under the direction of the Designated Entity.
- Entering into financial transactions or arrangements, or providing financial services, that facilitate fund raising by the Russian government and the Central Bank of the Russian Federation, as well as any entity owned or controlled by them or acting on their direction or behalf.
- Entering into or facilitating any DPT transaction where the proceeds or benefits from such transaction may be used to facilitate any of the transactions or activities that is stated to be prohibited in Paragraphs 3 to 6 of MAS Notice SNR-N01.
For the full list and details of the activities and transactions that FIs are prohibited from engaging in, please refer to MAS Notice SNR-N01.
MAS Notice SNR-N02 Financial Measures in Relation to Russia – Non-prohibited Payments and Transactions (“MAS Notice SNR-N02“) sets out payments and transactions that are excluded from the scope of the financial measures in MAS Notice SNR-N01. For instance, among other things, in respect of Paragraph 3 of MAS Notice SNR-N01, an FI may process or facilitate payments for basic expenses and reasonable fees for the designated Russian Banks and Designated Entities in respect of certain services specified in Paragraph 3 of MAS Notice SNR-N02. The FI must keep accurate, complete and readable records of these permitted transactions.
For more information, click here to read our Legal Update.
Singapore Court Issues First "Persons Unknown" Order in Decision Involving Cryptocurrency
The cryptocurrency market has grown exponentially, with a global market value of about $2 trillion, and yet its regulation and legal status continue to be subject to much debate and uncertainty. Are cryptocurrency assets considered to be property in the eyes of the law? Where does one even begin to seek legal remedy for stolen cryptocurrency in the borderless nature and anonymity of the internet? Whilst all cryptocurrency transactions are public and transparent, it is extremely difficult to identify the user of a particular wallet. There are often also difficulties ascertaining the exact entity operating a cryptocurrency exchange, and which countries have jurisdiction over them.
These were some of the novel issues before the Singapore High Court in CLM v CLN and ors [2022] SGHC 46. In this exceptional case, the Singapore Court granted the first reported freezing injunction against “persons unknown” in Singapore for S$9.6 million worth of cryptocurrency assets stolen from the Plaintiff.
In reaching its decision, the Singapore High Court analysed jurisprudence across multiple jurisdictions and held that cryptocurrency could be classified as property that could be protected using proprietary injunctions. The Singapore High Court also considered that it had sufficient jurisdiction to grant ancillary disclosure orders against certain cryptocurrency exchanges in aid of the Plaintiff’s efforts to trace and recover the stolen cryptocurrency.
The Plaintiff was successfully represented by Danny Ong and Jansen Chow from the Fraud, Asset Recovery and Investigations team.
For more information, click here to read our Legal Update.
Forward, Together: Singapore Budget 2022
In light of Singapore’s economy rebounding from the reverberations from the COVID-19 pandemic, Budget 2022 was unveiled by Singapore’s Minister for Finance Mr Lawrence Wong on 18 February 2022. With the theme “Charting Our New Way Forward Together”, Mr Wong laid out a wide range of measures to tackle Singapore’s immediate challenges, including:
- S$500 million Jobs and Business Support Package to provide targeted help for workers and businesses in segments of the economy that are facing slower recovery;
- S$560 million Household Support Package that helps Singaporean families to manage cost of living pressures by providing support for daily essentials;
- S$600 million set aside to strengthen local enterprises under the Productivity Solutions Grant; and
- S$200 million to improve digital capabilities in businesses and workforces, such as investing in future technologies like 6G.
There were also tax measures and changes announced which were categorised as follows:
- Maintaining the competitiveness and resilience of the tax system;
- Building a fairer and more resilient tax system;
- Enhancing service delivery; and
- Increasing the carbon tax.
With regard to the carbon tax increase, Singapore has set the goal of achieving net zero carbon emissions by or around 2050. Accordingly, the carbon tax that was introduced in 2019 will be increased from S$5 per tonne of emissions to:
- S$25 per tonne in 2024 and 2025;
- S$45 per tonne in 2026 and 2027; with a view to reaching
- S$50 to S$80 per tonne by 2030.
Any subsequent increases will be announced ahead of time to provide certainty for businesses.
To support businesses as they adjust to carbon tax increases and to manage the near-term impact on their competitiveness, the Singapore Government will put in place a transition framework in 2024. Under this framework, firms will be provided with allowances for a share of their emissions. The allowances will be determined based on efficiency standards and decarbonisation targets. This will help to mitigate the impact on business costs while still encouraging decarbonisation.
From 2024, businesses will be allowed to use high-quality, international carbon credits to offset up to 5% of their taxable emissions in lieu of paying carbon tax.
For more information on the carbon tax increase and other tax measures, changes, enhancements, extensions, and refinements announced in Budget 2022, click here to read our Legal Update.
Towards an Efficient and Business-Friendly IP System – Intellectual Property (Amendment) Act 2021 Passed in Parliament
The Intellectual Property (Amendment) Bill 2021 (“Bill“) was passed in Parliament on 12 January 2022. The Bill makes changes to a number of Intellectual Property (“IP“) statutes, seeking to create a more efficient and business-friendly IP registration system in Singapore. The Bill makes changes to the Patents Act, the Trade Marks Act, the Registered Designs Act, the Plant Varieties Protection Act and the Geographical Indications Act 2014.
The Bill follows an earlier public consultation by the Intellectual Property Office of Singapore (“IPOS“) held from July to August 2021. The changes in the Bill are in line with the Singapore IP Strategy 2030, which seeks to strengthen Singapore’s position as a global hub for intangible assets (“IA“) and IP, and to attract and grow innovative enterprises using IA and IP.
The changes are directed at effecting improvements across three broad categories:
- Enhanced business-friendliness. To improve business-friendliness of the IPOS system, the Bill introduces changes which seek to improve the experience of applicants seeking to register their IP.
- Operational efficiency. The Bill seeks to improve operational efficiency and includes key amendments to IPOS’ internal processes.
- Enhanced legislative and procedural clarity. The Bill introduces certain changes that seek to clarify the law and smoothen IPOS’ administration of the IP prosecution process.
For more information, click here to read our Legal Update.
Regional Comprehensive Economic Partnership Agreement Enters into Force
The Regional Comprehensive Economic Partnership (“RCEP“) Agreement has entered into force on 1 January 2022, following the ratification of the Agreement by 10 Parties – Australia, Brunei, Cambodia, China, Japan, Laos, New Zealand, Singapore, Thailand, and Vietnam.
The RCEP Agreement is a comprehensive and mutually beneficial economic partnership that builds on existing bilateral agreements between the Association of Southeast Asian Nations (ASEAN) and its Free Trade Agreement (“FTA“) partners. The RCEP Agreement is the largest FTA to date, covering about 30% of global Gross Domestic Product (US$26 trillion) and 30% of the world’s population.
The key benefits under the RCEP Agreement span the following areas:
- Trade in goods;
- Non-tariff measures provisions;
- Rules of origin;
- Customs procedures and trade facilitation;
- Trade in services;
- Investment;
- Electronic commerce;
- Intellectual property;
- Competition; and
- Government procurement.
For more information, click here to read our Legal Update.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice
