The Significant Investments Review Act – Balancing National Security and Investment Opportunities
The Significant Investments Review Act 2024 (“Act“), which came into force on 28 March 2024, sets out a new investment management regime that applies to both local and foreign investors for entities that are critical to Singapore’s national security interests. The Act reflects Singapore’s proactive and adaptive approach to economic and security challenges, positioning the nation as a global leader in responsible and secure investment practices. It also follows the growing trend worldwide for governments to carefully screen foreign investments in sensitive sectors.
Entities that are critical to the national security interests of Singapore, but are not caught by the existing sectoral legislation, may be designated under the Act (“Designated Entities“). The entities must either be incorporated, formed or established in Singapore; carry out activities in Singapore; or provide goods and services to persons in Singapore.
On 31 May 2024, the inaugural list of Designated Entities was published in the Government Gazette and on the Office of Significant Investments Review website. The nine entities are ST Logistics Pte. Ltd, Sembcorp Specialised Construction Pte. Ltd. ST Engineering Marine Ltd, ST Engineering Land Systems Ltd, ST Engineering Defence Aviation Services Pte. Ltd, ST Engineering Digital Systems Pte. Ltd., ExxonMobil Asia Pacific Pte. Ltd, Shell Singapore Pte, Ltd and Singapore Refining Company Private Limited.
While the list of Designated Entities currently stands at only nine, it must be remembered that the Minister can review ownership or control transactions involving an entity that has acted against Singapore’s national security interests, even if the entity has not been designated. The ownership or control transaction must have occurred within the two-year period prior to the act against national security.
For more information, click here to read our Legal Update.
On the Cutting Edge of AI Governance - Singapore Launches Model AI Governance Framework for Generative AI, Develops Digital Forum of Small States AI Governance Playbook
As a regional leader in the field of artificial intelligence (“AI“), Singapore has played an active role in setting the course for the development of AI while managing its associated risks. Singapore has demonstrated its position on the cutting edge of AI governance through its development of pioneering AI frameworks and its leadership in international cooperation efforts to develop harmonised standards.
In particular, generative AI has emerged as a tool of great transformative potential, but also a source of unique challenges, as it reinforces existing AI risks while introducing new risks. In line with this, Singapore has now launched the Model AI Governance Framework for Generative AI (“MGF-Gen AI“), which aims to establish a systematic and balanced approach to address generative AI risks while continuing to facilitate innovation. The MGF-Gen AI sets out nine dimensions which are to be looked at in totality in order to foster a trusted AI ecosystem.
The Infocomm Media Development Authority (“IMDA“) and the AI Verify Foundation had earlier published a draft MGF-Gen AI, seeking views from the international community. For more information, please see our earlier Legal Update on the draft MGF-Gen AI here. After considering and applying the feedback received, the finalised version of the MGF-Gen AI has now been issued.
Singapore will also be working with Rwanda to lead the development of a Digital Forum of Small States AI Governance Playbook, which is tailored for small states and will address the challenges associated with the secure design, development, evaluation, and implementation of AI systems in the context of the unique constraints faced by small states. The playbook is expected to be available at the end of 2024.
For more information, click here to read our Legal Update.
Singapore's Green Data Centre Roadmap – Carving a Route for a Sustainable Digital Future
On 30 May 2024, at the ATxSummit, Deputy Prime Minister Mr Heng Swee Keat launched the Green Data Centre (“DCs“) Roadmap (“Roadmap“) to guide digital sustainability and to chart green growth pathways for DCs. Under the Roadmap, at least 300 megawatts (“MW“) of additional DC capacity will be provided, with the possibility of achieving additional capacity through the use of green energy. The possible 300 or more MW is expected to significantly add to the existing 1.4 gigawatts of computing capacity in Singapore, with an added emphasis on energy efficiency, use of green (low-carbon) energy and water usage targets, and an emphasis on industry partnerships as catalysts.
The Roadmap advances the work of the Digital Connectivity Blueprint launched in June 2023 that sets out Singapore’s ambition for a future-ready and world class digital infrastructure. The Roadmap outlines Infocomm Media Development Authority’s (“IMDA“) plans to partner the industry to innovate and accelerate DCs’ sustainability, while recognising that the pathways to be taken would be exploratory and require shared commitment. The Roadmap is therefore a living document and pioneers an ecosystem approach to push the boundaries to meet a sustainable digital future.
For more information, click here to read our Legal Update which highlights (i) the Roadmap’s key recommendations; (ii) the steps that players in the DC ecosystem should start implementing to achieve the energy efficiency and water usage targets that will become applicable over the next 10 years; and (iii) the Government grants and other assistance available to support the move to a sustainable digital future.
New Tripartite Guidelines on Flexible Work Arrangement Requests: Implementation, Implications, and Practical Tips
Following the widespread adoption of telecommuting and staggered working hours amidst the COVID-19 pandemic, the job market in Singapore has seen an increasing demand for flexible work arrangements (“FWAs“). This demand is expected to grow not just in light of Singapore’s rapidly ageing population, as more employees will need to balance work with caregiving responsibilities in order to remain in the workforce — but also as employees and employers both re-examine the fundamental premise and very nature of work itself.
In a much-needed step to clarify the new normal, on 16 April 2024, the Ministry of Manpower (“MOM“) launched the Tripartite Guidelines on Flexible Work Arrangement (“FWA“) Requests (“FWA Guidelines“). The FWA Guidelines establish (i) how formal FWA requests should be made; (ii) how employers should consider such requests in a proper manner; and (iii) the requirement to communicate decisions on such requests in a transparent and timely manner.
Essentially, the FWA Guidelines aim to normalise FWAs in the workplace by putting in place formalised and clear processes for employees to request for them. Similar to legislation in countries such as Australia and New Zealand, they do not guide the outcome of FWA requests – employers retain the prerogative to decide on work arrangements, but are now obliged to properly consider the requests and base acceptances or rejections on reasonable business grounds. The FWA Guidelines will come into effect on 1 December 2024 and will apply to all employers.
For more information, click here to read our Legal Update.
MAS Launches COSMIC Platform for FIs to Share Information on Customers Exhibiting Red Flags to Combat Money Laundering/Terrorist Financing
On 1 April 2024, the Monetary Authority of Singapore (“MAS“) launched COSMIC (Collaborative Sharing of Money Laundering / Terrorism Financing (ML/TF) Information & Cases), the first centralised digital platform to facilitate the sharing of customer information among prescribed financial institutions (“Prescribed FIs“) to combat money laundering (“ML“), terrorism financing (“TF“), and proliferation financing (“PF“) globally.
On the same day, the Financial Services and Markets Act 2022 was amended to set out the legal basis and safeguards for such sharing. On 28 March 2024, the MAS Notice FSM-N02 Prevention of Money Laundering and Countering the Financing of Terrorism – Financial Institutions’ Information Sharing Platform (“COSMIC Notice“) was issued, providing MAS’ requirements for the Prescribed FIs to establish and implement robust controls to facilitate the sharing of risk information on COSMIC and protect the confidentiality of the information being shared and the interests of legitimate customers. The COSMIC Notice took effect on 1 April 2024, save for the provisions dealing with outsourcing arrangements which will take effect on or after 11 December 2024, together with the coming into effect of the MAS Notice 658 on Management of Outsourced Relevant Services for Banks.
With the launch of COSMIC, the Prescribed FIs in this initial phase (expected to last for approximately two years after its launch) currently comprise the six banks that co-developed COSMIC together with MAS (DBS, OCBC, UOB, Citibank, HSBC, and Standard Chartered Bank). As a start, COSMIC will focus on three key financial crime risks in commercial banking: (i) misuse of legal persons; (ii) misuse of trade finance for illicit purposes; and (iii) PF. Under COSMIC, FIs can securely share with one another information on a “relevant party” who exhibits multiple “red flags” that may indicate potential financial crime concerns along the lines of (i) to (iii), if stipulated conditions and thresholds are met. A “relevant party” is a person who is, or who seeks to be, or who has been, a customer of a Prescribed FI, and who has been prescribed as such under subsidiary legislation.
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
