Tuesday, April 17, 2012


As a compliance officer at an international bank, you know that you must, in your due diligence investigations, rely upon the objective truth about the countries where prospective bank clients reside. Recent governmental actions taken in the Republic of Singapore against Internet postings, which include legal warnings by the Prime Minister himself, and threats of legal proceedings, appear to have increased existing restrictions on free speech. You need the unvarnished truth about corruption, whether governmental, judicial or otherwise, to discharge your compliance obligations properly.

You need to learn all you can about individuals seeking to become bank clients who are Politically Exposed Persons (PEPs), senior government officials or their families, members of the judiciary, and other government functionaries. Governmental interpretation of existing Singaporean Law restricting freedom of expression has deemed these topics forbidden in any form of media:

(1) Questioning the character or integrity of public officials.
(2)  Nepotism, commentary about the placement of relatives in powerful governmental positions that they may not be duly qualified for, in education, training and experience.
(3) Questioning the internal affairs and conduct of government.
(4) The expression of politically sensitive material.
(5)  Comments critical of the judiciary and its rulings, particularly questioning its independence.

Bloggers, or any media for that matter, appear to have been targeted since February; they represent one of your best alternative sources of information that will not be appearing in the local, self-censored media. The possible governmental action contemplated or threatened against them include:

(1) Contempt of Court.
(2) Civil Defamation suits for money damages.
(3) Sedition charges.
(4) Other criminal charges.

Since the minimal unrestricted flow of information on government and PEPs that was available before is now being targeted, and attacked, by government, leaving only the official side, you are at a distinct disadvantage when assessing country risk. This means that you need to take a hard look at any potential exposure you may incur, by on-boarding high net worth clients from this jurisdiction, or by committing financial resources.

Country risk is all about ascertaining objective facts; since the government of the Republic of Singapore has chosen to limit your access to potentially important intelligence, you may now choose to increase country risk for Singapore. Consider all the facts, make your own investigation, and act accordingly.

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