Following last month’s anti-money-laundering raids and subsequent arrest of 10 Chinese nationals – many of whom held passports from citizenship by investment jurisdictions like Vanuatu, Turkey, Cambodia, Cyprus, and Dominica – skittish local banks indicate they will keep a closer eye on clients holding second passports from CBI jurisdictions.
The raids resulted in seized assets – including cash, cryptocurrencies, and real estate – worth an estimated US$1.8 billion. Singaporean courts have denied bail to the defendants, who prosecutors claim had operated illegal gambling rings abroad, citing flight risks because of their multiple passports.
The SCMP reports that banks with which it has been in touch – who nonetheless declined to go on record – have been reviewing the onboarding and account activity of clients of Chinese origin holding citizenship from countries that offer the same in exchange for donations and investments. The newspaper said at least one international bank was closing “some” accounts owned by individuals with passports from Turkey, Cambodia, Cyprus, and Vanuatu.
The same sources told SCMP that other banks would evaluate “on a case-by-case basis” whether to accept funds from individuals with such profiles.
Singaporean banking giant DBS said in a statement that while the country’s regulatory regime held all domestic banks to high AML standards, it did not oblige them to discriminate against clients based on nationality alone but that the triggering of potential service denial would require that other red flags be raised as well.
During a round of parliamentary questions following of last month’s raids, MPs asked what the government would do to enhance scrutiny of those holding “golden passports”. Sun Xueling, Minister of State for Home Affairs, said a ministerial statement would provide answers next month.
Commenting on the news, international tax and immigration lawyer David Lesperance of Lesperance & Associates said the matter demonstrated how “the problems for Chinese nationals with second citizenships is not just in China or with the Chinese government. This latest trend by non-Chinese banks to do more thorough AML checks on Chinese nationals with CBI passports is yet another practical illustration of the importance of having an advisor who will go beyond selling a product and then disappearing.”
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