Terrorism (Suppression of Financing) (Amendment) Bill

Mdm Speaker, this Bill represents Singapore's continuing resolve towards combatting terrorism and to join hands with the rest of the international community to battle this scourge. I, therefore, welcome this Bill. There are, however, a few points that I would like to raise.

First, a point for clarification. Sections 8 and 10 of the Bill make it mandatory for persons with information about transactions relating to terrorist property or acts of terrorism financing to disclose it to the Police. However, the Bill does not protect the identity of informers. As a result, those who may otherwise aid the authorities may be deterred, for fear of reprisal. The Bill addresses this gap by introducing a new section 10A to protect the identity of informers during legal proceedings. However, the protection given to informers is not absolute. Under the proposed section 10A(3)(b), if the Court is satisfied that justice cannot be fully done between the parties without the disclosure of the name of an informer, the court may permit inquiry and require full disclosure concerning

Page: 45

the informer. This provision, as broadly phrased as it is, creates some uncertainty. Could the Minister clarify what sort of circumstances would justify the disclosure under section 10A(3)(b)? Furthermore, should further safeguards be implemented to ensure that informers are adequately protected? One way this can be done is to require the Minister's approval before disclosure of the informer's identity is allowed.

My second point concerns clause 4, which refines the scope of exemptions the Minister may make in respect of terrorism financing prohibitions under the Act. It is paramount that the exemption provision is drafted as narrowly as possible, so that there is no possibility of funds being channelled towards terrorist activities. In this regard, section 7(1) may be too broadly drafted. It confers upon the Minister the discretion to exempt any person from section 4(b) and section 6, which prohibit the provision of property and services for terrorist purposes and dealing with property of terrorists respectively, so long as the property or services will not be used by or benefit a terrorist entity.

I urge the Minister to consider drafting the provision more narrowly, perhaps by articulating the precise circumstances in which an exception may be granted. On the same note, I would like to clarify how section 7(1) is intended to operate. At the point when the exemption is granted, how will the Minister be able to determine whether or not the property or services will be used by or will benefit a terrorist entity? Can the Minister revoke the exemption, and, if he does, what is the status of acts already carried out when the exemption was in force?

My third point concerns the scope of the exceptions to the new section 10B, which makes tipping-off an offence. Sub-sections 3 to 6 set out a series of exceptions for advocates, solicitors and legal counsel to ensure that advice rendered, or information disclosed for professional purposes and for the purpose of legal proceedings will not constitute tipping-off.

In particular, my concern is that section 10B(5) is too narrowly drafted. This subsection extends the protection granted under sub-section 4 to legal counsel employed by one of a number of corporations related to each other under section 6 of the Companies Act (CA). This mirrors the language in section128A of the Evidence Act in relation to the scope of legal privilege. But that serves a fundamentally different purpose. The fact of the matter is that there are corporate counsel who advise companies or entities within a group of entities which do not fall within this scope. This would also include Limited Liability Partnerships (LLPs) and their related entities which are not granted any

Page: 46

protection.

In the 2012 parliamentary debate on the amendments to the Evidence Act, I queried why legal privilege was extended to companies and their related corporations, but not to LLPs and their related entities. The Minister for Law's response was that this was a concession to corporate reality; many MNCs operate under a group of related companies, and the CA has a definition of "related corporation", but no similar definition exists in the Limited Liability Partnership Act. The concern was that the extension of legal professional privilege to related legal entities of a limited liability partnership may run the risk of the privilege being abused to hide communications or material that ought to be disclosed. While this is a legitimate concern, the same rationale does not apply in the present context. Sub-section 5 is an exception to the offence and should be drafted in a wider manner.

In fact, sub-section 5 stands in sharp contrast to the wider exception under sub-section 6. Under sub-section 6, an exception is granted for legal counsel employed by a public agency who renders legal advice to other public agencies as part of his duties of employment, provided that the conditions in sub-section 4 are fulfilled.

The exception under section 10B(5) should, therefore, apply to any legal counsel who provides advice to any entity in the group of companies, provided it is within his job scope to do so. As the legal counsel would still have to fulfill the conditions of sub-section 4, there are adequate safeguards in place to ensure that the provision is not abused. With that, Madam, I support the Bill.

Mdm Speaker, I rise and support the Bill which will update and better coordinate our efforts to tackle terrorist financing. However, I have some queries on the comprehensiveness and effectiveness of the framework which I shall elaborate on later in my speech.

The 9/11 attacks by Al Qaeda in the United States in 2001 and the Bali bombings by the Jemaah Islamiyah (JI) in 2002 awakened the world to the ascendency of terrorists around the globe. Governments worldwide mounted massive and coordinated crackdowns. In Singapore and Malaysia, arrests were made of suspected terrorists in 2001 and 2002 which had been a success to the crushing of JI division in Singapore and Malaysia at that time. Al Qaeda has also been abated by counter-terrorism operations by the US and other governments in Pakistan and Afghanistan. In 2002, this House also passed a parent Bill – the Terrorism (Suppression of Financing) Act – as part of a global effort to tackle terrorist financing.

Just as the situation appeared to be somewhat under control, more recent events showed that terrorist groups may go through periods of melee but are capable of regeneration and resurgence which should not be written off. Within the last two weeks, the US government detected chatter among high-level persons from Al Qaeda in the Arabian peninsula talking about a major attack and leading to the closure of several US embassies and consulates in the Middle East. Close to home, sporadic terror attacks in June and July this year had occurred in Sulawesi and Java by persons who are linked to the JI and Al Qaeda.

It is clear that our counter-terrorism efforts must continue and a key component to tackle is financing. Financing enables terrorist groups to survive and thrive and to fund their recruitment, training, operations and even public outreach. The task of suppressing terrorist financing is a challenging one as such individuals or groups solicit and transfer funds from various channels which are difficult to track. Often, groups get financing through fund companies or legitimate welfare or humanitarian organisations. For instance, JI reportedly received funds from abroad via cash couriers, remittance and gold shops, donations, funds companies making purchases for JI's use and collections from Muslims and Muslim charities.

Given that terrorism financing involves multiple, informal and even the fairest channels, are we able to gauge whether the Act has any tangible effect in suppressing terrorist financing in Singapore since it was enacted more than 10 years ago? For instance, how many prosecutions have been carried out since the Act came into force in 2003? Are there other indicators the Government is

Page: 50

tracking?

The United Nations Security Council has also acknowledged that the existing sanctions on terrorist financing could be strengthened and has indicated that they will try to do so by June 2014. Is Singapore engaged in this review process? Will the Minister be able to tell us what general directions are being studied by the UN?

I now turn to queries on two clauses in the Bill. Clause 2 of the Bill amends the definition of "terrorist" and "terrorist entities". These will now cover all individuals and groups listed by the UN Security Council in the Al Qaeda Taliban sanctions lists as updated from time to time at the UN's official website. The individuals or groups listed are recommended by the UN to be subject to exit visas, travel bans and arms embargoes as set out in the Security Council Resolution 2083 of 2012. The UN framework also builds in a check-and-balance in the office of ombudsmen who will assess requests for individuals or entities on the list to be de-listed.

Given Singapore's past experience of being a target of JI, it is good to note that the JI is on the UN's Al Qaeda list. The links between Al Qaeda and JI are clear and had been cemented by Hambali, a JI elite who is a member of Al Qaeda. Hambali had arranged for Al Qaeda to fund JI and train them in Pakistan and Afghanistan and to school young members of JI families in radicalised madrasahs in Pakistan. Also on the UN list is the JI's younger cousin, Jemaah Ansharut Tauhid (JAT) which was founded in 2008 by one of the core founders of JI, Abu Bakar Bashir. The JAT has been linked to several terrorist attacks in the past two years in Indonesia.

Madam, I have a concern regarding the comprehensiveness of the UN list. In the wake of the JI arrest in 2001 and 2002, MHA put up a White Paper on the JI in 2003. The White Paper carried a chart showing the links between the Al Qaeda and the JI which also implicated two other groups – the Kumpulan Militan Malaysia (KMM) and the Moro Islamic Liberation Front (MILF).

MHA stated then that KMM had hosted 911 Al Qaeda suicide bombers and helped JI procure ammonia nitrate for making explosives. As for the MILF, MHA stated that they had received funding from Al Qaeda, conducted training of Singapore JI detainees in Mindanao and even directed the Singapore detainees to private US establishments for attack. Given the active and significant role of both KMM and MILF at that time, I was surprised that these groups were not specifically listed in the UN Al Qaeda list. Is there a reason for the exclusion?

Page: 51

Has the risk threat assessment changed or is evidence to prove the linkage with Al Qaeda insufficient? Would the exclusion make the UN list less effective?

Madam, my last query relates to exemptions given by the Minister under section 7 of the Bill. Clause 4 amends section 7 regarding when the Minister can exempt the person in Singapore or any Singapore Citizen outside Singapore from certain prohibitions against transacting in properties and services involving terrorist individuals or entities. The new section 7 will allow the Minister to also exempt the person from section 4(b), that is, the person may be permitted to provide properties and services to an individual terrorist but not for a terrorist entity.

The explanatory note for the Bill states that the supply to an individual terrorist may be allowed if it is not for a terrorist purpose. The rationale for the change was explained as to allow a terrorist and his family funds for basic necessities as required by the humanitarian exception under the UN Security Council Resolution. Earlier, the Minister also mentioned that part of the rationale was rehabilitation. While the rationale is justified, I would like to ask if there are any safeguards to ensure that the funds of other assets are not channelled to terrorist purposes, especially now that there is an auto-exemption regime. For instance, will there be follow-ups to account for how the money is utilised? Despite the queries I have raised, Madam, I support the Bill.

Mdm Speaker, this Bill seeks to ensure that Singapore strengthens its counter-terrorism measures and continues to give effect to the International Convention for the Suppression of the Financing of Terrorism and the United Nations Security Council resolutions, especially Resolution 1373 (2011).

The main focus of the parent Act and the amendment Bill before us is not about outlawing terrorist acts but it is about criminalising financing of terrorist acts, such as the provision of financing and other resources and support to alleged terrorists. Such precursor acts are essential to the terrorism supply chain by which terrorists commit terrorist acts.

Significantly, the principal Act extends the reach of criminal law to precursor acts or acts preparatory to a terrorist attack. It does not target terrorists per se; instead, it is targeted principally at non-perpetrators of terrorist

Page: 52

acts.

Although this Bill does not substantively change the law, it is worth bearing in mind that the principal Act has a significant reach. It potentially captures actions that do not constitute attempt, conspiracy, or incitement of a terrorist attack. By moving to the margins of this supply chain and to activities that occur before an act of terrorism, the danger that innocent interactions and everyday transactions could fall within the penumbra of this anti-terrorism legislation is not to be simply brushed away. In short, the impact of such precursor offences on individuals and communities can be significant, given that ethnic communities do transfer funds, not through the usual banking channels.

The threat of terrorism remains real. The fact that there has been no successful terrorist attack in Singapore may give rise to a false sense of security. At the same time, there is an almost irresistible, evocative appeal in the label of "terror", "terrorism", and "terrorist". The mere use of any one or all of these T-words brings us into the realm of the extra-criminal world with all the attendant fears, dangers, moral panic and even a crisis.

Nevertheless, as a society, we cannot allow ourselves to be paralysed by the terrorist threat. This is so even as we treat terrorism as an existential threat. The Government has described Singapore as an "iconic target" for terrorists.

The statutes, including this Bill before this House, that provide special powers to the authorities to deal with the scourge of terrorism, must be properly justified. The use of special powers must be strictly constrained by reference to the needs of policing to prevent terrorist activities and for prosecuting terrorism.

However, in fighting terrorism, it is absolutely essential that this operational imperative must be balanced by the critical need to ensure that the values we hold dear are not compromised or undermined by the operational imperative – values, such as rule of law, due process and protection of fundamental freedoms provided for in our Constitution.

Madam, with those broad remarks as the context to my consideration of the Bill, I now turn to specific clauses in the Bill.

Clause 2 broadens the definition of "terrorist" – primarily through a new First Schedule in which membership of or association with specified "terrorist entities" would automatically make a person fall within the definition of a "terrorist" under the Bill. This is regardless of whether the person participates

Page: 53

in or facilitates the commission of specific acts of terrorism.

The definition issue was debated in this House in August 2002. But a decade on, it is also apt to revisit the definitions, notwithstanding that defining "terrorist" and "terrorism" is fraught with much difficulty. The transnational dimension of terrorism adds to the complexity.

Madam, because there is yet to be an internationally agreed, binding definition of terrorism, could we be bolder and attempt to fill the definitional void? Clause 2 widens the scope of who is a terrorist to include a person merely by just belonging to or being associated with specified terrorist organisations.

I fear that we would lose some of the moral high ground against terrorism with such a broad application. Put another way, it is like the Government saying, "Trust us, although we can't define them specifically, we know a terrorist, a terrorist act, and terrorism when we see one and so need a broad enough definition for us to act against them."

Why should we be concerned? A broad and tautological definition means that the law is more exposed to the increased possibility of abuse by the Executive, wilfully or otherwise, by over-zealous determination to deal with a perceived threat.

To be sure, the prudent and principled use of discretionary powers by the various executive agencies in our various anti-terrorism legislations will go a long way towards maintaining the legitimacy of the various laws on our statute books.

Mdm Speaker, it is impossible to legislate that those upon whom such discretionary powers are vested will exercise such powers with utmost scruples, responsibility and wisdom. But the need to exercise discretion properly is fundamental in any anti-terrorism legislation, with the Judiciary performing the ultimate check and balance role. Our anti-terrorism laws must be cognisant of the need for fettered discretion.

Clause 3 of the Bill seeks to increase the maximum fine for the various terrorism financing offences under the Act. It proceeds on the premise that fines ought to be aligned with the financial penalty for money laundering offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap 65A). However, given the severity of terrorism in terms of its impact on society, should not the fines and the jail term be heavier than for

Page: 54

less severe offences, such as money laundering, for non-terrorism offences?

Clause 6 seeks to protect from disclosure the identity of any person who gave information to the authorities under the principal Act under a legal duty. Clause 6 also criminalises the disclosure of information which will likely prejudice the various investigations under the Act.

Madam, while I appreciate the necessity of protecting identities and disclosures of information in order not to compromise investigative and enforcement actions, I am concerned with the broad wording of clause 6. Given that the liberty of an accused person is at stake, surely he must be given sufficient information on the allegations against him to enable him to mount a proper defence? But the proposed section 10A provides for a blanket non-disclosure regime which makes it difficult for an accused person to mount a proper defence.

Further, there are no safeguards in place to restrict the operation of clause 6 to situations where it is absolutely necessary on operational grounds. Given that criminal sanctions will be imposed on convicted persons under the Act, the Bill does not specifically provide that it would be an offence for a person, such as a law enforcement officer, to wilfully suppress information to the court, or provide information which he knew or believed to be false. The way clause 6 is drafted presupposes that the state could and would do no wrong.

In addition, clause 6 excludes the possibility that, even in the pursuance of a specific operational objective, executive actions would always operate in a just or reasonable manner. Given the broad powers conferred by clause 6, the potential for abuse is always there.

Madam, I am all for equipping the law enforcement agencies with the requisite powers to keep Singapore safe and secure. However, these special powers must be balanced by the appropriate safeguards.

Although not directly under the purview of the principal Act, I would like to ask the Minister whether other measures would be applied to those individuals who are found to be guilty of supporting terrorism financially. Would such supporters of violent extremist ideology be required to undergo counselling similar to that for alleged terrorists?

Finally, I would also like to ask the Minister whether the Government intends to have a comprehensive anti-terrorism legislation, rather than several

Page: 55

stand-alone legislations, with the omnibus Internal Security Act as the primary legislative tool.

I say this because I find the foundational premise of this Bill to be somewhat conflicted. The principal Act is a criminal legislation but it is also endowed with special powers that take it beyond the criminal law framework. This makes it difficult for the courts to regulate the proper use of the legislation or for an accused person to have the full protection that the criminal law regime normally provides. For me, the heart of the matter is a definitional one in which terrorism is neither completely within nor outside of our criminal law framework. Madam, despite my reservations, I support the Bill.

Mdm Speaker, thank you for allowing me to speak on this Bill that will help to protect the society and strengthen our security against a serious threat.

Terrorism has today become a real and persistent threat in our society. And although it is not new, as acts of terror have been recorded during previous episodes in history, we can all agree that terrorism has now become more audacious in its attempts, both successful and unsuccessful, as well as more permeating due to the sheer volume of the movement of capital, people, goods and services and information, due to globalisation and the IT revolution.

In Singapore, we have been fortunate that we have not directly felt the brunt of this ugly truth but we should not take this for granted. In combating terrorism, addressing its financing is a critical measure.

Arguably, the objective of terrorism is to strike fear in the hearts of societies. I refer to section 2 of the original Act, where a terrorism act has been defined. Although the use of threat has been listed as an act of terror in sub-section (2), it would be useful to expand this definition to include the act of conceptualising such threats. This ensures that the act of actually planning such threats can also be brought under the law and made liable for prosecution.

As has been seen in the recent examples in Singapore as well, individuals make threats to our society as practical jokes, or to satisfy personal vendettas. If the global trend in this can be relied upon, we may see a higher incidence of such threats made in Singapore, that could not only strike fear in the heart of our society, but also to disrupt the provision of essential services, including the

Page: 56

Police, armed forces, transportation or medical services, to name a few.

I strongly advocate that the Act include a strong deterrent for such individuals to make such threats, even if done in jest or for fun. We must dissuade such individuals in carrying out such irresponsible actions, and the law is one tool we can use, besides other avenues, including education.

In terms of providing property for terrorist purposes, I wonder if it would also be useful to specify clearly in either section 4 or 5 of the Bill that to house a terrorist, or to have reasonable belief that the person is involved in terrorist-related activities, is also an offence prosecutable under the Act.

Clause 3 of the Bill seeks to increase the maximum fine for various terrorism financing activities as set out under the Act. This is to align the fine amounts with the money laundering offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act. I would argue that the money laundering offence to aid a terrorism act could potentially lead to grave consequences – and, in many cases, more detrimental impact than in offences to aid corruption or drug trafficking. Without the risk of suggesting a hierarchy in crimes, I would urge the Minister to consider raising the fine amount for the various terrorism financing activities to be higher than the $500,000 proposed in the Bill, based purely on the potential damage this action could cause.

While I am happy that the Bill provides for protection of the identity of the whistle-blower or informant, I also think that a stronger deterrent must be established to complement the incentive of protection. Sub-sections (1) and (2) of section 8 of the Bill lists someone who has possession, custody or control of any property belonging to any terrorist or terrorist entity; or has information about any transaction or proposed transaction in respect of any property belonging to any terrorist or terrorist entity. Therefore, I propose that any person who contravenes these sub-sections, be made liable to pay a fine higher than the proposed $50,000 currently specified in the Bill.

Similarly, the fine penalty for those who disclose information that may prejudice the investigation should be higher than the $30,000 proposed to act as an effective deterrent.

In conclusion, I would like to emphasise that the threat of terror is a serious one and, so, there is every reason that harsher penalties should be considered to act as strong and effective deterrents. Besides increasing this deterrent, it is

Page: 57

also important that the Bill be expanded to include the act of threats, conceptualising terror and even housing terror suspects. Thank you, Mdm Speaker, I support the Bill.

Mdm Speaker, thank you for allowing me to join the debate.

According to counter-terrorism experts, it does not cost much to mount a terrorist attack. But money remains critical to meet the broader organisational costs of developing and maintaining a terrorist organisation and network. Terrorists need money to purchase deadly materials, fund strategic and operational planning, facilitate communications and travel, radicalise others and provide for their families. As such, finding means to raise, launder, transfer, store and gain access to funds remains a top priority for all terrorists groups.

The Achilles heel of terrorism financiers may be found in the choke points critical to laundering and transferring funds. Disrupting fund flows constrict the capabilities of terrorists and frustrate their ability to execute attacks. We need to deny terrorists access to financial tools and restrict their flow of funds, forcing them towards more costly, less efficient and reliable means of financing to the point where they are vulnerable to being picked up by intelligence agencies.

Page: 58

In fact, financial information has come to be one of the most powerful investigative and intelligence tools available to governments. As money moves through the financial systems, it leaves a verifiable trail enabling investigators to obtain critical information that may indicate illicit activity, identify those responsible, and uncover previously unknown links between terrorist operatives. Financial intelligence has helped to disrupt plots and prevent attacks. For example, the British authorities foiled the Summer 2006 liquid-explosive aviation plot, thanks in large part to critical financial intelligence.

Singapore has been tightening its laws to combat the financing of terrorism and money laundering. The Terrorism (Suppression of Financing) (Amendment) Bill, or TSOFA Bill, contains amendments that are timely and necessary to enhance the effectiveness of Singapore's counter-terrorism financial regime and strengthen Singapore's compliance with international standards set by the Financial Action Task Force (FATF).

Mdm Speaker, I support the amendments proposed in the Bill, including increasing the maximum fine for terrorism financing offences, making tipping–off an offence, and protecting the identity of informers. It is also a good move to consolidate all terrorism financing provisions contained in the various regulations under TSOFA, and to refine the exemptions that the Minister for Home Affairs may make to achieve compliance with the UN Security Council Resolution.

However, Madam, in other jurisdictions, such as Canada, Australia and Hong Kong, terrorist financing is criminalised as a money laundering offence under their overall anti-money laundering (AML) regimes, given the similarities of the methods used in money laundering and terrorist financing to mask financial resources and activities from the scrutiny of state authorities.

However, in Singapore, we have two separate legal regimes: TSOFA under the Combating of Financing of Terrorism (CFT) regime; and the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, or CDSA, for all other money laundering offences.

This structure creates the risk that related laws may become inconsistent over time, as well as create ambiguity about which law to apply. For example, the proposed amendment to increase the maximum fine in TSOFA is made to bring the fine amounts for terrorism financing offences in line with those for money laundering offences under CDSA. Both TSOFA and CDSA contain similar clauses on "Duty to disclose" knowledge or suspicion of a suspicious

Page: 59

transaction. But the penalty for contravention is a fine of $20,000 with no jail term under section 39 of the CDSA, whereas the penalty for a similar failure to disclose under section 8 of the TSOFA is a fine of $50,000 and/or a maximum five-year jail term.

In many instances, it is not possible for the private sector, such as the Financial Institutions, who file Suspicious Transaction Reports (STRs) to know the underlying cause of the suspicious transactions spotted. Moreover, it is common that terrorists raise funds from a range of criminal activities, from low-level fraud to involvement in serious and organised crime, including drugs and arms trafficking and extortion.

As terrorist and criminal activities are often intertwined, it is often difficult to determine whether the funds raised from these activities are destined for terrorist activities or simply the proceeds of general criminal activity. I would like to ask the Minister if there is an opportunity to simplify the legislative framework for AML and CFT to reduce the possible inconsistencies and to help all participants better understand and comply with the law.

Mdm Speaker, financial institutions (FIs) are regulated and required to implement processes to detect sanctionable transactions and report suspicious transactions. Currently, each bank defines its own AML and STR policies and procedures. The procedures for detecting suspicious transactions are far from being an exact science. The MAS recently revealed that it has imposed financial penalties on 22 FIs and issued 47 warnings and reprimands for weak controls. Such incidents reflect that FIs remain vulnerable to money laundering.

To help FIs become more effective in their efforts to guard against money laundering and terrorism financing, I would like to make the following recommendations for the Government's consideration:

First, rather than depend on each bank to define its own policies and procedures for AML and STR, Singapore should consider prescribing a more consistent approach for a minimum set of standards in the industry. Currently, some banks have stronger policies and processes than others, but a country is only as strong as its weakest link. Whilst I acknowledge that we need to allow FIs to operate a control framework that is commensurate with the size and complexity of their business activities, we must ensure that FIs operate at a minimally acceptable standard. Regulators should also encourage collaborations across FIs to share best practices and insights. Meeting AML and CFT standards should not be a competitive issue and banks should join hands

Page: 60

to safeguard the overall industry from illicit proceeds.

Second, regulators should provide a feedback mechanism to help FIs approach terrorism-financing related issues, such as STR, in a more targeted way. Many practitioners in the industry complain that the Government does not provide enough guidance about what it is looking for so that FIs can better finetune and calibrate parameters to pick up suspicious transactions. Currently, STR filers are unsure whether they are picking up and reporting the right trends, whether their systems are adequately calibrated, and whether they are better at reporting or not. Many are concerned that they are spending huge amounts of money on compliance that may be focused simply on checking the right boxes, but not the overarching objective of combating the financing of terrorism and money laundering.

The relevant authorities can assist the financial sector in its efforts to identify and prevent terrorist financing by sharing intelligence. FIs' understanding of trends, high-risk areas and persons of interest, will enable them to incorporate these into their procedures and risk models designed to identify terrorist financing. A multi-agency forum, similar to the British's "vetted group", comprising experts from law enforcement agencies and the regulated private sector, should be formed to consider sensitive intelligence on new money laundering risks, such that these can be shared as "industry alerts".

Third, when FIs are able to study an aggregated view of a suspicious client's transactions across banks and multiple jurisdictions, it is much more powerful than monitoring simply the transactions through their own banks in a single location, as this helps the FIs to monitor and "join the dots" on that particular client's overall financial activity, to determine if these transactions are suspicious or not. However, there are currently no such database and the regulatory practices in many jurisdictions restrict the flow of clients' information, even within the same bank, across borders.

Madam, to really win this war against terrorism financing, there need to be platforms to enable high-risk transactions to be monitored and information to be shared across banks and transnationally. After all, FIs already pool credit information through credit bureaus, so similar databases should be considered to monitor suspicious segments.

As the noose tightens in the formal financial sector to launder funds, terrorists will be forced to find alternative means. The physical movement of cash is one way terrorists can move funds without encountering the AML and

Page: 61

CFT safeguards established in FIs. There is evidence that some groups have converted cash into high-value and hard-to-trace commodities, such as gold and precious stones, to move assets outside of the financial system.

It is common industry knowledge that quite a few foreigners visiting Singapore from overseas often pay for their high-end purchases, such as watches and jewellery, here with armfuls of cash. How such individuals are able to bring or obtain such large amounts of cash in Singapore is worrying. In this day and age, persons with legitimate objectives can easily use cheques or credit cards to purchase high-value items, hence, dispensing with the need for cash-settled transactions.

We must guard against would-be terrorists attempting to utilise such means to "cleanse" their dirty deeds here. How aware are Singapore-based high-end art, wine, jewellers, precious stone and metal dealers and retailers of their AML and CFT obligations? How many STRs are filed in total, of which how many have been reported by non-financial institutions? How many end up being investigated and/or prosecuted?

To address this, I suggest that the Minister consider requiring a risk-based assessment of such vulnerable industries to be conducted and imposing industry-specific cash transaction reporting requirements – such that cash purchases above a threshold of, say, $30,000, need to be reported. I also suggest we step up education for vulnerable industries so that they are aware and effectively trained to fulfil their legal obligations.

I also have a question about the application of Singapore's AML and CFT regulations to transactions that take place within the Singapore Freeport, the free trade zone. While there may be no taxes imposed on both residents and non-residents on transactions that occur within the Freeport, it is crucial that AML and CFT regulations be applied and enforced even within the free trade zone to avoid possible abuse of Singapore territory for illicit purposes. Are there reporting requirements for cash-settled transactions within Freeport that exceed a certain threshold? I read from marketing material that there are "simplified customs procedures to preserve client confidentiality" within Freeport – I hope this convenience has been well balanced against our AML and CFT obligations.

I turn yet to another possible avenue of abuse by terrorists − the non-profit sector. According to FATF, "the misuse of non-profit organisations for the financing of terrorism is coming to be recognised as a crucial weak point in the

Page: 62

global struggle to stop such funding at its source." Charity groups are especially susceptible to abuse by terrorists and their supporters. They offer a veil of legitimacy for terrorist fundraising, attracting unwitting donors who are unaware that the money they donate for humanitarian purposes actually funds terror. The Government should develop strong oversight mechanisms for charities and NGOs, and guard against the possible infiltration of charities by terrorist operatives.

Madam, with globalisation, the volume of international remittance has more than tripled to US$381 billion in 2011 since 2000, making it even more challenging to detect suspect terrorist financing. Technology allows fund transfers by cell phone, transfer and storage of funds via online means, such as cashU, e-gold, bitcoins, while the Internet facilitates communication and radicalisation, logistical arrangements and funding support from potential donors anywhere in the world.

Madam, Singapore is approaching the continued threat of terrorism from a position of strength. Our strict legal and regulatory framework has enabled Singapore to avoid a proliferation of informal financial systems, including unlicensed money remitters, such as "hawalas", cash and chit type of networks and cash carriers that are common in other parts of the globe. We have rules on stored value cards. We have an enviable network of treaty parties to collaborate with in this global fight against terrorism.

We must continue to deny terrorists the money and means to engage in terrorism. I urge all parties to be cognisant of their critical role in keeping Singapore safe as they join hands with law enforcement and intelligence officers in this ongoing battle. Only by working together can we move the needle in this war against terrorism. Mdm Speaker, I support the Bill.

Mdm Speaker, despite more than a decade of counter-terrorism activity and tighter enforcement cooperation around the world, the recent unprecedented closure of US embassies in the Middle East and Africa, and the shock of the Boston Marathon bombings remind us how alive and real the threat of terror still is. Upstream measures, such as tackling and disrupting the financing and support of potential terrorist activity, remain vital in the fight against terror. I, therefore, support the Bill, which aims to strengthen the legal framework against terrorist financing.

Page: 63

I just have a few points to make for the Minister's consideration.

The first broad point is on clause 3, which introduces higher penalties via the new section 6A.

Previously, an individual who engages in terrorist financing activities prohibited under sections 3 to 6 of the Terrorism (Suppression of Financing) Act ("the TSOFA") would face, per charge, a maximum 10-year jail term, or a maximum fine of up to $100,000, or both. But, for a corporation, it would only face a fine of up to $100,000, although directors or executive officers complicit in the offence would potentially face an imprisonment term.

Clause 3 raises the maximum fines for individuals to half a million dollars and, for corporations, up to $1 million.

While this enhancement is definitely in the right direction, given that these terrorist financing offences are carried out with the intention or with the knowledge that terrorist acts will be carried out, I would share Mr Dhinakaran's point made earlier, that the maximum penalties are still considered low.

Firstly, the Ministry says that it wishes to bring the penalties in line with the general money laundering offences in the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, or CDSA for short. While there are certainly similarities between both types of offences, my view is that terrorist financing activities are, without doubt, far more serious than general money laundering offences, and should, therefore, be treated as such.

Secondly, I looked at some foreign legislation. In the United States, under Title 18 of the US Code, the maximum penalty for financing terrorism is a jail time of up to 20 years, or double our maximum, or fine, seemingly indeterminate, or both.

Thirdly, given how open Singapore's economy and financial system are, the number of foreign corporations and financial institutions operating here, and the difficulty of detecting terrorist financing activity, given the speed and complexity of the world of finance, I think the maximum penalties against corporate entities are still considered low. Some may well be prepared to run the risk, in light of the gains that may potentially be made dealing with funds of murky origin.

Page: 64

I, therefore, urge the Minister to further review the overall penalty framework at the next amendment. For instance, let the court determine the amount of fine based on the circumstances, rather than prescribing an artificial ceiling. Or, if a ceiling is preferred, let it be $X or a multiple of the value of the assets involved or profits gained or potentially gained out of such activities, whichever is higher. And let the gains be separately disgorged and confiscated in their entirety, over and above these fines, through quasi-civil action.

I move on to my second broad point, which is this: tough and rigorous laws such as these are important, but what is far more important is the ability of our security forces to detect violations and to prove them evidentially before our courts.

A few sub-questions: firstly, how extensive and rigorous is our sentinel watch over financing activity taking place in Singapore, as well as through Singapore? Apart from the typical financial institutions, such as banks, finance companies and insurance companies, do we also monitor moneylenders, pawnbrokers, remittance agencies, informal and traditional money transfer agents, property agents, and so on? Both Ms Sylvia Lim and Ms Foo Mee Har have earlier described the complex and imaginative ways in which financiers seek to move funds across borders. How confident are we in our financial centres in Singapore that money flowing into Singapore to finance terrorism here or in the region will be caught? Do we impose requirements that these entities conduct checks and screenings and put in place due diligence systems to weed out suspicious transactions?

Secondly, is the Minister able to share with this House how many investigations and convictions have taken place under the TSOFA or similar terrorist financing offences under the United Nations (Anti-Terrorism Measures) Regulations?

Thirdly, how do other countries rate Singapore's ability to tackle this problem of terrorist financing? How have our latest mutual evaluation results been under the FATF framework? Are there any major gaps identified through mutual evaluation that we need to plug in the context of anti-terrorist financing, as well as our compliance with the Special Recommendations?

My third point is about terrorism and the Internet. So many examples of Internet self-radicalisation and Internet-based fermenting of hate abound that policymakers around the world worry over how to effectively tackle this problem. How will we in Singapore handle this? Can we proactively block

Page: 65

access or make access to such sites that promote terrorist self-radicalisation difficult? And would funding, financing or establishing such websites amount to a violation of TSOFA?

[Deputy Speaker (Mr Seah Kian Peng) in the Chair]

My last point is a more general one. It has been more than a decade since the 2001 New York Twin Towers bombings and the uncovering of the Yishun MRT bomb plot right here in Singapore. Terrorists look for soft targets to achieve maximum dramatic effect, and, like any other city in the world, we have so many of such soft targets. While we continue to actively police and protect such installations, can I ask the Minister the following:

Firstly, how can we continue to exercise the highest levels of diligence and alertness day-after-day when we protect and police civilian areas, such as MRT stations, airports, bus depots, shopping malls and so on? How do we prevent complacency or a false sense of security from setting into our people and our security forces?

Secondly, what is the state and level of Singapore's cooperation and engagement with key law enforcement and anti-terrorism agencies worldwide? As we would all know, we cannot, in Singapore alone, contain the problem of terrorism. It is a global effort.

Finally, how ready and how resilient are we in Singapore in the event of catastrophe? Are our contingency plans ready, comprehensive and fully practised? With that, Sir, I support the Bill.

Mr Deputy Speaker, I stand in support of the Bill. I also stand as someone who has been up close and personal with victims and casualties of acts of terrorism. I was in Afghanistan treating casualties after September 2001. I also managed casualties from the Bali bomb blast and the Jakarta bomb blast, for example. Therefore, understandably, I support the stricter penalties. We, indeed, have to put forth our stand that we mean business and are extremely serious on matters related to terrorism.

Pertaining to the fines and penalties for the terrorism funding offences, can I just clarify the following? What will happen if the funding comes from an

Page: 66

overseas entity or institution? What will be the processes involved? Do we have any arrangements in ASEAN for cross-border cases? As countries which are a party to the International Convention for the Suppression of the Financing of Terrorism, are there certain courses of action, cooperation, legal assistance or even extradition that we have with other states?

Also, what are the platforms for countries, signatory to the Convention, to share best practices? Do we share some common electronic reporting filing system, collate resources and perform surveillance on suspicious activities related to the subject?

I also feel it is crucial for the Ministry to engage financial entities and institutions with regular and systematic audits and visitations or seminars to help educate and create awareness and, hopefully, deterrence.

Our local policies and MAS' guidelines and audits are certainly steps in the right direction. Reinforcements are certainly necessary, and compliance and proper behaviour in accordance with these are also important to be reinforced at appropriate times. For the community and the public at large, groups, such as the religious rehabilitation group, can certainly help with education.

Also, Sir, how are we preparing and adapting to the use of more cyber techniques and channels in abusing financial institutions, organisations and individuals in terrorism-related offences?

Finally, I would like to bring up a point pertaining to the 2012 Country Reports on terrorism and the comments made on our counter-terrorism cooperation with other countries. It was described as "inconsistent and masked by a transactional mindset". The report also criticised our bilateral and multilateral engagements on counter-terrorism intelligence and law enforcement cooperation. I personally feel this is inaccurate and an unfair view which reflects the lack of depth of understanding of our approach and strategies which focus on mutual trust and respect between nations. In fact, Sir, by debating and passing this Bill today through Parliament for implementation, it is yet another platform to show our alignment, commitment and how we are a party to the global counter-terrorism efforts, from every angle and perspective. With that, once again, I support the Bill.

Page: 67

Mr Deputy Speaker, first, let me thank all the Members who have spoken, for their considered views on the Bill and also for their general support for the Bill and its policy objectives.

Members have raised a number of points which fall into three broad areas.

The first relates to the importance of international cooperation in combating terrorism financing. The second relates to the need for an effective enforcement regime. Finally, Members have also raised questions on specific provisions in the Bill. I will address these in turn.

Ms Foo Mee Har and Assoc Prof Fatimah Lateef spoke on the need for countries to work closely together to combat terrorism financing. Specifically, Assoc Prof Fatimah asked about the cooperation mechanisms among countries that are parties to the International Convention on the Suppression of Financing of Terrorism. The Terrorism (Suppression of Financing) Act (TSOFA) includes provisions that allow the Convention to serve as a basis for mutual legal assistance under our Mutual Assistance in Criminal Matters Act (MACMA) and for extradition under our Extradition Act. We are, therefore, able to make and accommodate requests for mutual legal assistance and extradition involving other convention parties.

Our law enforcement agencies work closely with their foreign counterparts to share best practices and exchange information to investigate and disrupt any terrorist plot or terrorist financing activity. For example, the Suspicious Transactions Reporting Office (STRO) in the Commercial Affairs Department (CAD) has signed Memoranda of Understanding (MOUs) with its Financial Intelligence Unit counterparts in other countries, such as Hong Kong, Japan, Malaysia, United Kingdom and United States, for the purpose of combating money laundering, terrorism financing and related criminal activities. These MOUs allow Financial Intelligence Units of different countries to share financial intelligence with one another.

Regarding Assoc Prof Fatimah Lateef's question on the processes to deal with funding from an overseas entity, it is an offence under the TSOFA to deal with funds belonging to terrorist or terrorist entities, regardless of where the funds originate, locally or overseas. If the financial institutions detect funds which they know or have reason to believe may be from terrorists or terrorist entities, they are prohibited from dealing in such funds, and are required to make a report to the law enforcement authorities for investigations to be

Page: 68

conducted.

Sir, the transnational nature of the terrorism threat makes cooperation across countries all the more important. We are fully committed towards working with the global community in the fight against terrorism financing. While Singapore is not directly involved in the review of Al Qaida sanctions by the United Nations Security Council mentioned by Ms Sylvia Lim, we will, as a member of the UN and a major financial centre, review and refine our regime in line with new developments, including any enhancement of sanction measures by the UN Security Council.

Mr Desmond Lee asked how we fared relative to other countries in tackling terrorism financing. Singapore did well at our last Financial Action Task Force (FATF) Mutual Evaluation in 2008. Singapore was rated either Compliant or Largely Compliant for the FATF's Special Recommendations on Terrorist Financing. Our results were on par with those of the United States and United Kingdom. The amendments in this Bill will further strengthen our compliance with the FATF standards.

Let me now turn to the enforcement regime. Domestically, we have also put in place a robust regime against terrorism financing and money laundering. As various Members − Mr Desmond Lee, Assoc Prof Fatimah Lateef and Ms Foo Mee Har − had mentioned, having tough laws alone is not enough. We must be able to detect and enforce against violations, as well as engage key stakeholders in various sectors to raise awareness and strengthen capabilities.

Section 39 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) requires any person to file a Suspicious Transaction Report (STR) if he has reasonable grounds to suspect that any property is linked to criminal conduct, and such suspicion arose in the course of employment or business. This requirement applies to all persons in Singapore, including financial institutions and entities in other sectors. This would also apply to any person working in the Freeport facility in Singapore highlighted by Ms Foo.

Mr Arthur Fong and Ms Foo Mee Har spoke on the important role that our financial institutions play in preventing and detecting suspected terrorism financing activities. We fully agree with a mutually reinforcing approach to fight against the scourge. Besides the filing of STRs, financial institutions are also required by MAS to perform ongoing monitoring of their customers. MAS conducts regular on-site inspection and off-site supervision to ensure

Page: 69

compliance. Financial institutions which fail to put in place the necessary measures are subject to a range of supervisory actions, including sanctions for serious breaches.

Ms Foo made a point about risk-based approach and being more targeted, and we agree with that, because a one-size-fits-all approach does not work when you talk about risk management and transactions monitoring. Instead, MAS supervises the financial institutions, including money changers and remittance agents, to assess that the robustness of their systems is commensurate with the scale and complexity of their operations, and the risk profiles of their customers. So, it is a calibrated approach and it takes into account the risk. MAS also provides supervisory guidance to financial institutions to rectify any weaknesses, including in their processes for STR filing. Regular outreach is conducted, together with industry partners, to raise awareness. The STRO has been engaging various persons and entities that have filed STRs on an ongoing and regular basis to provide feedback on their STRs. So, this is part of the education process that several Members spoke about.

Besides financial institutions, STRO also works through business associations and regulatory bodies to broaden the reach to businesses and professions from other sectors, such as real estate agents, lawyers, accountants and jewellers. The appropriate relevant regulatory agencies will continue to review and enhance the regulation of these sectors to mitigate the evolving terrorism financing and money laundering risks. But the outreach is an ongoing effort. These efforts have resulted in more suspicious transaction reports being filed by industry players. In 2012, STRO received nearly 18,000 STRs, of which more than 2,000 were filed by non-financial institutions. STRO has also assessed that the quality of these reports has improved over the years. We will continue the outreach efforts to the various sectors to strengthen the STR reporting regime.

Mr Desmond Lee and Ms Sylvia Lim asked about the number of investigations and convictions for terrorism financing offences. We have investigated a number of cases, but there has not been any prosecution thus far. This is because most cases involved terrorists who were self-financed and the issue of third-party financing did not arise. Swift action was taken to detain the terrorists. As a matter of course, where there are suspected financing activities, provisions under the Criminal Procedure Code may be used to seize the funds. Once it is confirmed that it involves terrorist activity and the person is deemed a terrorist, section 6 of the TSOFA applies to prohibit dealing in terrorist assets. Notice is then served on institutions and counterparties not to

Page: 70

transact with the terrorist which, essentially, freezes his assets.

Mr Deputy Speaker, Singapore operates a rigorous regime against terrorism financing and money laundering. The proposed amendments in this Bill, such as the increased penalties and new provisions to protect informers and criminalise tipping-off, will further strengthen our enforcement regime against terrorism financing.

I will now move on to specific questions that Members have on TSOFA and the proposed amendments in the Bill.

Ms Foo Mee Har asked whether the legislative framework to counter terrorism financing and money laundering, which is currently found in two different Acts – the TSOFA and CDSA − should be simplified to reduce possible inconsistencies.

Sir, the objectives of the TSOFA and the CDSA are somewhat different. The CDSA focuses on depriving criminals of their proceeds from a criminal offence. The TSOFA, on the other hand, can be pre-emptive – it seeks to cut off the resources available to terrorists, so as to prevent the commission of terrorist acts in the first instance. While there may be some similarities, such as in terms of methods used to carry out money laundering and terrorism financing, there is merit in having two different legal regimes which allows us to take a more calibrated and targeted approach, depending on the nature of the offence.

MHA is reviewing the CDSA, including the penalties provided within the Act. Where it is necessary to align certain provisions or penalties with the TSOFA, we will do so.

Ms Foo commented that it may be difficult for the bank to establish whether the suspicious transaction or funds is for terrorist financing or other criminal activities, and, therefore, whether to make a report under TSOFA or CDSA. In practice, we would require just one report from the institution. The authorities will then follow up with the investigations and assess whether an offence under TSOFA or CDSA has been committed.

Assoc Prof Eugene Tan was concerned that the definition of "terrorist" in the Bill was too broad. On the other hand, Ms Sylvia Lim asked if there were concerns that certain terrorist groups were not listed and identified specifically. The Bill defines a terrorist to include any person who commits, attempts to commit, participates in, or facilitates the commission of any terrorist act. It also

Page: 71

includes any person set out in the First Schedule of the Bill. So, even if he is not in the Schedule, if he fits the definition, then he is caught by the Bill.

Mr Deputy Speaker, our definitions of "terrorist" and "terrorist act" are consistent with the legislation of other jurisdictions, such as Hong Kong. It is also in line with the International Convention on the Suppression of Financing of Terrorism. We have taken reference from international standards and comparable jurisdictions.

The provision to specify persons as terrorists in the First Schedule is intended to enable us to meet our international obligations under the UN Security Council (UNSC) Resolutions, which require financial sanctions to be imposed on individuals and entities designated by the UNSC Committees.

This Schedule is currently set out in the United Nations (Anti-Terrorism Measures) Regulations and will be moved to the TSOFA with the consolidation of the overlapping terrorism financing provisions.

This Bill does not change the existing definition of "terrorist" in the Act.

Mr Dhinakaran suggested expanding the definition of "terrorist act" in the TSOFA to criminalise the act of planning or conceptualising a terrorist threat. The TSOFA does not criminalise terrorist acts but the financing of terrorism. We have to be clear about the intent of the Act.

The commission of terrorist acts is criminalised under other statutes, such as the Terrorism (Suppression of Bombing) Act, Hostage Taking Act and Maritime Offences Act. The planning and agreement to commit such acts would be an offence of criminal conspiracy under section 120B of the Penal Code.

Mr Desmond Lee, Assoc Prof Eugene Tan and Mr Dhinakaran also asked whether the penalty for terrorism financing offences should be set higher than for money laundering offences, given the severity of terrorism acts. I appreciate the sentiment behind the questions and the proposals.

The penalties that have been proposed for the terrorism financing offences are in line with those of other jurisdictions. For example, Canada, Hong Kong, Germany, Switzerland and United Kingdom impose a maximum imprisonment term ranging from five to 14 years. The Member mentioned the US legislation, where the maximum imprisonment term is 20 years. So, there is a spectrum

Page: 72

and we think 10 years is a reasonable reference point at this stage.

The Bill will also raise the maximum fine for terrorism financing offences to the same level as for money laundering offences, that is, $500,000 in the case of individuals and $1 million in the case of entities. This is a significant increase – five-fold for individuals and 10-fold for entities – and it should provide a strong deterrence. I recognise the point that Mr Lee made about corporations and the sum of $1 million may not be significant. But we have to look at it in totality. Once an entity is the subject of such action, the reputational damage and the limitations that will affect its operational capabilities will also have a significant sobering effect.

We have made this move to significantly enhance the penalties. We will monitor the effectiveness of these enhanced penalties and we are not averse to the idea of reviewing them if necessary.

Besides increasing penalties for terrorism financing offences, the Bill also seeks to strengthen our counter-terrorism financing regime through the inclusion of a new section 10A to protect informers.

Assoc Prof Eugene Tan was concerned that section 10A may make it difficult for the accused to mount a defence. Mr Deputy Speaker, we need to strike a balance in the public interest between giving the accused unlimited access to all available information for his defence, and protecting informants so that they will not be afraid to provide much needed intelligence to prevent terrorist attacks. This does not absolve our enforcement agencies from conducting proper investigations and gathering the requisite evidence to prove all the elements of the offence. But the key point here is this balance is an important one and this Bill seeks to strike a balance in the context of what we have experienced in Singapore today.

Mr Hri Kumar also spoke on the circumstances that would permit disclosure of the informer's identity and safeguards available.

Disclosure is permitted in limited circumstances specified in sub-section (3). Disclosure is allowed in criminal proceedings if the court is satisfied that an informer had wilfully made a material statement which he knew or believed to be false. In other proceedings, disclosure is permitted only if the Court is satisfied that justice cannot be fully done between the parties without the disclosure.

Page: 73

This exception is intended as a safeguard against injustice resulting from protecting the identity of informers. In such situations, the Court will assess whether to lift the protection after weighing the interest of protecting the informer's identity.

This is an established system. We have experience in this and it has generally worked well for us. Other statutes, such as the Misuse of Drugs Act, contain similar provisions to protect informers.

Assoc Prof Eugene Tan was also concerned about witnesses providing information which they knew or believed to be false during court proceedings. Although the TSOFA itself does not have a specific provision to criminalise such acts, they can be dealt with under the Penal Code.

Under section 193 of the Penal Code, for example, if a person intentionally gives or fabricates false evidence in a judicial proceeding, he is liable to a fine or an imprisonment term of up to seven years, or both.

I will now move on to the comments from Members on the new section 10B which criminalises tipping-off that prejudices an investigation under TSOFA.

Mr Hri Kumar has raised some questions on the scope of the legal privilege in the new section 10B. As Mr Kumar has pointed out and, as the Minister for Law can attest to, the scope of this privilege was explained when the Evidence Act was amended in 2012.

The reasons for limiting the scope of the privilege apply equally to the use of legal privilege as a defence to the offence of tipping-off. Given the gravity of the offence of terrorism financing, we see no justification, in this instance, for a wider defence, especially since we want to safeguard against abuse of legal professional privilege.

The Bill also refines the exemption provision in section 7 to support our terrorist rehabilitation efforts. Mr Hri Kumar suggested that section 7(1) should be drafted more narrowly to spell out the precise circumstances in which an exemption may be granted.

Under the General Exemption Order for basic expenses to be made under section 7(1), the definition of "basic expenses" will be clearly specified so that only transactions, such as payment for foodstuff, rent, mortgage, medicine and public utility charges that fulfil this definition, will automatically be exempted.

Page: 74

Outside of the General Exemption Order for basic expenses, there may be other legitimate circumstances that warrant an exemption order to be made. It is not feasible to spell these out precisely or comprehensively, given that the nature and type of such transactions or activities may vary and evolve over time. But let me assure the House that our agencies will carefully examine the merits of each case before granting any such exemption.

As for the question on revoking of exemptions, an exemption order can be revoked by the Minister. If an exemption order has been breached, then the exemption may not apply and the person exempted will be guilty of the offence for which he is exempted.

Mr Hri Kumar and Ms Sylvia Lim asked about the safeguards to ensure that funds will not be channelled towards terrorist activities. Again, I want to assure Members that there are procedural safeguards in place.

Our law enforcement agencies will conduct a thorough investigation at the point of application for such an exemption to ensure that the transaction is for a legitimate purpose before any exemption is granted, and these exemptions can and will include conditions and requirements, such as regular reporting. Our agencies will also monitor the exempted transactions or activities to ensure that the property and services are utilised for the declared purposes.

The Government works closely also with the community on the rehabilitation of terrorists and to counter the spread and influence of extremist ideology in Singapore.

Assoc Prof Eugene Tan asked whether persons who are found guilty of terrorism financing offences will be required to undergo counselling. All terrorism-related cases, including terrorism financing, will be thoroughly investigated. Subjects who are found to be ideologically indoctrinated to support terrorism activities will be encouraged to undergo counselling as part of their rehabilitation.

Mr Desmond Lee asked about the levers to block access to and funding of websites that promote radicalisation. The TSOFA makes it an offence to provide funds for terrorist purposes, which would include the funding of extremist websites. Under the Broadcasting Act, MDA is also able to require Internet Service Providers to block access to such sites.

Page: 75

Mr Deputy Speaker, I believe I have substantively covered the points that have been raised by various Members in the course of this debate. I want to stress that terrorism continues to pose a significant security threat, both globally and in the region.

Singapore has consistently taken a strong stance against terrorism. As a responsible member of the international community, Singapore is committed to supporting international efforts to combat terrorism, including terrorism financing.

The proposed amendments will align our regime with the practices of other jurisdictions. They will also bring us into greater compliance with international standards, as well as strengthen Singapore's competitiveness and status as a trusted financial hub.

I urge Members of the House to give your support to the Terrorism (Suppression of Financing) (Amendment) Bill.

Thank you, Sir. I have two clarifications for the Second Minister. Earlier, the Second Minister mentioned that, so far, there have been no prosecutions under the Act. I wonder if he is concerned about that because the Act has been in force for about 10 years now. How does he read the fact that there has been no prosecution so far?

Secondly, it is in relation to the UN listing, a point which I raised earlier about the two groups which ISD identified as active in Singapore in collaboration with Al Qaeda and JI. I agree with what he mentioned about the definition being an inclusionary one, so it is not just whether you are on the list but also whether you are engaged in such activities. My follow-up question is whether Singapore, as a member state of the UN, had tried to get these two groups listed because, I think, under the procedure, member states are allowed to do so. I would like his clarification on that.

Sir, the fact that there were no prosecutions under the Act per se is not a cause for concern. As I stated earlier, and I will explain again, it

Page: 76

is because the overwhelming majority of cases in our context have been cases of terrorists who were self-financed. So, the issue of third-party financing does not arise. However, once it is confirmed that there is terrorist activity and the persons are deemed terrorists, the appropriate notifications will be served on the financial institutions and other relevant parties, to ensure that they understand that transacting with these individuals or entities would constitute an offence under TSOFA.

Ultimately, the real test is whether we have been able to pre-empt such incidents from occurring in Singapore. So far, the record is good, but we need to continue to be vigilant and not take things for granted. And many of the provisions in this Bill are really intended to strengthen our ability to counter this form of activity.

On the UN listing and whether Singapore specifically made an effort to list these two entities, I am not aware of the details of the effort on our part. I will provide clarifications on this issue to the Member later. But substantively, I think the point is that regardless of the list in the Schedule, we are not constrained. As long as an entity or an individual is identified as a terrorist threat, then the appropriate provisions of this Bill, and, indeed, any other related Acts covering the issue of terrorism, will come into force.

Sir, I would like to ask the Second Minister whether the Government has any plans to have a comprehensive anti-terrorism legislation and, if not, why not.

Sir, at this stage, we do not have a plan for a comprehensive Act for terrorism. As I have enumerated in the course of my Second Reading speech and the response to Members, we have a range of Acts and provisions across different pieces of legislation that enable us to act against terrorism, whether it is pre-emptively or on an ex-post basis. And, indeed, one could argue that whilst this may not be elegant from a legislative point of view, it does give us the flexibility to take calibrated and targeted action, depending on which piece of legislation is most appropriately used in the context of the actions that are required. Having said that, I will not rule this out but it is certainly not on the agenda at this point.