4 measures investors and businesses must be aware of in 2024

One of the measures will screen investments in entities critical to Singapore’s national security.

Collaborating with lawyers from top firms in the country, Singapore Business Review has curated a list of critical measures which are likely to impact business and investors alike in 2024.

First on the list is the “Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) (Amendment) Bill” (CDSA) which regulates and addresses “the flow of funds arising from criminal activities, such as drug trafficking and corruption as well as money laundering.”

Recently, Singapore was rocked by its biggest money-laundering scandal to date which led to the arrest of 10 foreigners and seizure of more than $2.8b (US$2.1b) of assets that included 152 properties.

The bill, however, was discussed in the Parliament even before the scandal broke out.

Keith Tnee, senior partner at Tan Kok Quan Partnership, said the amendments in the new bill seeks to address instances “where people may retain, control, have access to funds, which are the fruits of such criminal activities, which they either know or should have known of.”

“It seeks to extend the scope [of the older bill] to people who may negligently failed to investigate into the provenance of these offenses,” Tnee added.

According to the Ministry of Home Affairs (MHA), this means that a bank account owner, who have received or sent money found to be proceeds of a crime, may be held liable if he or she gave away control of his bank account and did not take any measures to understand what his or account will be used for.

Following Singapore’s latest money laundering scandal, Tnee believes that there will be an increase in regulation targeting such cases apart from the CSDA Bill.

“This could be relevant to companies that handle large sums of money coming from overseas, particularly those from the banking or financial industries, and they could potentially see more stringent measures being imposed on the industry,” Tnee said.

Significant Investments Review (SIR) Bill

The second bill on the list aims to protect Singapore’s national security interests by screening significant investments in, and control of, entities considered critical to national security.

Under the Significant Investments Review (SIR) Bill which was first introduced in October 2023, entities that are critical to Singapore’s national security interests are designated as “Designated Entities” and will be subject to specific restrictions.

Joo Khin Ng, partner at Morgan, Lewis & Bockius LLP and director at Morgan Lewis Stamford LLC, said these restrictions include requiring investors to obtain prior approval from the government before acquiring a certain percentage of ownership or control in a Designated Entity; limiting the voting rights of foreign investors in a Designated Entity; and requiring foreign investors to divest their holdings in a Designated Entity if they are found to pose a threat to Singapore’s national security.

According to Ng, the minister will have the power to designate any entity that is incorporated, formed, or established in Singapore; carries out any activity in Singapore; or provides any goods and services to any person in Singapore.

“Before the minister designates any entity, the minister must, unless it is not practicable or desirable to do so, give notice of their intention to designate the entity to the entity concerned and give the entity at least 14 days from the date of notice to make written representations on the proposed designation,” Ng stated.

Workplace Fairness Legislation

Another bill which will be introduced in the Parliament in 2024 is the Workplace Fairness Legislation.

Ng said the bill aims to protect workers from discrimination on the basis of race, religion, language, sex, marital status, age, disability, sexual orientation, and other relevant factors.

“It will also provide a clearer legal framework for reporting and addressing workplace discrimination,” added Ng.

The bill, according to the International Bar Association (IBA), will “provide employees with specific causes of action and access to damages for workplace discrimination” and provide “specific enforcement mechanisms for the government to impose penalties for companies that engage in workplace discrimination.”

The legislation, however, does not cover workplace discrimination on the basis of sexual orientation, gender identity, gender expression and sex characteristics (SOGIESC).

“Instead, [it] will have to be dealt with under the existing non-binding Fair Employment Guidelines,” said IBA.

Amended Insolvency, Restructuring and Dissolution Act (IRDA)

This bill paves the way for the extension of the Simplified Insolvency Programme (SIP) to 2026.

Tnee said the SIP is essentially a “cheaper and easier way” for company to either restructure their debts.

“Given the potential financial headwinds, we may see some companies seeking recourse under this program for a couple of months,” Tnee said.

Tnee said companies in Singapore may have to “look out” for the finances and the financial health of their corporate debtors, which will likely be small and medium sized companies (SMC), in case some of them go under the program.

“Companies with corporate debtors may face some difficulty in recovering some of the debts of these SMCs because of the debt restructuring programme,” added Tnee.

Tnee said it is important for companies to have a system to monitor how much credit is being extended to their corporate debtors, “especially the smaller players in the market and also to track the aging of debts and also how quickly some of these debtors are actually repaying this debt.”

“That could always serve as a very important warning, an early warning sign as to the financial health of the debtors,” Tnee added.