The Suspicious Transaction Reporting Office ('STRO') of the Commercial Affairs Department has compiled a set of Frequently Asked Questions to provide guidance to the legal profession in the area of lodging a suspicious transaction report ('STR').

Q1.

After filing a STR, must a law practice or a lawyer seek the consent of STRO or seek its directions, before proceeding with the transaction for the client?

A:

There is no requirement in the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act for STR filers to seek the consent of STRO or to seek STRO's directions before proceeding with the transaction for the client.

Q2.

Is there is a moratorium following the filing of a STR during which a law practice or a lawyer cannot proceed with the transaction for the client?

A:

There is no moratorium on transacting for the client after the filing of a STR.

Q3.

After a law practice or a lawyer has filed a STR on the client, how long must the lawyer wait before he can continue acting for this client?

A:

There is no provision in the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act prescribing a period during which a lawyer cannot act for a client after a STR has been filed on the client. After a STR has been filed, the STR filer may wish to contact the STRO analyst assigned to the case or stro@spf.gov.sg, for advice on certain transactions - for example, whether they can proceed to deal with the purchase of real estate. This need could arise in a case when the property or transaction is suspected to be linked to proceeds of crime. STRO will provide a response based on the information available. STRO will need more time to respond, in cases where STRO has disseminated the information to law enforcement agencies or foreign financial intelligence units.

Q4.

Can a law practice or a lawyer continue the relationship with the client after a STR has been filed on the client?

A:

The decision whether or not to continue the relationship with the client should depend on the standards of prudence of the law firm. A STR filer may decide to terminate the client relationship when the commercial or reputational risks are high.

Illustration: The client has approached the lawyer to purchase real estate. The news media has recently reported that the client is alleged to have committed a cheating offence. The client proposes to pay for the purchase of the real estate in cash. The client does not provide sufficient information about the source of his funds. The purchase of the property is entered into at a value significantly higher from its market value.

The lawyer should determine whether these circumstances, separately or together, provide reasonable grounds to suspect that the cash funds proffered by the client could be connected with criminal conduct. The lawyer should immediately file a STR if there is reason to suspect the funds is linked to criminal activity. The lawyer may then want to consider whether there is a commercial or reputational risk in continuing with the client relationship.

Q5.

After a law practice or a lawyer files a STR, how does the lawyer tell the client that he cannot continue to represent him, without tipping off the client?

A:

When a law practice or a lawyer decides to terminate the client relationship, they should not inform the client or any third party that a STR has been filed. This may constitute a tipping off, an offence under section 48 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act. The law practice or lawyer should give an appropriate reason to the client for terminating their relationship. The law firm could, for example, cite compliance requirements as a reason:

 

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Risk Management or Compliance Department instructs to decline representation. We are unable to give details.

 

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The matter did not accord with internal risk management policies and we are unable to give details.

Q6.

Can the STR filer discharge his client without incurring liability under the 'no-tipping off' provision?

A:

When a law practice or a lawyer decides to terminate the client relationship, they should not inform the client or any third party that a STR has been filed. This may constitute a tipping off, an offence under section 48 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act. The law practice or lawyer should give an appropriate reason to the client for terminating their relationship. The law firm could, for example, cite compliance requirements as a reason:

 

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Risk Management or Compliance Department instructs to decline representation. We are unable to give details.

 

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The matter did not accord with internal risk management policies and we are unable to give details.

Q7.

What kind of action can the STR filer take after the STR is filed?

A:

After a STR is filed with STRO, no further action is required of the STR filer unless instructed by STRO. STR filers may wish to conduct their business relationship with the client in accordance with their internal risk management policies and standards of prudence.

Q8.

In the following situation, would the STR filer have any protection from liability?

A:

Situation: The STR filer holds off acting for the client. Liabilities were incurred during the 'waiting period'. For example, the real estate transaction option period lapses and the client loses a profit on the sale. The client does not receive his funds needed to complete his business dealings. The client threatens to sue the STR filer for costs or losses incurred by the 'delay' of the STR filer.

STRO is unable to provide legal advice. There is, however, statutory protection accorded to STR filers if they made the STR in good faith. Under section 39(6) CDSA, where a person files a STR in good faith, "the disclosure shall not be treated as a breach of any restriction upon the disclosure imposed by law, contract or rules of professional conduct and he shall not be liable for any loss arising out of the disclosure or any act or omission in consequence of the disclosure."

Q9.

After a STR is filed, will STRO notify the filer of the outcome?

A:

STRO will acknowledge receipt of a STR filed by email or post, and provide the name of the STRO officer in charge of analysing the STR. STRO will inform the STR filer of the outcome after the STR analysis is completed.

There are 3 possible outcomes:

 

1)

STRO has completed its analysis of the STR and there is insufficient basis to take further action on the matter. The intelligence developed from the STR has been collated for future reference. No further action is required of the STR filer unless notified otherwise.

 

2)

STRO has completed its analysis of the STR. The intelligence developed will be or has been disseminated to the relevant investigative agencies for possible action. No action is required of the STR filer unless notified otherwise by STRO.

 

3)

The information from the STR was used in an investigation which concluded in a successful prosecution.