Indonesia to probe transfers to Singapore

Indonesia is investigating reports that $1.4bn held by Standard Chartered in Guernsey, mainly on behalf of Indonesian clients, was transferred to Singapore just before the island moved to new tax transparency rules, officials said.

A source familiar with the matter said late last week, confirming news reports, that the Monetary Authority of Singapore and Guernsey’s Financial Services Commission were looking into that movement of assets in late 2015 — months before the Channel Island adopted a global framework for the exchange of tax data.

Under those rules, countries automatically share annual reports on accounts belonging to people subject to taxes in each nation. Britain, Guernsey and Singapore have all signed up, but Guernsey implemented the rules ahead of Singapore.

Indonesian and other regulators have not confirmed the nature of the customers or of worries around the funds, but a person familiar with the matter said part of the concern stemmed from links between some private banking clients and the Indonesian military.

“This was not a transfer by one Indonesian citizen but by many customers. We are now checking their annual tax reports, as well as their report of assets,” Hestu Yoga Saksama, a spokesman for Indonesia’s tax office, said.

“If those assets are reported in annual reports or declared during the tax amnesty, it surely means there are no problems. But if they were not, we are going to follow up.”