SINGAPORE — There is no risk of Singapore Freeport becoming a haven for money laundering and terrorist financing, as the operations at its storage facility are already closely supervised by the authorities, company Chairman Tony Reynard has told TODAY.

Mr Reynard was responding to questions concerning the National Risk Assessment (NRA) report released last Friday in which Singapore Freeport was identified, along with other sectors such as virtual currencies and precious stones, for further study on whether it could be used to channel illicit funds.

Opened near Changi Airport in 2010, Singapore Freeport licenses out storage vaults for valuables such as artworks, gems and wine. Trading of items stored within the facility is allowed and is not subject to any tax or duties.

The NRA report said the authorities will seek to better understand how money laundering and terrorist financing can be carried out through channels such as the Freeport, prompting Mr Reynard to launch a robust defence of the way the facility operates and the regulatory controls already in place.

“Freeport Management, which runs Singapore Freeport, contracts service agreements with reputable freight forwarding companies and other logistics companies,” he said.

These include Christie’s Fine Art Storage Services, Stamford Cellars and Fine Art Logistics.

“Furthermore, all operations at the Singapore Freeport are under the supervision of Singapore Customs, which can access anything at any time,” Mr Reynard explained. “All goods within our walls are inventorised by the respective service providers, and the (Singapore) Customs may access this inventory any time for verification. Items that change hands have naturally to be registered.”

Transactions at Singapore Freeport are therefore subject to proper oversight, he said, adding: “I do not understand how (the risks of money laundering and terrorist financing) could be higher than anywhere else.”

The NRA was a two-year government-wide exercise assessing 14 financial sectors and eight non-financial sectors for exposure to money laundering and terrorist financing risks.

This is not the first time Singapore Freeport has come under scrutiny. In November last year, the company was mentioned in an article on The Economist as one of the “freeports” globally that the ultra-rich may be using to evade tax with the confidentiality such facilities provide.

Singapore Freeport said Singapore Customs had asked the company to respond to The Economist’s claims, which it then strongly denied in a letter addressed to Customs. The company said the facility’s contracted service providers — or licensees — are placed under robust checks and balances, such as Singapore Customs’ TradeFIRST framework.

“The framework is based on a range of criteria covering inventory management and controls, compliance records and security measures,” a Customs spokesperson told TODAY.

“These licensees are reassessed every one, two or three years … We reserve the right to re-assess the companies any time within the licence validity period if required … and have the powers to enter all locations within the Freeport to conduct checks, investigation and controls.”