The Inland Revenue Authority of Singapore is checking whether taxpayers here named in the leaked Panama Papers have breached local tax laws, regulators said yesterday.

The move comes as the Monetary Authority of Singapore and the Ministry of Finance (MOF) outlined how agencies here are joining a global crackdown on the use of offshore firms for money laundering and tax evasion.

"The use of offshore vehicles, in and of itself, is not illegitimate. Being named in the Panama Papers is not itself evidence of wrongdoing or the basis for suspicion," said MAS and MOF in a joint reply.

Therefore, the approach taken by the authorities is to see if there is actual wrongdoing by any individual or entity, they said yesterday.

The Panama Papers contained details on more than 214,000 offshore vehicles and exposed the hidden wealth of top politicians in countries such as Russia and Ukraine.

The data leaked from Panamanian law firm Mossack Fonseca included records on thousands of Singapore-linked entities. According to the International Consortium of Investigative Journalists, there are more than 5,800 offshore entities and 6,000 individuals linked to Singapore.

MAS and the Accounting and Corporate Regulatory Authority (Acra) reminded banks and company service providers of their duty to review their customer relationships periodically and ascertain clients are using offshore vehicles for legitimate purposes. They are required to file reports of any suspicious transactions and step up monitoring.

MAS and Acra are also conducting checks to ensure that intermediaries under their supervision have complied with anti-money laundering obligations.

In addition, the Suspicious Transaction Reporting Office under the Commercial Affairs Department has reminded intermediaries that if they suspect a property is linked to criminal conduct, they must file a suspicious transaction report.

The crackdown on violations of anti-money laundering rules also led local regulators to shut Swiss private bank BSI's operations over its dealings with the scandal-hit fund 1Malaysia Development Berhad.

Meanwhile, regulators in Hong Kong have asked banks doing business there to disclose if they have dealings with those named in the Panama Papers, Reuters reported.

The leaked documents revealed that Hong Kong was the most active centre worldwide for creating shell firms. These firms have many legitimate purposes but can also be used to hide assets and avoid taxes.

According to the sources, the authorities in Hong Kong were trying to ascertain whether banks operating in the jurisdiction carried out due diligence and checked the source of funding when dealing with clients named in the Panama Papers.