Singapore, which for years promoted itself as a bastion of bank secrecy, is now pushing to portray an image of transparency after U.S. moves to clamp down on tax evasion.

Asia’s Switzerland for offshore investors is asking Washington to launch talks on a double-taxation agreement. A deal would be seen as a U.S. good-housekeeping seal of approval and could encourage more American businesses to locate here.

“Singapore would be happy to sign a DTA with the U.S. and has approached the U.S. Treasury Department to explore such a possibility,” said a Finance Ministry spokesperson.

This follows the swift move by Singapore, which is estimated to manage at least US$300 billion in foreign cash, late last year to get off an Organization for Economic Cooperation and Development “gray list” of countries that shield information on foreign bank accounts.

The city-state renegotiated double-taxation agreements with a number of countries by changing its laws to remove impediments to the exchange of tax information–and show that it was on board with the global push to close tax havens and shut down money-laundering.

“Singapore is a trusted business and financial hub, with a strong rule of law,” the spokesperson said. “We do not stand for abuse of our laws to shelter financial criminals and their ill-gotten proceeds, and our laws allow us to assist in such investigations.”

This new emphasis on openness marks a sea change.

Previously, Singapore officials described bank confidentiality as a matter of national interest, saying their refusal to investigate sources of income not generated here was part of the tiny country’s success in becoming a major financial center.

The backdrop to the change is U.S. legislation signed by President Barack Obama early this year requiring foreign banks, trusts and corporations to provide information about their U.S. clients. The Treasury Department then began investigating and prosecuting U.S. clients of Swiss banking giant UBS.

Those involved allegedly transferred assets to UBS accounts in Switzerland in the name of shell companies mainly in Hong Kong. Also implicated were Singapore, the Virgin Islands, Panama, Mexico, Cayman Islands and Liechtenstein.

“There’s been a move towards transparency globally in the past couple of years,” said Edmund Leow, a senior tax lawyer and principal with Baker & McKenzie.Wong & Leow in Singapore. “Singapore, being a major financial center, must protect its reputation and will do anything so that it doesn’t end up on any kind of blacklist.”

After getting off the OECD gray list, Singapore wants to avoid “any such issues with the U.S.,” Leow said. “A DTA will help on this front and will also help Singapore remain competitive as the U.S. already has such agreements with big Asian economies like Japan, Korea and China.”

“The Singapore corporate sector is also pushing for a DTA as more Singapore companies expand to the U.S.,” he said.

Singapore is the Asia base of operations of operations for some 1,500 U.S. companies, the U.S. Embassy says. But a Treasury official said that although Washington is interested in a tax deal with Singapore, it’s not “a big priority. There are other countries where DTAs must be signed first because we see more benefits.”

Among other things, the official said, “On average it doesn’t appear that there will be any immediate benefit to U.S. companies” because taxes for foreign firms here are already very low.

Singapore officially levies taxes interest income and royalties for foreign firms at 10%-15%, but the Internal Revenue Service reckons that in practice U.S. firms pay just 1%-4%.

On the other hand, the U.S. official said, “Singapore companies in the States would benefit because the effective tax rate is higher.”

Singapore’s shift toward more transparency entails little risk of funds leaving the city-state.

Most of the tax agreements it renegotiated last year were with Western countries, while most of the money parked in Singapore belongs to wealthy Indonesians, Malaysians, Chinese and other Asians, private bankers say.

“Some of the people with money here are very influential in their home countries,” said a Western diplomat. “Even with DTAs in place, it’s highly unlikely that Singapore’s neighbors will push hard for checks on where the money of their citizens in Singapore came from.”

To be sure, private banks in Singapore must ask their clients where the money that they want to deposit came from. But tax lawyer Leow said, “I guess if the client comes up with a good story that it came from legitimate businesses or the bank has no reason to suspect something wrong, they will take the money.”

An attempt by Indonesia a few years ago to seek the extradition of a number of its citizens suspected of moving illegal funds here failed.

While the Singapore government agreed in principle to grant the request, it asked in return that Indonesia allow it to use its territory for military exercises. Both countries’ parliaments rejected the deal.