Billion-dollar money laundering case: MAS slaps 9 financial institutions with S$27.45 million in penalties
LAPSES FOUND IN FINANCIAL INSTITUTIONS
MAS said that it found shortcomings in four areas.
First, lapses in customer risk assessment were found in Bank Julius Baer, Blue Ocean Invest, Citibank, Credit Suisse and UOB Kay Hian.
These institutions failed to implement adequate policies or processes for rating money laundering risks presented by some of their customers.
This led to mis-rating of the risks and affected the institutions’ ability to address higher money laundering risks presented by several persons of interest, said MAS.
Second, all nine institutions fell short in establishing and corroborating the source of wealth of customers who posed a higher risk of money laundering.
They did not detect or adequately follow up on “significant discrepancies or red flags” that should have cast doubt on customers’ purported source of wealth, said MAS.
In some cases, there was no corroboration of significant aspects of the source of wealth, added the regulator.
Third, except for Blue Ocean Invest, there were failures in transaction monitoring in eight financial institutions, which failed to adequately review relevant transactions flagged as suspicious by their own systems.
“The relevant transactions were unusually large, inconsistent with the customers’ profiles, or showed unusual patterns,” said MAS.
Fourth, UOB and UOB Kay Hian fell short in following up on suspicious transaction reports filed against their customers.
The institutions failed to take adequate and timely risk mitigation measures, such as enhanced monitoring and reviewing the customers’ risk classification.
CNA has contacted the penalised financial institutions for comment.
A UBS spokesperson said: “We acknowledge MAS’ findings. We have cooperated fully with the authorities to resolve this issue and will continue to work together closely to safeguard Singapore’s financial industry.”
The spokesperson was responding to queries on both Credit Suisse and UBS.
A UOB spokesperson said the bank accepted MAS’ findings and has stepped up its transaction monitoring and customer due diligence processes over the past two years, after a comprehensive internal review.
UOB said it also made significant investments in technology and other resources to enhance internal risk management standards and capabilities, and continued to enhance employee training.
“We have conducted a thorough assessment of the facts and circumstances surrounding the issues and staff involved, and taken appropriate actions to address accountability and discipline,” said the spokesperson.
Credit Suisse, UBS and UOB were also penalised in the 1MDB case.
Asked why such breaches continued after it was taken to task for 1MDB, the UOB spokesperson said the bank has strengthened its operational effectiveness to ensure its anti-money laundering frameworks and controls are “consistently and rigorously applied”.
A Citi Singapore spokesperson said the bank has strengthened its client onboarding and monitoring processes, and was committed to the highest standard of governance and controls to prevent money laundering.
Julius Baer said it has taken concrete steps to strengthen its processes and anti-money laundering framework, and remained “firmly committed to upholding the high standards of the Singapore financial centre”.
Blue Ocean Invest said it acknowledged MAS’ findings, has fully cooperated with authorities during the investigation, and has implemented measures to enhance internal policies and procedures.
A Trident Trust spokesperson said it cooperated fully with MAS throughout the inspection and has implemented a detailed remediation plan to address the breaches.
A spokesperson for LGT Bank acknowledged MAS’ findings and said the bank remained strongly committed to the fight against money laundering and safeguarding the integrity of Singapore’s financial system.
