MAS penalises Singaporean bank branch S$1m for fraud, terrorism failures

The Monetary Authority of Singapore (MAS) has imposed a penalty of S$1m on a Singapore-based bank branch for not complying with its anti-money laundering and terrorism financing acts.

Safra Sarasin’s Singapore (BJS) branch was found to not have complied with its Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) requirements. The penalty amount of S$1m took into consideration the bank’s remediation actions to address the problems found.

According to MAS, BJS was found to have committed ‘serious breaches’ of the organisation’s AML/CFT requirements between March 2014 and September 2018. These breaches were identified to have resulted from material lapses in the bank’s AML/CFT control processes during customer onboarding and in the ongoing monitoring of business relations with customers. The latter point, MAS highlighted, placed BJS at a higher risk of being used as a ‘conduit for illicit activities’.

BJS failed to define the source of wealth and source of funds of customers and beneficial owners of the customers who offered higher risks of money laundering and terrorism financing.

The bank was also found to have failed in adequately inquiring into the background and purpose of unusually large or unusual patterns of customer transactions that had no clear economic purpose.

The monetary authority has now required BJS to appoint an independent party to validate the effectiveness of the bank’s remediation measures and report back the finds to MAS.

MAS assistant managing director Loo Siew Yee said, “Financial institutions engaging in private banking business must be vigilant in guarding against the risk of dealing with illicit wealth.

“Given the potential complexity of private bank clients’ profiles, it is particularly important that clients’ representations regarding their source of wealth and funds are scrutinised and corroborated by objective evidence. Boards and senior management of financial institutions must exercise strong oversight of the execution of key AML/CFT controls.”

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