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Singapore has hit banks and wealth managers including UBS, Citi and Julius Baer with its second-largest collective penalty ever in relation to a money-laundering case that dented the city-state’s clean reputation and cast a pall over its wealth management sector.
Nine financial institutions received a collective penalty of S$27.45mn (US$21.5mn), the largest figure since penalties in the 1MDB case, over what Singapore’s regulator called “poor and inconsistent implementation” of controls in a US$2bn money-laundering scandal.
The case, which was linked to online gambling in Asia, led to the convictions of 10 Chinese nationals and island-wide seizures of assets including gold bars and luxury cars.
It cast a shadow over Singapore’s ambitions to be a leading wealth management hub and underscored the challenge of opening up to foreign wealth while enforcing strict anti-money laundering rules.
“Like other major international financial centres, Singapore is exposed to money-laundering risks,” said Ho Hern Shin, deputy managing director for financial supervision at the Monetary Authority of Singapore.
“MAS will work closely with financial institutions to promote more consistent implementation of [anti-money laundering] measures. Where there are serious failings by FIs and their employees, MAS will not hesitate to take firm action.”
In its report, the regulator said it found “deficiencies” in how financial institutions carried out money-laundering risk assessments for new clients, how they corroborated clients’ source of wealth and how they handled transactions flagged as “suspicious” by their own systems.
Credit Suisse, which has since been acquired by UBS, received the biggest single penalty, at S$5.8mn. UBS was hit with S$3mn and Citi with S$2.6mn.
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The regulator also named executives and relationship managers at United Overseas Bank and smaller institutions for issues including a failure to establish their customers’ source of wealth.
United Overseas Bank said it “acknowledge[d] and accept[ed] MAS’ findings with regard to the identified areas for improvement”.
“Over the past two years, we have implemented prompt remedial actions to address the deficiencies identified after a comprehensive internal review, including stepping up on our transaction monitoring and customer due diligence processes,” it said.
Blue Ocean Invest, an asset manager, said it “acknowledges the findings” and had “implemented measures to enhance internal policies and procedures”.
“We co-operated fully with the MAS throughout the inspection, and a detailed remediation plan to address the breaches has been implemented,” said a spokesperson for Trident Trust.
LGT, Julius Baer and UBS said they also acknowledged the regulator’s findings and had co-operated fully with authorities during their investigation.
A spokesperson for Citi Singapore said the bank “strengthened our client onboarding and monitoring processes and continue to work closely with the authorities to protect the integrity of the financial system and enhance financial crime risk and controls measures”.
Data visualisation by Haohsiang Ko