Credit Suisse, UOB, UBS, Citi among 9 financial institutions penalised S$27.5 million for roles in S$3b money laundering case
The penalties relate to the S$3 billion money laundering case from August 2023, and marks the conclusion of MAS' enforcement against FIs with material nexus to the case, the central bank and financial regulatory authority said on Friday (Jul 4).
UOB is the only local bank on the list, receiving the second-highest composition penalty at S$5.6 million.
Other banks on the list are the Singapore arms of Credit Suisse, UBS, Citi, Julius Baer and LGT Bank.
MAS has penalised UOB Kay Hian (UOBKH), Blue Ocean Invest and Trident Trust Company in Singapore as well.
The penalty on Credit Suisse – the highest on the list at S$5.8 million – also accounts for breaches of anti-money laundering and countering the financing of terrorism (AML/CFT) requirements from November 2017 to October 2023, relating to accounts it maintained for certain US customers.
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MAS' composition penalties took into account various factors, including the extent of the FIs' exposure to the persons of interest in the case, the number of breaches to AML/CFT requirements, and the degree of weakness in the FI's AML/CFT controls.
MAS said that most of the FIs had established AML/CFT policies and controls, with the breaches arising out of 'poor or inconsistent implementation'.
Julius Baer, Citi, Credit Suisse, Blue Ocean Invest and UOBKH failed to implement adequate policies or processes for the rating of money-laundering risks presented by some of its customers, resulting in misratings.
All nine FIs did not detect or adequately follow up on significant discrepancies or red flags noted in information or documents that should have cast doubt on some customers' purported source of wealth.
In some cases, there was no corroboration of significant aspects of their source of wealth, MAS said.
All the FIs, except Blue Ocean Invest, failed to adequately review relevant transactions flagged as suspicious by their own systems.
UOB and UOBKH also failed to take adequate and timely risk mitigation measures on the customers on which they had filed suspicious transaction reports.
For specific individuals, MAS issued prohibition orders – ranging from three to six years – to four individuals from Blue Ocean Invest.
Tsao Chung-Yi, chief executive and executive director
Wong Xuan Ling, chief operating officer
Henry Hsia, executive director and relationship manager
Deng Xixi, former relationship manager
MAS also issued reprimands to individuals from Trident Trust and UOB for lapses.
Sean Andrew Coughlan, managing director, executive director and resident manager, Trident Trust
Tan Ho Kiat, chief operating officer, executive director and head of compliance, Trident Trust
Kek Yen Leng, executive director, head of trust administration and resident manager, Trident Trust
Alvin Ang, former team head of group retail privilege banking, UOB
Leonard Tan, former team head of group retail privilege banking, UOB
Another nine relationship managers and supervisors were privately reprimanded for more limited lapses.
MAS said that it had reviewed the conduct of a larger number of employees of the FIs connected to the case, but did not find evidence of significant lapses by most of them. However, it said that it may take action against a few remaining individuals after the ongoing court proceedings or investigations havae concluded.
MAS added that the FIs have embarked on remediation of the deficiencies, and it will monitor their progress.
Affected banks, including UOB, Citi, UBS and Julius Baer, said that they acknowledge the penalties and have taken steps to improve their AML controls, in response to queries from The Business Times.
In 2017, the authority took action against several financial institutions for their involvement in the 1MDB scandal.
Two banks, BSI Bank and Falcon Bank, were shut down, and total financial penalties of S$29.1 million were imposed on eight banks for various breaches of AML requirements. The banks included DBS, UOB, UBS, Standard Chartered and Credit Suisse.
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