The Monetary Authority of Singapore (MAS) has fined Credit Suisse and United Overseas Bank (UOB) for breaching anti-money laundering (AML) requirements relating to the scandal-ridden Malaysian state fund 1Malaysia Development Berhad (1MDB).
Credit Suisse was ordered to pay S$0.7m (approx. $0.5m), while UOB was penalised S$0.9m (approx. $0.7m) for several breaches of AML requirements and control lapses. The fines were enforced after Mas completed a two-year review of banks involved in 1MDB-related transactions.
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MAS said in a statement that the breaches “include weaknesses in conducting due diligence on customers and inadequate scrutiny of customers’ transactions and activities”.
“MAS did not however detect pervasive control weaknesses within these banks,” it added.
Singapore’s central bank has also directed the lenders to appoint independent parties to assess and confirm that rectification measures have been effectively implemented, and instructed them to take disciplinary action against errant staff.
MAS has previously imposed several financial penalties and closures in connection with the 1MDB scandal. In October 2016, MAS fined UBS S$1.3m for AML violations and withdrew the merchant bank status of Falcon Private Bank, Singapore Branch, for serious failures in AML controls and improper conduct by senior management at the head office in Switzerland and Singapore. In the same month, MAS also fined DBS S$1m for AML breaches over their involvement in the 1MDB scandal.
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By GlobalDataIn May 2016, MAS ordered Swiss lender BSI Bank to close its Singapore operations, and in December 2016, Singapore’s central bank fined the Singapore branches of Standard Chartered Bank and Coutts S$5.2m and S$2.4m respectively for violation of AML requirements linked to the 1MDB.
Ravi Menon, MAS’ managing director, said: “The two-year long 1MDB-related review holds key lessons for both MAS and financial institutions in Singapore. MAS has enhanced its AML surveillance and taken unprecedented enforcement actions against errant institutions and individuals.
“Financial institutions have increased their risk awareness and strengthened their AML controls. Our financial industry is in a better position today than it was when the abuses stemming from the 1MDB-related flows took place. The price for keeping our financial centre clean as it grows in size and inter-connectedness is unstinting vigilance.”
* Image credit: macashop/Shutterstock
