The Monetary Authority of Singapore (MAS) has fined the Singapore branches of Standard Chartered Bank (SCB) and Coutts for violation of anti-money laundering (AML) requirements linked to scandal-ridden Malaysian state fund 1Malaysia Development Berhad (1MDB).
SCB has been fined S$5.2m, while Coutts has been fined S$2.4m for these breaches.
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MAS found an overall 28 breaches at SCB following an inspection of 1MDB-related fund flows taking place through the bank between 2010 and 2013.
“The control lapses stemmed from inadequacies in policies and procedures, insufficient independent oversight of front office staff, and a lack of awareness of money laundering risks among some bank staff,” MAS said.
Despite finding the breaches, the central bank said that it did not find pervasive control weaknesses or wilful misconduct at SCB.
In case of Coutts, an overall 24 breaches of AML requirements in relation to customer due diligence measures for politically exposed persons (PEPs) were found.
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By GlobalData“The failure to exercise the necessary enhanced due diligence on these accounts was the result of actions or omissions of certain officers who have since left the bank. These officers include Mr Yak Yew Chee and Ms Yvonne Seah, who had left Coutts to join BSI Bank Limited in late 2009,” MAS said.
In addition, the central bank also plans to issue a prohibition order against former Goldman Sachs director Tim Leissner for making false statements on behalf of Goldman Sachs (Asia) without the bank’s knowledge.
Leissner was tasked with managing the relationship with 1MDB when Goldman Sachs was engaged by 1MDB to arrange three bond issuances from 2012 to 2013.
Several banks have been implicated in the 1MDB scandal in the recent times. In May 2016, BSI’s Singapore branch was ordered to cease operations owing to serious breaches of AML requirements, poor management oversight, and gross misconduct by some of its employees.
In July 2016, MAS revealed that it found lapses in AML controls in DBS, Standard Chartered and UBS after an investigation into 1MDB. In October 2016, the regulator withdrew the licence of Falcon Private Bank and imposed fines on DBS and UBS in relation to the scandal.
MAS managing director Ravi Menon said: “MAS has taken tough regulatory actions against various financial institutions this year for AML control lapses. These actions send a strong signal that we will not tolerate the abuse of Singapore’s financial system for illicit purposes.
“The supervisory investigations into the intricate web of international fund flows have been a learning experience for financial institutions as well as for MAS. Our financial sector will emerge cleaner and stronger from the lessons learnt.”
