MAS Fines Swiss-Asia Financial Services S$2.5 Million For Breaking AML Laws

On 7 May 2024, the Monetary Authority of Singapore (MAS) charged S$2.5 million in a compositional fine to Swiss-Asia Financial Services Pte. Ltd. (SAFS) for being guilty of breaching the AML/CFT rules and regulations issued by the Monetary Authority of Singapore (MAS).

Besides that, MAS also highlighted the inadequacies of both, SAFS’ CEO, Mr Olivier Pascal Mivelaz, and its COO, Mr Steve Knabl, for their incapabilities in monitoring SAFS’ operations and ensuring its compliance with MAS’ AML/CFT policies.

Swiss-Asia Financial Services, the asset and fund management company, witnessed a rapid expansion in its business performance between September 2015 and October 2018. But, at this point, AML/CFT controls of the firm became too weak to keep up with the company’s growth, and it was established that they were not sufficient. Eventually, SAFS found itself in breach of MAS’ AML/CFT standards multiple times, which essentially rendered the firm vulnerable to financial crime.

SAFS’ AML Violations

Swiss-Asia Financial Services was penalized S$2.5 million (US$1.8 million) by the Monetary Authority of Singapore (MAS) for repeatedly failing to comply with regulations meant to prevent money laundering and the funding of terrorism says the statement. The following breaches were found during the MAS inspection:

1. The breaches at SAFS were ignoring some risk factors in its enterprise-wide risk assessment, not doing customer due diligence before initiating business contacts, and failing to investigate inconsistent third-party transactions in client accounts.
2. SAFS failed to investigate in-depth third-party transactions in consumers’ accounts, especially in cases where they conflicted with the company’s customer information.
3. Opposite to recommended standards, SAFS developed a business relationship with clients before finishing customer due diligence (CDD) procedures, says MAS.
4.  SAFS failed to highlight those customers who constituted higher risk for money laundering (ML) or terrorism financing (TF), despite revealing several red flags about them. As a consequence, inadequate attention was paid to AML efforts that included enhanced CDD methods for those customers.
5. SAFS did not make sufficient effort to identify the real sources of wealth and/or funds of the customers and their beneficial owners who were classified as high ML/TF risk levels. The main deficiency in SAFS is that the company failed to receive approval from its management bodies about engaging or communicating with problems business customers.
6. SAFS did not file any suspicious transaction reports concerning multiple customers, although they had indisputable reasons to do it. For example, SAFS knew about negative press informing about the wrongdoings of these clients.
7. SAFS failed to undergo an internal audit to evaluate the efficacy of its AML/CFT controls as well as its compliance with the AML regulatory obligations.

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Ms Loo Siew Yee the Assistant Managing Director (Policy, Payments & Financial Crime), MAS, underlines “Financial institutions must have robust AML/CFT controls, particularly when managing high net-worth individuals, to reduce ML/TF risks and make sure compliance and internal audits keep up with company expansion. The top management of financial entities is supposed to organize, control, and guarantee the effectiveness of AML/CFT measures relevant to their organizational development,” says MAS.

MAS warned the executives of SAFS: Mr Olivier Pascal Mivelaz, CEO, and Mr Steve Knabl, COO, regarding the breach of AML/CFT norms, including not following risk assessment and having poor regular internal audits, even though MAS has witnessed SAFS’s tremendous growth with higher business expansion for four years in a row.