UBS, UOB, Citi Among Singapore Banks Hit With S$27.45 Million Penalty

The Monetary Authority of Singapore (MAS) has fined nine financial institutions for their failure to comply with  Anti-Money Laundering (AML) laws.

Various factors have contributed to the imposition of a S$27.45 million penalty, including FIs’ relationship with persons of interest (POIs), serious violations of AML/CFT rules, and inadequate AML controls.

MAS also examined the employees of those institutions and found that some fell short of MAS’s Anti-Money Laundering (AML) and Counter-Financial Terrorism (CFT) requirements.

The following FIs have been heavily fined for lacking significant measures of AML compliance:

So far, the financial institutions have started fixing the problems found in the investigation. However, the Monetary Authority of Singapore (MAS) will keep a close watch to ensure they implement effective and lasting improvements.

During the investigation, the Monetary Authority of Singapore has identified the following AML/CFT Compliance shortcomings by FIs:

• One of the major inconsistencies that MAS found during the investigation is the customer risk assessment failure. Five financial institutions, including BJBS, BOIPL, Citi, CSSB, and UOBKH, lack strong AML systems in place to properly assess customers who are at high risk of being involved in money laundering.
• All nine FIs are failing to properly verify and investigate the source of wealth of high-risk customers. They ignore red flags in documents, do not even check claims, and accept customers without due diligence. It facilitates criminals to launder funds obtained from illicit means using financial institutions.
• Eight FIs, including BJBS, Citi, CSSB, LGTS, UOB, UOBKH, TTCSPL, and UBSS, have a poor transaction monitoring system. They fail to review suspicious fund transfers that do not match the customer’s profile and are unusual.

Read More:

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The MAS has taken serious action for those who have been facilitating financial institutions’ relationships with the POIs and who are under investigation for violating regulations.

It has issued prohibition orders (POs) ranging from three to six years for different individuals who failed to ensure adherence to policies.

Four senior managers of BOIPL, including Mr. Tsao, Ms. Wong Xuan Ling, Mr. Hsia, and Ms. Deng, are under a prohibition order as they failed to develop and enforce proper AML/CFT controls.

They do not manage red flags when they are aware of information that is found suspicious and fail to perform enhanced CDD for multiple POIs.

In addition to prohibition orders, MAS also issued reprimands to several senior managers from TTCSPL. They fail to ensure proper source-of-wealth verification and approve high-risk clients without due diligence.

Furthermore, MAS  has reprimanded two former UOB bankers, Mr. Ang Sze Hee and Mr Tan Sheng Rong, for poor due diligence and weak follow-up after suspicious activity reports involving persons of interest.

This recent MAS supervisory examination has urged financial institutions to strengthen AML controls by following its supervisory expectations and industry best practices, particularly in the area of source-of-wealth verification.