S$1 million penalty for Singapore branch of Swiss bank for breaching anti-money laundering requirements
SINGAPORE: The Monetary Authority of Singapore (MAS) has imposed a composition penalty of S$1 million on Bank J Safra Sarasin Ltd, Singapore Branch (BJS) for failing to comply with MAS' Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) requirements.
Between March 2014 and September 2018, the bank was found to have committed serious breaches of MAS' requirements, the authority said in a news release on Wednesday (Apr 14).
"These breaches resulted from material lapses in BJS’s AML/CFT control processes during customer on-boarding and in the ongoing monitoring of business relations with customers, which had placed BJS at higher risk of being used as a conduit for illicit activities," MAS said.
In particular, the firm "failed to establish ... the source of wealth and source of funds of customers and beneficial owners of the customers who presented higher risks of money laundering and terrorism financing".
In many cases, MAS added, BJS did not further corroborate what the customers told the bank.
"BJS also failed to adequately inquire into the background and purpose of unusually large or unusual patterns of customer transactions that had no obvious economic purpose."
According to its website, the private bank provides "in-house, value-added trust, estate and succession planning advice to clients in Asia and globally".
The authority has required BJS to appoint an independent party to validate the effectiveness of the bank’s remediation measures and report the findings to MAS.
Ms Loo Siew Yee, MAS' assistant managing director for Policy, Payments and Financial Crime, said: “Financial institutions engaging in private banking business must be vigilant in guarding against the risk of dealing with illicit wealth. Given the potential complexity of private bank clients’ profiles, it is particularly important that clients’ representations regarding their source of wealth and funds are scrutinised and corroborated by objective evidence.
"Boards and senior management of financial institutions must exercise strong oversight of the execution of key AML/CFT controls."
In a statement on Thursday, the bank said "no allegations exist that the Singapore branch was involved in actual money laundering activities".
The fine was related to "historical issues" from 2014 to 2018 involving proper documentation of client relationships and transactions under local anti-money laundering rules and related procedural issues, it added.
"Compliance with all applicable laws, rules and regulations in the markets in which we operate is of the highest priority for Bank J. Safra Sarasin," the bank said.
"Accordingly, as stated by MAS, the Branch immediately took remediation actions to address the deficiencies that were identified."