SINGAPORE: The Monetary Authority of Singapore (MAS) has imposed a composition penalty of S$400,000 on TMF Trustees Singapore Limited (TTSL) for failing to comply with MAS' Anti-Money Laundering and Countering the Financing of Terrorism requirements.
Following an inspection by MAS, the firm was found to have failed to meet MAS' requirements for trust companies between June 2011 and April 2018.
The company did not verify the source of wealth of settlors of trust who presented higher risks of money laundering and terrorism financing, said MAS.
"Instead, TTSL had relied on the settlors’ representations regarding their source of wealth or bank reference letters, which only confirmed the banking relationship between the banks and the settlors, without obtaining information to adequately corroborate those claims," the authority added.
"TTSL also failed to monitor, on an ongoing basis, the transactions of trust-relevant parties.
"In particular, TTSL did not scrutinise such transactions to ensure that these were consistent with its knowledge of the trust-relevant parties' business and risk profile as well as the source of funds."
The company "did not exercise enough oversight" to ensure effective money laundering and terrorism financing controls and procedures, said MAS, adding that this placed the company "at risk of being used as a conduit" for money laundering and terrorism financing activities.
The company has paid the composition penalty in full and taken prompt remedial actions, the authority added.
It had identified and sought to address the root cause of the failures with the help of an independent consultant.
TTSL also took remedial measures to address the deficiencies identified by MAS and strengthened its governance and controls to prevent future lapses.
The company had also voluntarily refrained from accepting new trust customers for three months.
Ms Loo Siew Yee, MAS' assistant managing director for Policy, Payments and Financial Crime, said: "This case is a timely reminder to financial institutions involved in setting up these structures or dealing with customers who use such vehicles, to have in place robust controls to prevent them from being misused for money laundering and terrorism financing."