Published by Finews Asia – 11th October 2016
Singapore’s financial regulator has penalised banks for doing business with Malaysian state fund 1MDB, which is at the center of a billion-dollar corruption and money-laundering investigation. UBS, the world’s largest private bank, is guilty of 13 violations.
The Swiss bank’s money-laundering breaches include deficiencies in taking on new accounts, weaknesses in corroborating the source of funds, inadequately scrutinizing customers’ transactions and activities, and failure to file suspicious transaction reports on time, the Monetary Authority of Singapore said in a statement.
UBS was found to have breached rules 13 times and has to pay a fine of S$1.3 million, or roughly 1 million Swiss francs.
This is a far milder outcome for the Swiss bank, whose largest shareholder is Singapore’s sovereign wealth fund, the GIC, than theforced closure one of its smaller Swiss rivals.
Weakness not “Pervasive”
Singapore’s largest bank, DBS, met with a similar fate: it only has to pay S$1 million for 10 breaches.
MAS said it didn’t find “pervasive” control weaknesses at either UBS or DBS, has admonished them, told them to investigate the lapses, address the deficiencies, and discipline errant staff.
Independent Monitor
The regulator is also requiring both to appoint an independent monitor to ensure that improvements have been made, and to report back to MAS.
The measure is similar to a U.S. regulatory move to install independent monitors in, for example, Credit Suisse after that bank’s guilty plea to helping wealthy Americans cheat on their taxes.
UBS was remorseful in a statement, saying it was “disappointed” that it didn’t do more to detect and report illicit 1MDB dealings sooner.
1MDB Profits Donated
“We are further strengthening our controls and appropriate action will be taken on individuals responsible for the lapses,” the bank said.
The bank said it would donate profits from the dealings towards establishing an anti-money laundering program run by an educational institute.
Measures against Standard Chartered, which was also among the banks named and shamed by MAS four months ago, are being finalized, and an investigation into Raffles Money Change has been referred to criminal authorities for further investigation, MAS said.
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