21-6-2023 (SINGAPORE) The Monetary Authority of Singapore (MAS) has imposed fines totaling S$3.8 million (US$2.83 million) on DBS, OCBC, Citibank, and Swiss Life for violating anti-money laundering and countering terrorism financing regulations. The breaches were discovered during MAS’s examination of financial institutions following irregularities in Wirecard AG’s financial statements and the alleged involvement of individuals and entities based in Singapore.
MAS found that the financial institutions had insufficient controls in place when dealing with individuals involved in transactions with, or linked to, Wirecard AG and its related parties. The penalties imposed by MAS include S$2.6 million for DBS, S$600,000 for OCBC, S$400,000 for Citibank, and S$200,000 for Swiss Life. All four institutions have accepted the fines.
MAS clarified that while the breaches were serious, there was no evidence of wilful misconduct by the staff of these financial institutions. The Wirecard scandal erupted three years ago when the company’s auditor was unable to verify €1.9 billion (US$2.07 billion) reportedly held abroad and refused to sign off on the 2019 accounts.
DBS was fined S$2.6 million for breaches that occurred between July 2015 and February 2020. MAS found that DBS failed to maintain up-to-date customer due diligence information, neglected to update customers’ money laundering and terrorism financing risk ratings, and did not perform timely enhanced due diligence measures. The bank also did not adequately establish the source of wealth for high-risk customers and their beneficial owners.
OCBC was fined S$600,000 for breaches between June 2015 and January 2016. MAS discovered that the bank failed to investigate the background and purpose of transactions that were inconsistent with its knowledge of the customer and exhibited unusual patterns without apparent economic purposes. Additionally, OCBC did not adequately scrutinize the ownership and control structure when the declared beneficial owner did not match the party named in the customer’s corporate registration documents.
Citibank received a fine of S$400,000 for breaches between September 2019 and June 2020. MAS found that the bank failed to understand the control structure of certain customers and did not accurately identify their beneficial owners, despite having information suggesting inaccuracies. Citibank also neglected to inquire into unusually large transactions that exceeded a customer’s previous transaction amounts and lacked apparent economic purposes, including an outflow to a party allegedly involved in fraud.
Swiss Life (Singapore) was fined S$200,000 for breaches in May 2017 related to an investment-linked life insurance policy it underwrote. MAS found that the insurer failed to adequately comprehend the complex ownership and control structure of a higher-risk customer and did not sufficiently corroborate the source of the customer’s beneficial owner’s wealth.
MAS stated that the financial institutions have taken prompt remedial actions to address the identified deficiencies. These actions include enhancing procedures and processes, as well as providing training to improve staff’s ability to detect and escalate risk concerns.
Ms. Ho Hern Shin, Deputy Managing Director of Financial Supervision at MAS, emphasized the need for financial institutions in Singapore to strengthen controls against illicit financial flows. She urged institutions to implement robust measures to know their customers, monitor transactions for consistency, and exercise greater vigilance when customers employ complex structures.
MAS also announced that, after completing its investigation, no further action would be taken against Citadelle Corporate Services for suspected breaches of the Trust Companies Act. The investigation did not reveal any violations committed by Citadelle.
