The Monetary Authority of Singapore (MAS) has imposed a composition penalty of S$1m (£541,500, $746,500, €630,000) on the Singapore branch of Swiss private bank Bank J Safra Sarasin (BJS) due to its failures to comply with anti-money laundering and countering the financing of terrorism (AML/CFT) requirements.
When issuing the penalty, the watchdog took into consideration BJS’s remediation actions to address deficiencies that were identified by MAS.
Between March 2014 to September 2018, BJS committed serious breaches of MAS’ AML/CFT requirements. These breaches resulted from material lapses in BJS’s AML/CFT control processes during customer onboarding 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.
The bank failed to establish the source of wealth and source of funds of clients and beneficial owners of the clients who presented higher risks of money laundering and terrorism financing, the MAS said.
In many cases, BJS relied on the customers’ representations without obtaining information to corroborate them.
Scrutiny
The bank 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.
“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,” said Loo Siew Yee, assistant managing director for policy, payments and financial crime at MAS.
To cope with the problem, the regulator has required BJS to appoint an independent party to validate the effectiveness of the bank’s remediation measures and report the findings to MAS.
For more insight on asset and wealth management in Asia, please click on www.fundselectorasia.com
