Singapore

MAS fines 3 banks

Action taken against Falcon Bank, DBS and UBS over 1MDB-related fund flows through these banks

The Monetary Authority of Singapore (MAS) announced yesterday it was withdrawing the merchant bank status of Falcon Private Bank, Singapore Branch (Falcon Bank), for serious failures in anti-money laundering (AML) controls.

There was also alleged improper conduct committed by senior management at the head office in Switzerland and at the Singapore branch.

MAS said Falcon Bank's Singapore branch manager, Mr Jens Sturzenegger, was arrested by the Commercial Affairs Department (CAD) on Oct 5.

Falcon Bank is the second financial institution, after BSI Singapore, to be forced to cease operations here in the Republic's 1MDB probe.

Before BSI, the last time MAS shut down a financial institution was in 1984, when it ordered the closure of Jardine Fleming (Singapore) for serious lapses in its advisory work.

PENALTIES

MAS is also imposing financial penalties amounting to $1 million on DBS for 10 breaches and $1.3 million on UBS for 13 breaches of MAS Notice 626 - Prevention of Money Laundering and Countering the Financing of Terrorism.

The two banks must also appoint an independent party to confirm that rectification measures have been effectively implemented and report their findings to MAS.

Singapore's central bank said the actions on the three banks follow supervisory examinations into 1MDB-related fund flows that took place through these banks from March 2013 to May 2015.

MAS' actions also come a day after two more former bankers at BSI Singapore were charged in court with 1MDB-related offences.

MAS managing director Ravi Menon said yesterday that the board and senior management of each financial institution play a pivotal role in keeping Singapore a clean and trusted financial centre.

He said: "They must put in place robust mechanisms to detect suspicious activities, promote strong risk awareness among their staff, and empower their compliance and risk management people.

"Most of all, they must set the tone from the top - that profits do not come before right conduct."

MAS said it has imposed on Falcon Bank financial penalties amounting to $4.3 million for 14 breaches of MAS Notice 1014 - Prevention of Money Laundering and Countering the Financing of Terrorism.

DBS Bank said yesterday it will be taking appropriate action against staff accountable for 1MDB-related lapses, including senior executives.

DBS added it should have taken more rigorous action with respect to the questionable activity, even if it was intentionally designed to conceal another purpose.

The bank also said it will be donating profits attributable to their shortcomings to a worthy cause.

A spokesman for UBS' Singapore branch said yesterday they were disappointed they did not do more to detect and report this earlier and were determined not to be used as a platform for financial crime.

UBS said it would also donate all profits from this account to the setting up of an industry-wide anti-money laundering programme.

This will be run by an independent educational body to help combat financial crime and reinforce Singapore's status as a financial centre which adheres to the highest standards, said UBS. - The Straits Times

Monetary Authority of Singaporeterrorism1MDB