Swiss private bank fined S$1m for breaching anti-money laundering, counter-terrorism financing rules

THE Singapore branch of Swiss private bank Bank J. Safra Sarasin (BJS) has been fined the maximum of S$1 million for failing to comply with requirements to prevent money laundering and terrorism financing.

In a statement on Wednesday, the Monetary Authority of Singapore (MAS) said BJS committed “serious breaches” of these requirements, due to “material lapses” in its control processes during customer on-boarding and the bank’s ongoing monitoring of business relations with customers.

In particular, it failed to establish the sources of wealth and funds of customers, and the beneficial owners of the customers, who were at higher risk of money laundering and terrorism financing. In many cases, BJS relied on these customers’ representations without obtaining further information to corroborate them.

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, said the MAS. These lapses placed BJS at higher risk of being used as a conduit for illicit activities, it added.

The J. Safra Sarasin Group is headquartered in Basel, Switzerland. Its Asia branches are located in Singapore and Hong Kong.

The MAS has directed BJS to appoint an independent party to validate the effectiveness of its remediation measures, and to report its findings to the authority.

In a statement sent to BT on Thursday, the bank’s spokesperson said no allegations exist that the Singapore branch was involved in actual money laundering activities.

The bank said the fine relates to “historical issues” regarding the proper documentation of client relationships and transactions under local anti-money laundering rules and related procedural issues.

“Compliance with all applicable laws, rules and regulations in the markets in which we operate is of the highest priority for Bank J. Safra Sarasin. Accordingly, as stated by MAS, the branch immediately took remediation actions to address the deficiencies that were identified.”

Loo Siew Yee, MAS’ assistant managing director for the Policy, Payments & Financial Crime Group, said: “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.”

She stressed that boards and senior management of financial institutions, in particular, should have strong oversight of controls to prevent money laundering and terrorism financing.

Banks can be fined up to S$1 million for each breach of requirements in relation to anti-money laundering and countering of terrorism financing, as stipulated under MAS’ Notice 626 to banks on the Prevention of Money Laundering and Countering the Financing of Terrorism.


By Kelly NG, April 15, 2021, published on Banking & Finance

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