In Money Laundering Probe Of Malaysian Development Fund, Singapore Slaps Fines On Credit Suisse And UOB

For breaches relating to the scandal-hit Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB), Singapore’s central bank has fined Credit Suisse and United Overseas Bank (UOB), it said in a statement on Tuesday.

A 700,000 Singapore dollars ($505,000) fine on Credit Suisse and a 900,000 Singapore dollars ($649,000) penalty on UOB have been imposed by the Monetary Authority of Singapore (MAS). Several anti-money laundering requirements were found to have been breached by the two banks.

“These include weaknesses in conducting due diligence on customers and inadequate scrutiny of customers’ transactions and activities. MAS did not however detect pervasive control weaknesses within these banks,” the central bank said.

They acknowledged the findings by the central bank, Credit Suisse and UOB said in statements to the media following MAS’ latest announcement. They have worked to strengthen their anti-money laundering controls, both banks said.

“Notwithstanding that the Monetary Authority of Singapore (MAS) review findings show there are no pervasive anti-money laundering control weaknesses, we acknowledge the outcome of the review and regret that we have fallen short of the MAS’ and our own high standards,” a Credit Suisse spokesperson said.

To raise risk and control awareness among the bank’s staff, it will also enhance its training program, UOB said.

A former Singapore branch manager of Falcon Private Bank, Jens Fred Sturzenegger, and two ex-employees of BSI Bank, Yak Yew Chee and Seah Mei Ying, are facing lifetime Prohibition Orders by the MAS in addition to financial penalties imposed on the banks.

Managing any capital markets services or financial advisory firm in Singapore and any capital markets or financial advisory services in Singapore would be prohibited for them under the Prohibition Orders, effective from May 29, 2017.

Against three others for their involvement in 1MDB-related activities, it intends to issue Prohibition Orders ranging from three to six years, the central bank also said.

In the 1MDB-related fund flows — the most extensive investigation the central bank has ever taken, MAS said it has completed the two-year long review of financial institutions involved in the fund.

“The review uncovered a complex web of transactions involving numerous shell companies and individuals operating in multiple jurisdictions, including the United States, Switzerland, Hong Kong, Luxembourg and Malaysia,” it said.

anti-money laundering breaches relating to 1MDB have been looked into by authorities around the world, including the United States, Switzerland and Singapore.

Nearly $700 million had flowed from the debt-ridden fund to Malaysian Prime Minister Najib Razak’s personal bank account, the Wall Street Journal had reported in 2013 which raised questions about movement of funds from 1MDB and it came into widespread attention.

Najib has said that the funds were a private donation from a Middle Eastern country he declined to name under pressure from the outcry caused by the report but he has repeatedly denied wrongdoing. He has denied benefiting personally from the funds.

Saudi Arabia’s royal family gave Najib a $681 million gift, of which about $600 million was later returned, Malaysian Attorney General Mohamed Apandi Ali later said. No criminal offense had been committed, Apandi said.

(Adapted from CNBC)

Categories: Economy & Finance, Regulations & Legal, Uncategorized

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