The Monetary Authority of Singapore (MAS) is investigating whether the banks involved in a S$2.4 billion money laundering scandal had taken all reasonable steps to mitigate risks, a spokesperson said on Tuesday. The MAS will take action if its findings reveal shortcomings in the banks’ controls, the spokesperson added.
Singapore police last month arrested and charged 10 foreigners, including from China, in one of the biggest anti-money laundering swoops in the global wealth hub. Assets worth S$2.4 billion were seized, including luxury real estate, cryptocurrencies and cars.
The scandal has raised questions on whether the banks are strictly following the city-state’s stringent anti-money laundering rules, which require them to conduct enhanced due diligence on customers, verify their source of wealth and funds, and report any suspicious transactions.
Wealth management sector remains a key area of supervisory focus for MAS
Singapore has benefited from huge asset inflows in the last few years, with wealthy individuals in Asia and elsewhere setting up family and trust offices to take advantage of incentives offered to such setups. The number of single-family offices, which handle investments, taxation, wealth transfer and other financial matters for the super-rich, had surged to 1,100 at the end of 2022 from 400 at the end of 2020, MAS data showed.
The latest figures from the MAS also showed that total assets under management in Singapore rose 16 per cent to S$5.4 trillion in 2021, compared with a global increase of 12 per cent to US$112 trillion for the same year.
“The wealth management sector remains a key area of supervisory focus for MAS and we have conducted thematic inspections, focusing on enhanced due diligence measures, including corroboration of source of wealth and source of funds,” the MAS said in Tuesday’s statement.
MAS too early to tell if all banks adhered to anti-money laundering requirements
The MAS said it was too early to tell if all the financial institutions involved in the scandal had adhered to its stringent requirements on anti-money laundering and countering the financing of terrorism. The central bank did not name the banks under investigation, but said they included both local and foreign ones.
The MAS has previously taken action against banks for lapses in their anti-money laundering controls, such as imposing fines, issuing warnings, or restricting their operations. In 2016, the MAS shut down the local units of two Swiss private banks, BSI and Falcon Bank, for their roles in the 1MDB scandal that involved billions of dollars siphoned from a Malaysian state fund.
The MAS also said it was working closely with other regulators and law enforcement agencies in Singapore and abroad to combat money laundering and terrorism financing activities.
