Monetary Authority of Singapore (MAS) Fines Four Financial Institutions for Breaching AML Laws

A fine of S$3.8 million (Singapore dollar) was handed down by the Monetary Authority of Singapore (MAS) to the Singaporean lender DBS and others for violating anti-terrorism financing and money laundering rules.

A collective fine of S$3.8 million has been imposed on DBS, Citibank Singapore, OCBC, and Swiss Life Singapore for their involvement in extensive financial fraud, involving German-registered payment company Wirecard.

Based on information released regarding irregularities in Wirecard AG’s financial statements, as well as allegations made against Singapore-based individuals and entities, four financial institutions were found to have inadequate controls in place.

According to the report, several breaches occurred, including the failure to investigate the background and purpose of transactions, the failure to maintain relevant and updated information about beneficial ownership for customers, the inability to adequately identify the beneficial owners of higher-risk customers as well as the failure to determine the source of wealth for those customers adequately.

According to the report, the regulator stated: “Although the breaches were serious, MAS did not find wilful misconduct by any staff of these financial institutions.” The largest fine of S$ 2.6 million was imposed on DBS relating to accounts maintained by 11 corporate customers from July 2015 to February 2020. During the period from June 2015 to January 2016, one of OCBC’s corporate customers had its account breached and was fined S$600,000.

For breaches involving two corporate customers’ accounts between September 2019 and June 2020, Citibank was fined S$400,000, whereas Swiss Life received a S$200,000 fine for breaching investments-linked life insurance policies that it underwrote between May 2017 and May 2018.

In response to the MAS’ findings, the financial institutions have undertaken “prompt remedial measures” to resolve the issues identified. They have improved their procedures as well as trained their staff to detect and escalate risk concerns. The sentence follows the incarceration of two former Wirecard Asia employees on June 20th  for aiding their superiors in embezzling funds from the company’s subsidiary.

Edo Kurniawan, an Indonesian vice-president of Wirecard Asia’s controlling international finance, is suspected of orchestrating the scheme but escaped arrest before he could be apprehended in Singapore. A red notice has been issued against him by Interpol.

In 2020, Germany’s tech industry was captivated by payments firm Wirecard’s spectacular collapse after it acknowledged that billions of assets listed on its books were unreal. It is still an ongoing investigation of those involved in the accounting scandal, which shocked the world.

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