Singapore branch of Bank J. Safra Sarasin fined SGD1m for breaching anti-money laundering, counter-terrorism financing rules
Swiss private bank Bank J. Safra Sarasin's Singapore branch has been fined the maximum of SGD1 million for failing to comply with requirements to prevent money laundering and terrorism financing.
The Singapore Business Times reports that the Monetary Authority of Singapore (MAS) said Bank J. Safra Sarasin (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 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.
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.
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