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AML KYC Case Study MAS 2023

This document discusses 6 cases in Singapore where financial institutions received penalties for lapses in their anti-money laundering (AML) controls and procedures. The largest penalty was against Falcon Private Bank, which had its merchant bank status withdrawn and was fined $4.3 million for 14 violations of AML regulations. Other cases involved penalties of up to $1.1 million against banks and asset management firms for failures to implement adequate AML policies and procedures, conduct proper customer due diligence, and detect suspicious transactions. The conclusion emphasizes the importance of robust KYC/AML controls and using business information services to help detect irregularities and comply with regulations.

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Amit Rajoria
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293 views3 pages

AML KYC Case Study MAS 2023

This document discusses 6 cases in Singapore where financial institutions received penalties for lapses in their anti-money laundering (AML) controls and procedures. The largest penalty was against Falcon Private Bank, which had its merchant bank status withdrawn and was fined $4.3 million for 14 violations of AML regulations. Other cases involved penalties of up to $1.1 million against banks and asset management firms for failures to implement adequate AML policies and procedures, conduct proper customer due diligence, and detect suspicious transactions. The conclusion emphasizes the importance of robust KYC/AML controls and using business information services to help detect irregularities and comply with regulations.

Uploaded by

Amit Rajoria
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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KYC/AML Case Studies: 6 Cases of

Lapses and Penalties in Singapore

Anti-money laundering policies and procedures exist to help financial institutions


combat money laundering by preventing criminals from engaging in transactions that
are carefully disguised which are connected to illegal activities.

While it is easy for us to keep emphasising the importance


of KYC and AML processes, you may not realise how much it may cost your company
if done incorrectly or neglected--not just because of the potential for loss of money
and reputation, but the certainty of official sanction and punishment if you violate
KYC/AML requirements in regulated industries such as finance.

To understand how important it is to ensure your KYC and AML procedures are up to


date, let's look at a few cases in recent years, and their outcomes.

1. Falcon Private Bank


One of the most infamous cases in the industry to date, with some of the heaviest
punishments meted out, is that of Falcon Private Bank. On October 11, 2016, the
Monetary Authority of Singapore (MAS) announced that it was withdrawing the
merchant bank status of Falcon Private Bank Ltd, Singapore branch, forcing it to shut
down. This was due to the bank's serious failures in anti-money laundering (AML)
controls and improper conduct by its senior management at the head office in the
Switzerland and Singapore branch, which permitted it to be used for money
laundering by parties in Malaysia's 1MDB embezzlement scandal.

In addition, Falcon Private Bank was also fined S$4.3 million for 14 breaches of MAS
Notice 1014, which is the prevention of money laundering and countering the
financing of terrorism. Such failures include but are not limited to adequately assess
irregularities in activities pertaining to customer accounts, and file suspicious
transaction reports.

2. Bank J Safra Sarasin


On 14 April 2021, the Monetary Authority of Singapore (MAS) imposed a
composition penalty of S$1 million on Bank J Safra Sarasin Ltd (Singapore branch) for
its failure to comply with MAS' Anti-Money Laundering and Countering the Financing
of Terrorism requirements.

Bank J Safra was found to have committed serious breaches of MAS' AML
requirements between March 2014 and September 2018. These breaches had caused
material lapses in the bank's AML control procedures during the onboarding of
customers and in the ongoing monitoring of business relations with customers. This
had placed the bank at higher risk of being used as a conduit for illegal activities.

3. Apical Asset Management Pte Ltd


On 28 July 2020, the Capital Markets Services (CMS) licence of Apical Asset
Management was revoked by the Monetary Authority of Singapore (MAS). The CEO
and Director were also reprimanded by MAS. There were several deficiencies in the
AML controls from 2013 to 2018. Apical Asset Management did not put in place
basic AML policies and procedures which exposed them to the risk of laundering for
illegal activities.

4. Asiaciti Trust Singapore Pte Ltd


On 22 July 2020, the Monetary Authority of Singapore (MAS) imposed a composition
penalty of $1.1 million on Asiaciti Trust Singapore. This is due to their failure to
comply with the MAS' Anti-Money Laundering and Countering the Financing of
Terrorism requirements. It was discovered that between 2007 and 2018, Asiaciti
Trust Singapore committed serious breaches of MAS' AML requirements for trust
companies. The company failed to implement adequate AML policies and procedures
and did not subject its AML controls to independent audits. These failings hindered
the company's ability to detect and mitigate the money laundering risks associated
with its higher-risk customers.
5. Standard Chartered Bank and Standard Chartered Trust
On 19 March 2018, the Monetary Authority of Singapore imposed penalties of S$5.2
million and S$1.2 million on Standard Chartered Bank and Standard Chartered Trust
respectively. There were breaches of MAS' AML and CFT requirements. The breaches
occurred during transactions of the customers' trust accounts from December 2015
to January 2016.

6. TMF Trustees Singapore Limited


On 16 March 2020, there was a $400,000 composition penalty imposed on TMF
Trustees Singapore Limited for failure to comply with MAS' Anti-Money Laundering
and Countering the Financing of Terrorism AML requirements. TMF Trustees
Singapore failed to exercise sufficient oversight to ensure effective AML controls and
procedures, putting itself in danger of being used as a conduit for money laundering
activities.

Conclusion
As we go through all the cases above, it is clear how important it is to have
good KYC and AML procedures put in place for your company. However, even good
procedures are only as good as the business information that fuels them, allowing
companies to detect irregularities and misconduct. At CRIF Bizinsights, we take pride
in providing our clients with such information through customised searches, API
integration and database technology to ensure your business keeps to the standards
required by law.

Whether out of negligence, deliberate laziness, or malicious intent, failure to conduct


the mandated KYC and AML procedures in line with regulations can have serious
consequences. Keep your business reputation stable with the right processes, the
right technology, and most importantly, the right information.

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