Banks Tighten Vigilance and Processes After Money Laundering Case

Scandal Exposed Critical Weaknesses and Highlighted the Vital Role of Gatekeepers

- Angela Tan

Local banks have beefed up oversight around money laundering risks, with one lender reassigning a banker involved in a recent high-profile case to a non-client-facing role. The extra scrutiny is in response to the largest money laundering incident encountered here.

This involved around $3 billion in illicit funds being washed through at least 16 financial institutions by a group from China's Fujian province who used multiple passports to avoid detection.

The scandal exposed critical weaknesses, with breaches due to poor implementation of policies and controls that in turn highlighted the vital role of gatekeepers from individuals to banks and corporate secretarial firms in preventing financial crimes.

The Monetary Authority of Singapore (MAS) said on July 4 that it found shortcomings in the assessment of a customer's risk and source of wealth and the monitoring of suspicious transactions, and inadequate risk mitigation measures.

Penalties amounting to $27.45 million were imposed on nine financial institutions on July 4.

UOB, which was hit by $5.6 million in penalties—the second highest after the former Credit Suisse Singapore branch—said it has reviewed the issues and staff involved and addressed accountability and discipline issues.