Singapore June 21 2023: Some of the largest financial institutions operating in Singapore are being punished for lapses associated with the fall of German payment services group Wirecard, after authorities found during a probe inadequate controls for money laundering.
The Monetary Authority of Singapore, the city-state’s central bank and financial regulator, said on Wednesday that it will impose penalties amounting to 3.8 million Singaporean dollars ($2.8 million) on Citibank, DBS Bank, OCBC Singapore and Swiss Life Singapore.
These financial institutions were found to have breached MAS’s money laundering and financing of terrorism regulations.
DBS, Singapore’s largest local bank by total assets, received the biggest fine of SG$2.6 million.
MAS imposed penalties of SG$600,000 on OCBC, SG$400,000 on Citibank and SG$ 200,000 on Swiss Life Singapore.
“As Singapore grows in importance as an international financial center, MAS expects our financial institutions to step up their controls against facilitating illicit financial flows,” Ho Hern Shin, MAS deputy managing director for financial supervision said on Wednesday.
In 2020, the Singaporean central bank ordered the local arm of Wirecard to shut down operations and to return all customer funds. Wirecard was embroiled in a multibillion-dollar accounting scandal, leading to its collapse into insolvency the same year.
The company offered payment processing services in Singapore for merchants as well as help issuing prepaid cards. Hailed as one of Europe's leading financial technology companies before its fall, Wirecard collapsed after money purportedly held in the Philippines could not be accounted for, with banks saying the funds did not exist.
MAS said on Wednesday that the financial institutions being punished have accepted the penalties for their lapses, with the breaches identified during its probe following news of irregularities relating to Wirecard financial statements.
Authorities said the financial institutions being penalized were found to have inadequate controls in place when they dealt with persons who were involved in transactions with -- or had links to -- Wirecard or its related parties.
For instance, MAS said DBS failed to maintain relevant and up-to-date customer due diligence and adequately establish the source of wealth of higher risk customers. On the part of Citibank, it said the bank failed to investigate unusually large transactions that had significantly exceeded one customer’s past transaction amounts.
Singapore has been stepping up efforts to counter money laundering in the Asian financial hub. In May, it passed a bill paving the way for a digital platform to be established on which banks will be required to share information on suspicious activity.
Most of the financial institutions being punished are part of the initiative, including DBS, OCBC and Citibank. These have around two years to voluntarily share information on the platform, after which the sharing is set to be made mandatory, with penalties to be imposed on banks that do not comply.
“The financial institutions have taken prompt remedial actions to address the deficiencies identified by MAS,” the central bank said in a news release on Wednesday. “These include enhancements to their procedures and processes, and training to improve staff’s vigilance in detecting and escalating risk concerns.”
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