LONDON • Regulators in Europe and Asia are investigating Standard Chartered Bank over the role its staff may have played in transferring US$1.4 billion (S$1.9 billion) of private bank client assets from Guernsey, an English Channel island, to Singapore before new tax transparency rules were introduced, people with knowledge of the probes said.
The Monetary Authority of Singapore (MAS) and Guernsey's Financial Services Commission are investigating the chain of events, said the sources. Britain's Financial Conduct Authority, StanChart's home regulator, is aware of the transfers, but is not currently reviewing them, a person familiar with the matter said.
The assets, held in its Guernsey trust unit for mainly Indonesian clients, were moved in late 2015, before the Channel island - a self-governing British Crown dependency that is well-known as a low-tax, offshore financial centre - adopted the Common Reporting Standard (CRS), a global framework for the exchange of tax data, at the start of last year, the people said. StanChart shuttered its operations on the island last year.
StanChart's processes and the way the transfers were handled are being examined, but regulators have not suggested that bank employees colluded with clients to evade tax, the sources said.
The bank conducted an inquiry and notified regulators after employees raised questions early last year about the timing of the transactions and whether the source of customers' funds had been properly vetted, said the sources, who declined to be identified because the details are private.
Employees of the trust in Guernsey and relationship bankers in Singapore flagged the US$1.4 billion of asset transfers, when they were first proposed in 2015, noting a sudden flurry of requests in what was previously a static series of accounts, people familiar with the timeline said.
The transfers were approved by StanChart's financial crime compliance team after a review, they said.
Staff in Guernsey highlighted disparities between the earnings of some customers and balances in their accounts.
The firm's probe also examined if staff breached its code of conduct when making the transfers, and considered if the timing was related to the impending introduction of the CRS tax rules in Guernsey, the people said.
Under the CRS, around 100 countries agreed to automatically share annual reports about accounts belonging to people subject to taxes in each member nation.
Britain, Guernsey, Singapore and Indonesia have all signed the treaty, but adopted the standard on different timelines. Guernsey adopted the CRS last year, and will make its first report this year.
Singapore did not enforce the CRS until the start of this year, and will not exchange any tax information until next year.
Last July, StanChart said it was shutting its Guernsey office and transferring all its trust and fiduciary services to Singapore, citing "shifting client needs".