SINGAPORE - The Monetary Authority of Singapore (MAS) on Monday (March 19) announced it has imposed penalties of S$5.2 million on Standard Chartered Bank, Singapore Branch (SCBS) and S$1.2 million on Standard Chartered Trust (Singapore) Limited (SCTS) for breaches of its anti-money laundering and countering financing terrorism (AML/CFT) requirements.
These breaches occurred when trust accounts of SCBS' customers were transferred from Standard Chartered Trust (Guernsey) to SCTS from December 2015 to January 2016, said MAS.
MAS said it found SCBS' and SCTS' risk management and controls in relation to the transfers to be "unsatisfactory".
The transfers occurred shortly before Guernsey's implementation of the Common Reporting Standards (CRS) for the Automatic Exchange of Financial Account Information in Tax Matters. "The timing of the transfers raised questions of whether the clients were attempting to avoid their CRS reporting obligations," said MAS. "However, SCBS and SCTS did not adequately assess and mitigate against this risk factor, and also failed to file suspicious transaction reports in a timely manner."
MAS said that in determining the regulatory action, it took into consideration mitigating factors. It said SCBS had proactively notified the regulator of its internal review on the trust accounts, and SCBS and SCTS management "showed strong commitment" to address the deficiencies identified by MAS.
MAS added that both SCBS and SCTS have taken prompt and substantive remedial measures to strengthen their AML/CFT risk management and controls.
Its deputy managing director Ong Chong Tee said: "MAS requires financial institutions to adequately assess money laundering risks when deciding whether to accept customers. They should also have in place good systems and processes to monitor customer transactions. We expect financial institutions to remain vigilant by instilling a strong risk culture."
In a separate statement on the MAS action, a bank spokesman said: "We regret that we fell short of our own standards in adequately mitigating the risks involving some clients who might have attempted to avoid reporting obligations under the Common Reporting Standard by transferring their trusteeships between December 2015 and January 2016.
"We take this matter very seriously. We proactively reported it to the authorities, conducted a thorough review of the relevant trust structures, and made structural and procedural changes to ensure that our employees are better equipped to identify, assess, and mitigate potential risks."
StanChart Singapore added: "We will continue to take ongoing rigorous action to strengthen our controls and culture, including further enhancing our training programmes to ensure that relevant, timely training is provided to enable us to stay updated with the latest developments. We will continue to monitor, review and strengthen these measures to bolster our overall defence against potential financial crime risks."