Singapore penalises nine financial institutions over 2023 money laundering case

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Penalties total S$27.45 million for financial institutions

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Largest penalty since 1MDB case in 2017

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central bank cites risk assessments and monitoring deficiencies

(Adds responses from Citi, UOB and Julius Baer and LGT Bank in paragraphs 13, 14, 17)

By Jun Yuan Yong

SINGAPORE, July 4 (Reuters) - Singapore's central bank has imposed penalties on nine financial institutions, including Citibank, Julius Baer and UBS, on Friday totalling S$27.45 million ($21.5 million) in relation to the country's biggest ever money laundering case in 2023.

The case involved more than S$3 billion ($2.2 billion) in illicit assets seized after 10 foreigners were convicted in a series of simultaneous raids in August 2023.

The total penalty is just short of the S$29.1 million in penalties handed to eight banks in a case involving Malaysia's 1MDB in 2017.

The banks involved - Credit Suisse, UOB, UBS , Citibank, Julius Baer, and LGT Bank - were each penalised between S$1 million and S$5.8 million.

Brokerage firm UOB Kay Hian, asset management firm Blue Ocean Invest and trust and fund services company Trident Trust Company Singapore were also penalised S$2.85 million, S$2.4 million and S$1.8 million respectively.

The penalties mark the conclusion of the central bank's enforcement actions against financial institutions.

The 10 convicted money launderers were sentenced to jail terms of between 13 and 17 months in the city-state's largest case of its kind. They were deported and barred from Singapore after completing their sentences.

They held money gained from overseas scams and online gambling operations in bank accounts in Singapore, and converted some cash into real estate, cars, handbags and jewellery.

DEFICIENCIES FOUND

The Monetary Authority of Singapore said it has identified shortcomings in the financial institutions' customer risk assessments, their tracing of the sources of customers' wealth as well as their ability to monitor and follow up on suspicious transactions.

"The financial institutions have embarked on remediation of the deficiencies and MAS will monitor their progress closely," it said.

In response to media queries, UOB said it has implemented prompt remedial actions over the past two years and committed significant investments to enhance its internal risk management standards and capabilities further.

UBS, which agreed to take over Credit Suisse in March 2023, said that it acknowledged the findings and has cooperated fully with authorities to resolve the issue.

A Citi Singapore spokesperson said: "We have further strengthened our client onboarding and monitoring processes and continue to work closely with the authorities to protect the integrity of the financial system and enhance financial crime risk and controls measures."

UOB Kay Hian in a bourse filing said it has taken steps to strengthen its anti-money laundering policies, procedures and controls and was sharing developments regularly with the central bank.

Blue Ocean Invest said that the company has fully cooperated with the authorities and has implemented measures to enhance internal policies and procedures.

A Trident Trust Company spokesperson also said it has cooperated with MAS plan to address breaches.

A Julius Baer spokesperson said it has cooperated fully with the investigation and taken concrete steps to strengthen its processes and anti-money laundering framework. LGT Bank said it remains committed to fighting money laundering and safekeeping the integrity of Singapore's financial system.

In August last year, Singapore charged two ex-bankers from Citi and Julius Baer for forging loan and tax documents for the money launderers.

Singapore has also sought to make it easier for law enforcement to prosecute money laundering offences.

In June 2024, the government identified Singapore's banking sector as posing the highest money laundering risk in the city-state. (Reporting by Jun Yuan Yong; Additional reporting by Yantoultra Ngui; Editing by David Stanway and Louise Heavens)