Singapore penalizes Citi, UBS, others for money laundering breaches

Ten people originally from China but holding various nationalities were jailed in Singapore in the Sg$3.0 billion (US$2.4 billion) case.

They used Singapore's financial system to launder illicit proceeds from gambling and scams, with observers saying the case hurt Singapore's reputation as a global financial center.

Following their arrests in 2023, the Monetary Authority of Singapore (MAS) launched an investigation into financial institutions that had dealings with the group as customers.

Concluding its probe, the MAS on Friday imposed penalties totaling Sg$27.45 million on nine financial institutions for breaches in anti-money laundering safeguards.

"The breaches arose out of poor or inconsistent implementation of these (anti-money laundering) policies and controls," the authority said in a statement.

The shortcomings included inadequate customer risk assessment and failure to detect or follow up on certain "red flags" detected in documents that should have cast doubt on some of their clients' sources of wealth, according to the MAS.

Eight of the institutions "failed to adequately review relevant transactions flagged as suspicious by their own systems", the regulator added.

"The relevant transactions were unusually large, inconsistent with the customers' profiles or showed unusual patterns."

Living in Singapore's poshest neighborhoods, the convicted money launderers held assets, including luxury cars, jewelry, designer goods, cryptocurrency and cash -- all seized by police.

Banks respond to penalties

Those punished by MAS include local lender United Overseas Bank (UOB), which was hit with a Sg$5.6 million penalty.

UOB tower overlooking Singapore landscape. Illustration photo by Pexels

UOB said Friday "we acknowledge and accept MAS' findings" and had taken measures over the past two years to address shortcomings.

The Singapore branch of Credit Suisse, which collapsed in March 2023 and was acquired by rival UBS, was given a Sg$5.8 million penalty.

UBS AG's Singapore branch was meanwhile handed a Sg$3.0 million penalty, with the bank saying it would "continue to work together closely" with regulators.

Citi Singapore said it was "committed to ensuring the highest standard of governance and controls", after Citibank N.A. Singapore and Citibank Singapore Ltd were hit with a Sg$2.6 million penalty.

The bank said it has also strengthened its "client onboarding and monitoring processes" and will continue to work closely with the authorities.

The Singapore branch of Switzerland's Bank Julius Baer was also penalized Sg$2.4 million, saying Friday it had taken "concrete steps to strengthen our processes and anti-money laundering framework".

Three more financial institutions rounded up the rest of the penalties.

The MAS also banned four people from doing any business in the industry for between three and six years, and issued reprimands to five more people as part of the actions it had taken.