Singapore is playing financial hardball. Source: Wikimedia
The Singaporean regulatory authorities have promised stronger action to address damage to the city-state’s reputation caused by anti-money laundering lapses linked to Malaysia’s scandal-ridden 1Malaysia Development Bhd investment fund.
The Monetary Authority of Singapore conducted a 15-month probe into 1MDB, ruling they were “simply unacceptable” and Singapore’s reputation has “taken a dent” as a result.
Singapore last week seized S$240 million (US$177 million) of assets in the investigation of 1MDB-related fund flows for possible money laundering.
The central bank’s managing director Ravi Menon said: “We may not be any worse than other jurisdictions. But that is no consolation. We have not met the high standards we have set for ourselves.”
The MAS criticised UBS Group AG and DBS Group Holdings over 1MDB. Other financial institutions were also being investigated.
It also said it found problems at UK-based bank Standard Chartered.
The MAS added that an onsite inspection of Switzerland’s Falcon PBS, owned by one of the world’s largest sovereign wealth funds, the Abu Dhabi’s International Petroleum Investment Company (IPIC), in April found “substantial breaches” of anti-money laundering regulations.
The fund was set up in 2009 to bolster Malaysia’s economy and has led to allegations that billions of dollars have been improperly siphoned out, leading to probes in Abu Dhabi, Switzerland, the Caribbean, Hong Kong and the USA.
Singapore’s central bank said in May that it was closing down the Singapore operations of Swiss private bank BSI AG for money-laundering breaches, the first action of its sort for 32 years.
The city-state’s regulator was not examining 1MDB but was instead looking at cash transfers through its banks, Menon said.
Between 2013 and 2016, the MAS carried out 608 probes of financial institutions, Menon said, a six-fold increase from 2010 to 2013.
“This is not an investigation into 1MDB, that’s not our business,” Menon told the media. “Our business is to investigate financial transactions that took place in and through Singapore that were suspicious. We’re beginning to take a different tack. Naming and shaming sometimes hurts them more than financial penalties and they have an effect. But we will do this judiciously.”