24 July 2020
If there were any doubt in one’s mind as to the resolve of Singapore's financial services regulator in tackling money laundering, the recent $1.1 million composition penalty imposed on trust company Asiaciti should now put the matter to rest.
Asiaciti Trust Singapore Pte Ltd is a trust company licensed by the Monetary Authority of Singapore (MAS) under the Trust Companies Act. All licensed trust companies are required to observe anti-money laundering and countering the financing of terrorism (AML/CFT) requirements, as set out in MAS Notice TCA-N03.
According to the MAS media release of 22 July 2020, between 2007 to 2018, there were numerous lapses within the AML/CFT controls of Asiaciti, including the failure to make source of wealth inquiries of an effective controller of a fund client and the failure to inquire into the background and purpose of unusually large transactions undertaken by clients that were politically exposed persons.
The obligations that have been breached are fairly fundamental requirements which all financial institutions ought to be familiar with. While the regulatory responses to AML/CFT control lapses in the past have always centred around unpublicised and discreet orders to rectify and remediate, this case seems to suggest that MAS is beginning to move in a different direction, towards greater willingness to publicise shortcomings and to levy relatively large fines in blameworthy cases.
In our view, this is a move in the right direction, and indeed quite consistent with regulatory trends all around the world. Private admonishments and directions to rectify and remediate are, arguably, becoming less effective in recent years as a means to address errant behaviour by financial institutions. MAS is finally realising the benefit that the glare of adverse publicity and large penalties can bring in order to instil, within senior management staff, the political will to effect meaningful behavioural change, particularly in the AML/CFT space.
A copy of the media release by MAS may be accessed here.
