Singapore hits financial giants with record fines in laundering crackdown

Singapore’s central bank has imposed a total of S$27.45 million (US$21.5 million) in penalties on nine financial institutions, including global banks Citibank, Julius Baer, and UBS, in connection with the country’s largest-ever money laundering case, which came to light in 2023.

The Monetary Authority of Singapore (MAS) announced the enforcement actions, concluding investigations into the scandal that involved over S$3 billion (US$2.2 billion) in illicit assets. The case led to the conviction of ten foreign nationals in coordinated raids across the city-state in August 2023, Caliber.Az reports, citing foreign media.

The financial institutions penalised include major banks—Credit Suisse, UOB, UBS, Citibank, Julius Baer, and LGT Bank—which received fines ranging between S$1 million and S$5.8 million. Non-banking entities also sanctioned include UOB Kay Hian (S$2.85 million), asset manager Blue Ocean Invest (S$2.4 million), and Trident Trust Company Singapore (S$1.8 million).

The penalties are among the highest ever imposed by MAS and are just shy of the S$29.1 million in fines issued during the 1MDB-linked investigations in 2017.

The money laundering network used Singapore’s financial system to hold proceeds from overseas scams and illegal online gambling. Some of the funds were laundered into luxury assets such as property, high-end cars, jewellery, and designer handbags. The convicted individuals received jail sentences ranging from 13 to 17 months, after which they were deported and permanently barred from returning to Singapore.

MAS said it found deficiencies in the financial institutions’ customer risk assessments, source-of-wealth verification, and transaction monitoring. “The financial institutions have embarked on remediation of the deficiencies and MAS will monitor their progress closely,” the regulator stated.

Responding to the sanctions, UOB said: “We have implemented prompt remedial actions over the past two years and committed significant investments to enhance its internal risk management standards and capabilities further.”

UBS acknowledged the findings, saying: “UBS has cooperated fully with authorities to resolve the issue.”

A spokesperson for Citi Singapore noted: “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 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 confirmed full cooperation with authorities and implementation of internal reforms, while Trident Trust stated it has “cooperated with MAS [and has] a plan to address breaches.”

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

In a related development last year, two former bankers from Citi and Julius Baer were charged with forging loan and tax documents for the convicted launderers.

Following the scandal, Singapore has taken measures to strengthen its anti-money laundering framework. In June 2024, the government identified the banking sector as the highest risk area for financial crime in the city-state.

By Vafa Guliyeva