Citigroup Inc, DBS Group Holdings Ltd and other banks caught up in Singapore’s biggest money-laundering scandal are ramping up scrutiny of their wealthy customers and potential clients to avoid exposure to illicit flows, people familiar with the matter said.
Private bankers at several institutions are also receiving additional training to help them spot tricks used by criminals to mask their backgrounds and sources of funds, the people said.
The moves, which are voluntary, show how lenders are trying to close loopholes that enabled a group of criminals from China to launder more than S$3 billion (US$2.22 billion) in proceeds from online gambling through at least 16 financial institutions in the island nation.
Photo: Edgar Su, Reuters
The scandal has tarnished Singapore’s image and exposed weaknesses in how local and foreign banks and brokerages screen their clients.
The Monetary Authority of Singapore (MAS) recently completed on-site inspections of some banks that were involved in the case.
Lenders that had the most dealings with the criminals — through deposit accounts, loans and other financial services — are expected to face fines and other punitive measures from the financial regulator after its review concludes, some of the people said.
The MAS would assess if the financial institutions have implemented adequate and appropriate controls against money laundering and terrorism financing, and would take action if they have fallen short of requirements, as it has done in past cases, a MAS spokesperson said in response to questions from Bloomberg News.
Supervisory engagements are ongoing, the spokesperson said.
After the laundering case became public in August last year, Singapore’s government set up an inter-ministerial committee to review its anti-money laundering regime and strengthen defenses in sectors including financial institutions, property agents and precious metals dealers.
The assets seized by authorities included cash, gold bars, jewelry, cars, and residential and commercial properties.
The 10 accused have pleaded guilty, and have been sentenced to prison for 13 to 17 months. Another 17 people are under investigation and remain at large.
The 10 convicted individuals were linked to accounts across 16 financial institutions operating in Singapore that held more than S$370 million in deposits and investments.
The banks that held the most assets include Credit Suisse Group AG, Citigroup’s local unit and United Overseas Bank Ltd.
DBS is also among banks tightening their processes for vetting major transactions by clients, the people said.
The country’s largest bank had about S$100 million in exposure, mainly from financing property purchases.
Anti-money laundering processes are evolving to keep up with changes in how criminals act, as well as regulatory and industry developments, a DBS spokesperson said.
“Criminals will adapt their behavior now that there has been discovery of their methods, so we will need to continue thinking about how to stay one step ahead,” the DBS spokesperson added.
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
GEOPOLITICAL ISSUES? The economics ministry said that political factors should not affect supply chains linking global satellite firms and Taiwanese manufacturers Elon Musk’s Space Exploration Technologies Corp (SpaceX) asked Taiwanese suppliers to transfer manufacturing out of Taiwan, leading to some relocating portions of their supply chain, according to sources employed by and close to the equipment makers and corporate documents. A source at a company that is one of the numerous subcontractors that provide components for SpaceX’s Starlink satellite Internet products said that SpaceX asked their manufacturers to produce outside of Taiwan because of geopolitical risks, pushing at least one to move production to Vietnam. A second source who collaborates with Taiwanese satellite component makers in the nation said that suppliers were directly
Top Taiwanese officials yesterday moved to ease concern about the potential fallout of Donald Trump’s return to the White House, making a case that the technology restrictions promised by the former US president against China would outweigh the risks to the island. The prospect of Trump’s victory in this week’s election is a worry for Taipei given the Republican nominee in the past cast doubt over the US commitment to defend it from Beijing. But other policies championed by Trump toward China hold some appeal for Taiwan. National Development Council Minister Paul Liu (劉鏡清) described the proposed technology curbs as potentially having
EXPORT CONTROLS: US lawmakers have grown more concerned that the US Department of Commerce might not be aggressively enforcing its chip restrictions The US on Friday said it imposed a US$500,000 penalty on New York-based GlobalFoundries Inc, the world’s third-largest contract chipmaker, for shipping chips without authorization to an affiliate of blacklisted Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯). The US Department of Commerce in a statement said GlobalFoundries sent 74 shipments worth US$17.1 million to SJ Semiconductor Corp (盛合晶微半導體), an affiliate of SMIC, without seeking a license. Both SMIC and SJ Semiconductor were added to the department’s trade restriction Entity List in 2020 over SMIC’s alleged ties to the Chinese military-industrial complex. SMIC has denied wrongdoing. Exports to firms on the list