Singapore's Monetary Authority slapped a fine of S$5.2 million on Standard Chartered bank Singapore on Friday for breaches of anti-money laundering requirements in handling the funds of Malaysian state investment fund 1 Malaysia Berhad. The Singapore central bank also fined Coutts & Co S$2.4 million for the breaches.
MAS said there were "significant lapses" in standard Chartered bank's customer due diligence processes as well as numerous breaches of its AML regulations. "The control lapses stemmed from inadequacies in policies and procedures, insufficient independent oversight of front office staff, and a lack of awareness of money laundering risks among some bank staff," MAS said, according to Channel News Asia.
However, the central bank said it did not find evidence for "wilful misconduct" on the part of the bank. The central bank asked Stanchart to ensure disciplinary action against erring officers. It also asked the bank to put in place measures to rectify the breaches.
Standard Charterd said it regretted the lapses that happened between 2010 to 2013. "We reported the suspicious transactions, both before and at the time we exited the accounts in early 2013, and have been fully cooperating with the authorities investigating this matter. Standard Chartered has taken, and continues to take, remedial and disciplinary action where warranted and will continue to strengthen our controls, processes, and surveillance systems," the bank said in a statement.
MAS also found Coutts was guilty of breaches in customer due diligence measures. "The failure to exercise the necessary enhanced due diligence on these accounts was the result of actions or omissions of certain officers who have since left the bank. These officers include Mr Yak Yew Chee and Ms Yvonne Seah, who had left Coutts to join BSI Bank Limited in late 2009," MAS said.
The Malaysian state fund, which is at the centre of the biggest political scandal in the country, is under money laundering investigations in at least six countries including Singapore, US and Switzerland.