The Monetary Authority of Singapore (MAS) has fined Citibank, DBS Bank, Oversea-Chinese Banking Corp. (OCBC), and Swiss Life, a collective sum of S$3.8 million ($2.83 million) for allegedly breaching anti-money laundering and countering the financing of terrorism (AML/CFT) requirements. The regulator said the alleged violations relate to the irregularities around the collapse of Wirecard.

Fines Worth S$3.8M

DBS, OCBC, Citibank, and Swiss Life agreed to pay the regulator S$2.6 million, S$600,000, S$400,000, and S$200,000, respectively, according to a statement issued today (Wednesday). MAS, however, said it did not find any misconduct by the staff of the implicated financial institutions.

Wirecard was a German provider of outsourcing solutions for electronic payments transactions that imploded in 2020 after a deficit of 1.9 billion euros ($2.3 billion) was discovered in its books. Wirecard SG, the Singapore-based affiliate of the company, later filed for bankruptcy, owing creditors approximately $4 billion, and was directed to cease operations in the region.

"As Singapore grows its importance as an international financial center, MAS expects our financial institutions to step up their controls against facilitating illicit financial flows," noted Ho Hern Shin, the Deputy Managing Director for Financial Supervision at MAS.

"They must implement robust measures to know their customers, monitor ongoing transactions to ensure that these are consistent with their understanding of their customers and their businesses, and exercise greater vigilance when customers use complex structures," Shin added.

Regarding Citibank, the regulator said that the lender failed to understand the control structure of two of its corporate accounts. Responding to the claim, Citi said it had since taken steps to strengthen its KYC processes, according to a spokesperson quoted by Reuters.

Lapses in AML/CFT

On the other hand, DBS, whose fine is one of the largest issued by MAS, is alleged to have had lapses in security checks related to 11 corporate accounts and did not update customer risk ratings to ascertain the source of funds. The lender responded that the fraudulent transactions could have been a part of an elaborately orchestrated scheme.

OCBC told Reuters that one of its customers had been implicated in the Wirecard case but has since committed resources to strengthen its anti-money laundering procedures. According to MAS, the financial institution did not inquire about the background and purpose of the fraudulent transactions and was inconsistent about its knowledge of the account holders.

Nonetheless, MAS said the accused financial institutions had taken remedial actions to address the lapses identified in their AML/CFT controls, including enhancing their procedures and processes and conducting staff training.