THE Monetary Authority of Singapore (MAS) said on Monday it will sharpen its supervision on anti-money laundering and countering financing of terrorism control (AML/CFT) in the financial industry.
Speaking at a press briefing, MAS managing director Ravi Menon said the ongoing probe into financial transactions related to Malaysia's embattled state fund 1MDB is a stark reminder that the risks are real. The financial sector is particularly vulnerable to money-laundering and illicit-financing risks, he added, calling it "part of our karma" as an international financial centre.
"There is no doubt that the recent findings have made a dent in our reputation as a clean and trusted financial centre," said Mr Menon. "MAS is disappointed with the lapses in AML/CFT controls and breaches of AML/CFT regulations that we have picked up in our financial institutions."
He added that while money laundering is growing more sophisticated, and incidents are happening in every financial centre, that cannot be an excuse for what has taken place.
"We may not be any worse than other jurisdictions. But that is no consolation. We have not met the high standards we have set for ourselves," said Mr Menon. "MAS is a no-nonsense regulator."
MAS this month rapped DBS, Standard Chartered Singapore and UBS Singapore for "control failings" linked to flows of funds from 1MDB, and said it will take "decisive actions" against financial institutions used as conduits for these questionable fund flows.
More banks are being investigated as the 1MDB scandal widens its reach into Singapore's financial sector. MAS has said the lapses at the three major banks in the city-state did not point to pervasive weaknesses in control processes.
MAS is still investigating Falcon Private Bank, but has, for now, said the Swiss bank failed to "adequately assess irregularities in activities pertaining to customers' accounts and to file suspicious transaction reports".
Its statement came on the heels of the US Department of Justice (DOJ) lawsuit claiming more than US$3 billion was allegedly misappropriated from 1MDB and laundered through US financial institutions.
1MDB (1Malaysia Development Bhd) was set up by Malaysian Prime Minister Najib Razak in 2009. The Wall Street Journal reported last July that some US$700 million from the investment fund had been allegedly siphoned into Mr Najib's personal bank account - a charge he has consistently denied for the past year.
The DOJ lawsuit referred to fund transfers to a "Malaysian Official 1" - a high-ranking official in the Malaysian government who also held a position of authority in 1MDB.