Licensed trust company fined S$1.1m for lack of anti-money laundering scrutiny

A LICENSED trust company has been fined S$1.1 million for failing to comply with anti-money laundering controls, the Monetary Authority of Singapore (MAS) said on Thursday (Jan 20).

The penalty came on the back of Vistra Trust (Singapore) not having adequate procedures to determine whether certain parties presented higher money laundering or terrorism financing risks.

Besides the composition fine, the firm was also ordered to appoint an independent party to assess its remediation measures, with findings to be reported to the MAS.

The firm, which offers trustee services, failed to identify some higher-risk accounts, the MAS said. It also failed to carry out adequate enhanced customer due diligence - such as establishing settlors' funding sources - on accounts that had been identified as higher risk.

The MAS added that Vistra Trust did not get its senior management's approval to establish or continue business contact with these higher-risk accounts.

The breaches, uncovered in an MAS inspection from April 2019 to June 2019, put Vistra Trust "at a higher risk of being used as a conduit for illicit activities", the MAS said. It described the failures as "serious".

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Trust set-ups let third parties or trustees, hold assets for beneficiaries, a structure that Loo Siew Yee, assistant managing director of policy, payments and financial crime at the MAS, said runs the risk of being abused by criminals to conceal illicit proceeds.

She said: "Boards and senior management of trust companies must ensure that higher-risk trust accounts are identified and subject to robust money laundering/terrorism financing controls."

Vistra Trust has since paid the penalty and taken steps to address the risk management deficiencies that led to the breaches, the MAS added.