Financial firms need to do more: MAS

SINGAPORE - Financial institutions here can do more to prevent money-laundering and terrorism-financing activities, according to the central bank.

In its latest annual report, the Monetary Authority of Singapore (MAS) notes that while frameworks and policies for identifying high-risk accounts are in place, "the performance of enhanced due diligence measures for such accounts needs to be strengthened".

MAS cited the thoroughness of customer screening processes as one area for improvement, so that banks can better determine their "source of wealth". Such inadequacies "hindered the effective application of customer due diligence measures", it added.

To keep financial institutions on their toes, MAS has ramped up its inspection regimen. In the last three years, the central bank has conducted 108 inspections on banks, insurance companies, money changers, remittance agents and licensed intermediaries to ensure they are adhering to rules regarding money-laundering and terrorism-financing activities.

That is an increase from the 79 inspections conducted in the preceding three-year period.

"The heightened supervisory effort is MAS' response to the growing risks of money-laundering globally," a spokesman said.

No financial institution here has ever been charged with money-laundering or terrorism- financing offences, but a number of them have been penalised for lapses in control of such illicit activities.

Between 2010 and last year, the regulator issued 47 warnings and reprimands, restricted the operations of seven institutions, and imposed financial penalties on 22 of them. It also revoked or did not renew the licences of 13 money changers and remittance agents.

One bank which facilitated the sale of a ship was fined $350,000 for failing to "conduct adequate due diligence on the final identity of buyers behind these transactions".

And a financial adviser was fined $187,000 for "serious lapses in policies and procedures on customer due diligence".

MAS would not reveal the identities of the two institutions involved, despite repeated requests. A spokesman said it would only do so if "it is in the public interest".

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