Penalty

MAS Fines Standard Chartered Singapore for AML/CTF breaches amid profit growth

In Banks, Business by Parvesh ShamdasaniLeave a Comment

Another morning and another fine for our beloved Standard Chartered according to The Strait Times. They were fined “S$5.2 million on Standard Chartered Bank, Singapore Branch (SCBS) and S$1.2 million on Standard Chartered Trust (Singapore) Limited (SCTS) for breaches of its anti-money laundering and countering financing terrorism (AML/CFT) requirements.” The breaches occurred when trusts accounts were transferred from Standard Chartered Trust (Guernsey) to Standard Chartered Trust (Singapore) with MAS (Monetary Authority of Singapore) saying it found SCBS’ and SCTS’ risk management and controls in relation to the transfers to be “unsatisfactory”.

I remember back in 2012 when Standard Chartered were fined by the New York State Department of Financial Services (DFS) who accused them of hiding $250bn of transactions with Iran and failing to detect a large number of potentially high risk transactions. Standard Chartered agreed on a US$340m fine and to have an independent monitor placed at the bank. 2 years later in 2014 the bank was fined again by DFS for failing to improve its money laundering controls and had to part with US$300m, as well as being banned from accepting new US dollar clearing accounts without the state’s approval. The embarrassing part for the Hong Kong Monetary Authority (HKMA) was the reason, being “money laundering failings in its United Arab Emirates and Hong Kong businesses” according to the Shanghai Daily. The article stated a defensive tone from the HKMA, something which I also felt from their press release.

The only time I can remember the Hong Kong government fining SCB (Standard Chartered Bank) was at the end of last year when the SFC fined Standard Chartered Securities US$330,000 for internal control failures. Irrespective of all these fines, SCB last month announced that pre-tax profit rose 175 per cent in 2017 and they will be offering a dividend to shareholders for the first time since 2015, according to the South China Morning Post. With its underlying pre-tax profit last year of US$3 billion, paying these fines should be no problem. However, I wish it were that simple. The DFS already temporarily suspended USD clearing services for certain business clients of Standard Chartered Bank (Hong Kong) back in 2014, what could happen next? That’s why rumors have been floating around for some time that SCB is in the process of getting stricter in Hong Kong, from the bottom-up. So if you have an account with them, expect more questions and be clear with your dealings to avoid unnecessary issues. If you don’t have an account but want to apply, better do it before the requirements become more stringent.

Business and compliance enthusiast, problem solver, road warrior, police ID check magnet, and half geek whose exploits have taken him around the United States, United Kingdom, Caribbean, India, deep into Southeast Asia and West Africa. Entered the anti-money laundering and high risk field to help develop understanding, contribute research, improve standards, prevent profiteering at the expensive of SMEs, and to protect interests of the average person.
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