The breaches uncovered include SAFS’s failure to take into account certain risk factors relating to its customers and business activities in its enterprise-wide risk assessment. SAFS also failed to conduct customer due diligence measures before establishing business relations. The company failed to look through third-party transactions in its customers’ accounts even though these transactions were not consistent with the company’s knowledge of these customers.
SAFS also did not manage to identify a number of customers that were at higher risk of conducting money laundering (ML) or terrorism financing (TF) even though there were red flags. This resulted in failure to perform enhanced customer due diligence measures. The company was said to fail to adequately establish the source of wealth or funds of the customers and their beneficial owners. In addition, the company did not get approval from its senior management to establish or continue business relations with some of these higher-risk customers.
Among the rest of the breaches include SAFS’s failure to submit suspicious transaction reports and its failure to conduct any internal audit to monitor the effectiveness of its AML/CFT controls.
MAS has also issued a reprimand to SAFS’s chief executive officer (CEO) Olivier Pascal Mivelaz and chief operating officer (COO) Steve Knabl for failing to ensure that SAFS complied with the requirements. Mivelaz and Knabl were said to have approved the inadequate enterprise-wide risk assessment.
In its May 7 statement, MAS says the company has taken the “necessary remedial actions” to address the deficiencies identified.
“Financial institutions (FIs) providing wealth management services to high net worth individuals must take commensurate measures to mitigate heightened ML/TF risks. The boards and senior management of FIs are expected to put in place adequate AML/CFT controls, actively oversee the implementation of the controls, and ensure that compliance and internal audit functions are working effectively and keeping pace with the FI’s business growth,” says Loo Siew Yee, assistant managing director for policy, payments and financial crime at MAS.
