Eye on suspicious actions
MAS studying’ reports linking banks to illegal deals
SINGAPORE: Singapore’s financial regulator is “closely studying” a report that said about Us$4.4bil of suspicious transactions flowed through the city’s banks.
The island state’s largest lenders – DBS Group Holdings Ltd, Oversea-chinese Banking Corp (OCBC) and United Overseas Bank Ltd (UOB) – are among global firms that profited from “powerful and dangerous players” even after the US imposed penalties on the institutions, the International Consortium of Investigative Journalists (ICIJ) said in an investigation published Sunday. The Us$4.4bil was processed by Singapore banks including DBS, OCBC and UOB, it said.
While the report doesn’t necessarily imply the transactions were illicit, the Monetary Authority of Singapore (MAS) “will take appropriate action based on the outcome” of its review, it said in an emailed statement yesterday.
DBS shares fell 1.5% to S$19.70 as of 1:43pm in Singapore, taking this year’s loss to 24%. OCBC dropped 0.6%, while UOB slipped 1%.
In response to requests for comment, OCBC and UOB said their frameworks to detect illicit flows were “robust,” and that they kept improving their technology to help them identify money laundering. UOB added that it complied “with all applicable laws, rules and regulations in the markets in which we operate”.
In an emailed statement, DBS said it had “zero tolerance for bad actors abusing the financial system” and that it was “generally very difficult to delay or intercept money in transit” unless there are sanctions on names or account freezes. “The normal process – which happens behind the scenes -- involves subsequent investigations to establish suspicion, based on which the necessary action is taken.”
Separately, The Singapore Straits Times reported on Sept 21 that the ICIJ had highlighted on Sept 20 leaked files which contained information about more than US$2 trillion worth of transactions between 1999 and 2017, which were flagged by internal compliance departments of financial institutions as suspicious.
The Straits Times quoting “experts” as saying that filing suspicious activity reports do not translate to wrongdoing. Furthermore, banks and financial institutions are obliged to flag unusual transactions so that regulators can follow up on them, the experts added.
For example, an account which typically sees small transactions getting an unusually large deposit of money might pop up on banks’ radars.
Alternatively, if a bank customer who has Us$1mil in his account decides to transfer all his money to another bank – such a transaction might also show up as “suspicious”.
Associate Professor Lawrence Loh at the National University of Singapore Business School said: “The revelation so far has been more focused on the movements rather than the applications of the funds.
“In fact, there may be a wide spectrum of possibilities for the applications, including those relating to corruption or even as drastic as criminal support,” he added.
ICIJ on Sunday released a list of banks in Singapore involved in the allegedly illicit transfers, based on more than 2,100 reports amounting to some Us$35bil, that were filed by about 90 financial institutions. A report may contain multiple transactions.
The list “displays cases where sufficient details about both the originator and beneficiary banks were available, and is designed to illustrate how potentially dirty money flows from country to country around the world, via Us-based banks”, said the ICIJ.
The consortium reported that five global banks appeared most often in the leaked documents – HSBC Bank, Jpmorgan, Deutsche Bank, Standard Chartered and Bank of New York Mellon. — Bloomberg & The Straits Times, Spore/ann