Monday, October 26, 2020

Singapore fines Asiaciti Trust $1.1m over inadequate anti-money laundering controls

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The Monetary Authority of Singapore (MAS) has slapped a $1.1 million penalty on international trust Asiaciti Trust for inadequate safeguards against money laundering and terrorism financing – including its failure to monitor unusually large transactions by “politically exposed” customers.

In a statement on Wednesday (July 22), MAS said Asiaciti Trust (ATSPL) committed various “serious breaches” spanning over a decade, including failing to monitor higher-risk customers more stringently.

In particular, the company failed to look into the background of “unusually large transactions with no obvious economic purpose”, undertaken by “politically exposed persons”.

Here, MAS is referring to individuals entrusted with prominent public functions either domestically, in a foreign country or in an international organisation. They may include heads of state, government leaders or senior executives of state-owned corporations.

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“Despite these unusual circumstances, ATSPL did not consider if there were grounds for suspicion that would warrant the filing of suspicious transaction reports,” MAS said.

The authority also found that the company had fallen short of safeguards to assess if its business contact with trust relevant parties presented a higher risk for money laundering or terrorism financing.

MAS cited a case where this lack caused the company to fail in properly establishing the source of wealth for an effective controller – referring to the person who owns or controls the settlor or trustee.

“ATSPL had simply relied on the individual’s representations regarding his source of wealth without obtaining information to adequately corroborate his claims,” said MAS.

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The company’s measures against money laundering and terrorism financing were also not subject to independent audits, the regulator pointed out.

These failures took place between 2007 and 2018, and were identified by the MAS in an inspection.

The authority said ATSPL has taken remedial measures to address the deficiencies, such as by conducting a review of customer accounts and transactions and terminating a number of higher-risk trust accounts, as well as filing suspicious transaction reports.

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