Singapore’s regulator has pledged to take “firm regulatory actions” against UBS, Standard Chartered and DBS Bank for failings in anti-money laundering controls related to the widening international scandal surrounding Malaysia’s state investment fund 1Malaysia Development Berhad (1MDB).
The Monetary Authority of Singapore said banks and other institutions in the city-state had been used as conduits for flows of funds from 1MDB.
The statement marks a raising of the tempo of the multinational probes into 1MDB, a day after US prosecutors moved to seize $1bn in assets as part of an investigation into misappropriated Malaysian funds.
The Singapore regulator found instances of money laundering control failings in all three banks and undue delay in detecting or reporting suspicious transactions.
In some cases there were weaknesses in the process for accepting clients and monitoring transactions. However, there were no pervasive control weaknesses or staff misconduct within these three banks, the MAS said.
The MAS also said it had seized bank accounts and other assets totalling S$240m (US$177m) in the course of the investigation, including about S$120m belonging to Malaysian businessman Jho Low and his immediate family.
US prosecutors say Mr Low played a central role in the operations of 1MDB, though he has denied playing any part after the state investment fund was created.
The US case contained details of fund flows through banks in Singapore, including accounts held at StanChart and Falcon, a Swiss private bank, which US prosecutors said were used to funnel money diverted from 1MDB.
The Singapore regulator said it had found “substantial breaches” of anti-money laundering regulations at the Singapore branch of Falcon, including the failure to file suspicious transaction reports.
The MAS said: “Appropriate actions will be brought against those who have broken Singapore’s laws.”
In May, the MAS ordered the closure of Swiss private bank BSI’s branch in Singapore, accusing it of serious anti-money laundering failures connected to 1MDB.
StanChart said it had reported the suspicious transactions and had been co-operating with authorities. “We have strengthened our anti-money laundering controls and processes and will continue to play an active role in the fight against financial crime.”
DBS said: “Egregious financial crime is highly sophisticated and intentionally designed to evade systems and controls.” The bank said it had voluntarily reported questionable activities to the relevant authorities.
UBS said it reported suspicious transactions to the regulator, and that it was working with authorities.
Falcon said it was “in co-operation with authorities” and would comment further when investigations are complete.
The US justice department case appeared to link Najib Razak, Malaysia’s prime minister, to a web of corrupt officials. However, Mr Najib was not identified by name and has denied any wrongdoing.
Salleh Said Keruak, Malaysia’s communications minister, said on Thursday: “Any claims relating to 1MDB must be treated with caution, follow due legal process and adhere to the principles of innocent until proven guilty.”