Swiss-Asia Financial Services fined S$2.5 million for breaches of anti-money laundering requirements

SINGAPORE: The Monetary Authority of Singapore (MAS) has fined Swiss-Asia Financial Services S$2.5 million (US$1.8 million) for multiple breaches of requirements to safeguard against money laundering and terrorism financing.

A reprimand has also been issued to the company's chief executive officer and chief operating officer for failing to ensure compliance with these requirements.  

The wealth and fund management company saw significant growth in its business between September 2015 and October 2018, MAS noted in a media release on Tuesday (May 7).

However, the company's control measures across a wide range of areas did not keep pace with its growth, exposing it to the risk of financial crime.

Several breaches were uncovered during MAS' inspection.

These included the failure to take into account certain relevant risk factors relating to the company’s customers and business activities in its enterprise-wide risk assessment.

Swiss-Asia Financial Services also failed to perform customer due diligence measures before establishing business relations. 

“SAFS’ practice was to establish business relations with customers before customer due diligence measures were completed,” said MAS.

The financial institution also failed to scrutinise multiple third-party transactions in customers’ accounts even though the transactions were not consistent with its knowledge of the customers.

Other failures include not identifying a number of customers to be of higher money laundering or terrorism financing risk even though there were red flags, resulting in failure to perform enhanced customer due diligence measures.

For other customers that the company had identified to be of higher risk, Swiss-Asia Financial Services failed to adequately establish the source of wealth or the source of funds of the customers and their beneficial owners. 

The company did not obtain approval from its senior management to establish or continue business relations with some of these higher-risk customers.

It also failed to submit suspicious transaction reports in relation to several customers even though there was sufficient basis to do so, and did not conduct any internal audit to monitor the effectiveness of the company’s anti-money laundering and countering the financing of terrorism controls and its compliance with regulatory requirements.

The CEO of Swiss-Asia Financial Services, Olivier Pascal Mivelaz, and COO Steve Knabl were issued a reprimand for failing to discharge their respective duties and functions of their offices to ensure that the company complied with MAS’ requirements. 

“In particular, they had approved the inadequate enterprise-wide risk assessment. They also failed, over a period of four years, to ensure that regular internal audits were carried out to assess the effectiveness of SAFS’ anti-money laundering/countering the financing of terrorism controls in view of the company’s significant business growth during that time,” said MAS. 

The company has taken the necessary remedial actions to address the deficiencies identified by MAS.

“Financial institutions providing wealth management services to high net worth individuals must take commensurate measures to mitigate heightened money laundering and terrorism financing risks,” said Ms Loo Siew Yee, MAS assistant managing director for policy, payments and financial crime.

“The boards and senior management of financial institutions are expected to put in place adequate anti-money laundering and countering the financing of terrorism controls, actively oversee the implementation of the controls, and ensure that compliance and internal audit functions are working effectively and keeping pace with the financial institution's business growth.”