Singapore just sent a clear message to the global banking world: money laundering lapses won’t go unpunished. The Monetary Authority of Singapore (MAS) handed out S$27.5 million (US$21.5 million) in fines to nine financial institutionsincluding some of the world’s most powerful banksafter a two-year probe into the country’s largest-ever money laundering case. Credit Suisse’s Singapore branch took the biggest hit at S$5.8 million, followed by penalties against UBS (NYSE:UBS), Citigroup (NYSE:C), United Overseas Bank, and others. The case, which surfaced in August 2023, saw authorities seize over S$3 billion worth of assets, from luxury condos and supercars to crypto. Ten suspects of Chinese origin were convicted, and two ex-bankers were charged earlier this year.
At the heart of the issue: weak anti-money laundering controls. MAS pointed to poor or inconsistent implementation across the firms involved. Four individuals at Blue Ocean Invest were banned from regulated roles for up to six years, while several others received official reprimands. UBS, which absorbed Credit Suisse in 2023, said it fully cooperated with the review. Citi disclosed it has tightened onboarding and monitoring processes, while UOB and its brokerage arm UOB-Kay Hian also moved to close gaps. The regulator said it would monitor progress closely, signaling there’s still more work to be done behind the scenes.
This could be the biggest compliance reckoning since MAS shut down BSI Bank’s local unit in 2016 during the fallout from the 1MDB scandal. While Singapore remains a rising star in global wealth managementassets under management climbed 10% to S$5.41 trillion last yearthe case highlights a tension between growth and governance. Similar crackdowns abroad have cost banks billions, including TD Bank’s US$3.1 billion AML settlement last year and Danske Bank’s US$2 billion fine in 2022. For investors, the key takeaway is this: as capital flows into Singapore, regulators are under pressure to show they can keep the pipes clean.
This article first appeared on GuruFocus.