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SINGAPORE, Oct 9 (Reuters) – Banks in Singapore are
taking longer than usual to perform due diligence on clients and
closing accounts in some cases, sources said, as procedures
tighten after the financial hub’s biggest money laundering
scandal, which involved $2 billion in assets.
Banks such as Oversea-Chinese Banking Corp Ltd (OCBC)
, Citigroup Inc and United Overseas Bank (UOB)
are demanding more documents than usual in some cases
to verify sources of wealth, two of the sources said.
Also, wait times for wealthy individuals opening bank
accounts have risen significantly from the one to three months
typical before the scandal, said the sources who spoke on
condition of anonymity as the matter is sensitive.
In a statement, the Monetary Authority of Singapore said
financial firms must verify customers’ identities, establish the
sources of wealth and funds of higher-risk clients, and keep
track of transactions.
“These requirements are not new,” the central responded to a
Reuters request for comment. “Given the attributes and size of
their transactions, high net-worth individuals are often
subjected to more stringent checks by financial institutions.”
The changes in due diligence by banks come after police in
August arrested and charged 10 foreigners, all from China, a big
source of fund inflows, in Singapore’s most dramatic swoop of
its kind.
Authorities have seized about $2 billion worth of assets,
from luxury real estate and cryptocurrencies to gold bars,
designer handbags and funds parked in banks such as Credit
Suisse and Julius Baer.
One source, a wealth manager with a Singapore bank, said
after the scandal that only “high-quality clients with good
profiles and substantial assets under management” could expect
to get a private banking account opened within three months.
A spokesperson for Singapore’s second-biggest lender, OCBC,
said it devoted “significant” resources to continuously
strengthen controls and worked closely with regulators and peers
to guard against illicit activities.
“We are committed to the fight against money laundering
and ensuring the highest standard of governance and controls,”
said Citi. “We have been working with the authorities to
strengthen and protect the integrity of the financial system.”
In a statement, UOB said it was vigilant against risks from
money laundering or terrorism financing and ensured robust
checks as part of its due diligence checks, making use of data
analytics and technology solutions.
Credit Suisse and Julius Baer declined to comment.
ACCOUNTS REVIEW
The scandal comes at a time when the city-state is
experiencing a sharp jump in asset inflows from China, Hong Kong
and elsewhere, drawn by its relative political stability, low
taxes, and policies favourable for setting up funds.
Total assets under management in Singapore rose 16% to
S$5.4 trillion in 2021, the latest central bank figures show,
outstripping an increase of 12% worldwide that year, to $112
trillion.
With the scandal prompting questions about Singapore’s image
as a wealth hub, authorities are stepping up inspections into
financial firms suspected of involvement in the case.
The increased checks have led some banks to drop
clients.
A Chinese national and permanent resident of Singapore said
OCBC notified them last month that it would close their
decade-old account, without giving a reason.
“We have conducted a review of the accounts … and regret
that we can no longer support them,” OCBC said in a notice
reviewed by Reuters, adding that it was unable to say what
factors prompted its decision.
The individual, who sought anonymity, believed the closure
was due to suspicion of money laundering as the account featured
in regular transactions with business partners in China.
OCBC did not comment on this specific case.
A real estate agent, who advises wealthy foreign and
domestic individuals, said the opening of bank accounts was now
taking much longer than usual for some clients.
“Business is very tough for us now, there are so many
hurdles we have to go through,” the agent added. “But better to
be extra careful than get involved in crime.”
(Reporting by Chen Lin and Yantoultra Ngui; Editing by Sumeet
Chatterjee and Clarence Fernandez)
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