On Monday this week the Monetary Authority of Singapore (MAS) imposed a $400,000 composition penalty on TMF Trustees Singapore Limited (TTSL) for failure to comply with MAS’ Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regulation.
Investigation by MAS identified the compliance issues and TTSL has since then payed the penalty in full and taken prompt remedial actions.
MAS’ investigation found that between June 2011 and April 2018 TTSL had failed to follow MAS’s requirements on AML/CFT regulation. Firstly, TTSL failed to verify source of wealth trust settlers who posed a higher risk of money laundering and terrorism financing. The company also failed to regularly monitor or scrutinize the transactions of trust relevant parties (TRPs).
The assessment concluded that TTSL did not exercise sufficient oversight to follow AML/CFT procedures and that placed the company at risk of being used in criminal activities.
The penalty, however, took into account that TTSL identified and addressed the cause of the failures with the assistance of an independent consultant. The company acted promptly to address the deficiencies and enhance its procedures and practices. In line with this effort, the company also refrained from accepting new trust customers for three months.
Loo Siew Yee, Assistant Managing Director (Policy, Payments & Financial Crime), MAS, commented:
Loo Siew Yee
While they have legitimate economic uses, trusts and other corporate or investment structures can also be abused by criminals to mask their illicit activities. This case is a timely reminder to financial institutions involved in setting up these structures or dealing with customers who use such vehicles, to have in place robust controls to prevent them from being misused for ML/TF. Boards and senior management of financial institutions must exercise strong oversight over ML/TF risks, such that AML/CFT controls implemented are effective.
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