SINGAPORE – A number of banks in Singapore handled about US$4.5 billion (S$6.13 billion) in suspicious transactions between 2000 and 2017, with DBS Bank, CIMB Bank and Deutsche Bank among those that processed the largest sums of such funds here.
This is according to the findings of the International Consortium of Investigative Journalists (ICIJ) on leaked files, comprising so-called suspicious activity reports, from the Financial Crimes Enforcement Network (FinCEN) in the United States.
The consortium noted that, within almost 20 years, Singapore received about US$3 billion and sent US$1.5 billion in 1,781 suspicious transactions.
In all, the ICIJ reported on Sunday (Sept 20) that the files contained information about more than US$2 trillion worth of transactions between 1999 and 2017, which were flagged by internal compliance departments of financial institutions as suspicious.
Experts told The Straits Times that filing suspicious activity reports do not translate to wrongdoing. Furthermore, banks and financial institutions are obliged to flag unusual transactions so that regulators can follow up on them, they added.
For example, an account which typically sees small transactions getting an unusually large deposit of money might pop up on banks’ radars, said CIMB Private Banking economist Song Seng Wun.
Alternatively, if bank customer who has $1 million in his account decides to transfer all his money to another bank – such a transaction might also show up as “suspicious”, he added.
“Such reports are quite normal, and they aim to help banks build a culture where they take anti-money laundering activities seriously,” Mr Song said.
Associate Professor Lawrence Loh at National University of Singapore Business School said: “The revelation so far has been more focused on the movements rather than the applications of the funds.
“In fact, there may be a wide spectrum of possibilities for the applications, including those relating to corruption or even as drastic as criminal support,” he added.
In Singapore, the Commercial Affairs Department (CAD) publishes the number of suspicious transaction reports it received in its annual report. The CAD is the police unit that deals with white-collar crime.
The CAD’s Suspicious Transaction Reporting Office received 32,660 reports in 2018, down 8 per cent from 35,471 reports in 2017, according to CAD’s 2018 annual report.
CAD noted that banks filed the most number of suspicious transaction reports – 16,314 – in 2018, followed by the 6,510 reports filed by casinos and 4,823 reports filed by moneychangers and remittance agents.
The consortium on Sunday released a list of banks in Singapore involved in the allegedly illicit transfers, based on more than 2,100 reports amounting to some $35 billion, that were filed by about 90 financial institutions. A report may contain multiple transactions.
The list “displays cases where sufficient details about both the originator and beneficiary banks were available, and is designed to illustrate how potentially dirty money flows from country to country around the world, via US-based banks”, said the ICIJ.
The consortium reported that five global banks appeared most often in the leaked documents – HSBC Bank, JPMorgan, Deutsche Bank, Standard Chartered and Bank of New York Mellon.
In Singapore, DBS Bank was listed as having sent US$596.8 million and received US$228.3 million in 461 suspicious transactions between 2000 and 2017.
CIMB Bank was noted to have sent US$250.4 million and received US$34.3 million in 294 suspicious transactions, while Deutsche Bank sent US$224.3 million and received US$62 million in 19 suspicious transactions within the same period.
A DBS spokesman told ST that the bank has “zero tolerance for bad actors abusing the financial system” and is firm on collaborating with the authorities in the seizure of funds and disruption of criminal networks.
“Outside of sanctions on names or specific account freezes, it is generally very difficult to delay or intercept money in transit given the impact on legitimate business, so the normal process – which happens behind the scenes – involves subsequent investigations to establish suspicion, based on which the necessary action is taken,” he added.
CIMB Singapore “operates in compliance with the anti-money laundering laws, regulations and guidelines issued by the Monetary Authority of Singapore”, a bank spokesman said in response to queries. He added that the bank is investigating the matter.
Deutsche Bank noted that it has invested billions of dollars to more support the authorities in this effort. “Naturally, this leads to increased detection levels,” it said in a statement.
The German bank has “devoted significant resources to strengthening our controls and we are very focused on meeting our responsibilities and obligations”, it added.