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[SINGAPORE] Authorities in Singapore appear to be kicking it up a notch, as they round up more individuals and entities for their involvement in a S$3 billion money laundering scandal unveiled in August 2023.

To be clear, action against the 10 foreigners at the heart of the scandal that sent shockwaves across the Republic has long been concluded. By around this time last year, all 10 had finished serving their time in jail; they have since been deported and barred from re-entering Singapore.

But the anti-money laundering (AML) war is far from over.

On Jul 1, the Council for Estate Agents fined two property agents for their failure to conduct customer due diligence measures on clients who were connected to the case.

Then, on Jul 14, the Ministry of Finance (MOF) and the Accounting and Corporate Regulatory Authority proposed amendments to help strengthen Singapore’s corporate framework, including the barring of those who have been convicted of money laundering offences from serving as a company director.

Just a day later, the Ministry of Law said that it was investigating 24 law firms for their involvement in the conveyancing of real estate properties seized in the 2023 bust.

Also in July, the Monetary Authority of Singapore (MAS) issued penalties totalling S$27.5 million to nine financial institutions (FIs) for AML-related breaches.

The penalties took into account various factors, including the extent of the FIs’ exposure to the persons of interest, the number of breaches of AML requirements, and the degree of weakness in the FIs’ AML controls.

By Singapore’s standards, this is no small sum. This is likely the largest penalty that MAS has meted out since the 1MDB scandal in 2017. Then, MAS shut down two banks, and imposed total financial penalties of S$29.1 million on eight banks for various breaches of AML requirements.

But some observers noted that the financial penalties may appear small when compared to the total quantum of the case.

With S$3 billion worth of assets involved, the money laundering case is the largest that Singapore has ever seen. It came as a shock to many, given the country’s image of having a reliable, transparent and stable financial system.

Breaking down the penalties, Credit Suisse received the highest penalty at S$5.8 million, followed by UOB – the only local bank on the list – at S$5.6 million. LGT Bank received the lowest penalties among the nine, at S$1 million.

For most banks, whose profits are in the billions, the penalties are unlikely to hurt their bottom lines – and could even be seen as little more than a slap on the wrist.

For instance, UOB clocked a net profit of S$6 billion in 2024, while UBS – which took over Credit Suisse in 2023 – saw a net profit of S$5.1 billion in the same year.

Granted, MAS does not oversee the offence of money laundering itself; that is a job for the criminal courts. What it does look after is the degree of AML control that FIs have, and how compliant they are with MAS’ AML requirements.

In response to queries on whether the penalties are adequate, an MAS spokesperson said that the penalties are “appropriate to the extent and severity of the breaches”.

The spokesperson added: “In determining whether enforcement action is warranted, MAS takes into account whether the deficiencies amount to significant breaches, and the degree of weakness in the FI’s AML controls.”

MAS pointed out that most of the FIs had established AML policies and controls, with the breaches arising out of “poor or inconsistent implementation”.

Yet regulators elsewhere have issued larger penalties on FIs for AML breaches as well.

For example, in 2024, TD Bank was fined over US$3 billion in the US for failing to comply with AML requirements.

In 2022, Danske Bank was fined US$2 billion by the US Department of Justice, or suspected money laundering at its former branch in Estonia, in what was one of the largest money laundering scandals in Europe.

Meanwhile, Standard Chartered Bank in 2019 was fined US$1.1 billion by US and UK authorities for poor AML controls.

Some observers also pointed out that the penalties imposed by MAS were mostly imposed on international FIs, despite the involvement of other local banks – including DBS and OCBC – in earlier investigations.

For example, during DBS’ 2023 third-quarter results briefing, then-CEO Piyush Gupta said that the lender had around S$100 million in exposure to the money laundering case.

In response to that, MAS deputy chairman Chee Hong Tat said that MAS will assess “fairly and objectively” the severity of the different offences when it comes to regulatory cases.

He added: “It’s not whether it is a local or international financial institution, but it is about the nature, extent and severity of the lapses and offences that have been committed.”

Clearly, Singapore is sending a message that it does not take AML breaches lightly.

But, perhaps, as the Republic tightens AML controls across the financial ecosystem, it will need to strike that balance between remaining business-friendly yet tough on transgressions.