Singapore Levies Major Penalties on Nine Banks in Billion-Dollar Money Laundering Case, Falls Short on Personal Liability
Last week, Singapore’s central bank, the Monetary Authority of Singapore (MAS), imposed collective fines totaling a whopping S$27.45 million ($21.5 million USD) against a total of nine financial institutions, a list including notable names such as UBS, Citibank, and Julius Baer Group, in connection with a major money laundering scandal that rocked the city-state in 2023. The penalty marks the second-largest collective penalty in Singapore’s history, just shy of the S$29.1 million in fines related to the infamous 1Malaysia Development Berhad (1MDB scandal) in 2017. The case, which reportedly involved over S$3 billion (US$2.2 billion) in illicit assets, has tarnished Singapore’s once prominent reputation as a largely-clean financial hub, while raising additional concerns about its government’s ambitions to remain a leading global wealth management center.
The 2023 scandal came to light following a massive police operation where 400 Singapore-based police officers conducted simultaneous raids across the country that ultimately resulted in the seizure of S$1 billion (US$734 million USD) in total assets. This grouping included a total of 94 properties and 50 luxury vehicles seized, as well as S$23 million in cash, S$110 million from bank accounts, and saw hundreds of additional luxury items such as handbags, watches, jewelry, and two gold bars seized by the government. A total of ten foreign nationals from China, Cambodia, Cyprus, and Vanuatu, were arrested as part of the case after their ties to the laundering of proceeds from various overseas scams and online gambling came to light, with the perpetrators receiving respective jail terms of between 13 and 17 months, and the non-nationals deported and barred from Singapore after the completion of their sentences.2 12 other individuals with ties to the long-running scheme have assisted in the ongoing investigations to date, while eight more remain wanted by federal authorities.
During their investigations, Singapore’s top regulator identified significant deficiencies in the above-mentioned financial firms’ anti-money laundering (AML) controls, including inadequate customer risk assessments, failure to verify clients’ sources of wealth, and poor handling of suspicious transactions. The regulator also named executives and relationship managers at United Overseas Bank and smaller institutions for issues including a failure to establish their customers’ source of wealth.1 Credit Suisse, which has since been acquired by UBS, faced the heaviest individual fine for their transgressions at S$5.8 million, followed by the UBS at S$3 million and Citibank at S$2.6 million. Other penalized institutions included United Overseas Bank (UOB), LGT Bank, UOB Kay Hian, Blue Ocean Invest, and Trident Trust Company, with fines ranging from S$1 million to S$5.6 million.
The penalties officially mark the conclusion of the central bank’s enforcement actions against the named institutions, though additional remediation actions were called for and ultimately taken by several of the firms involved over the past two years, namely with respect to addressing their shortcomings in the realms of transaction monitoring and customer due diligence. UOB, UBS, Citibank, Julius Baer, and LGT Bank openly reported their efforts taken to strengthen their onboarding safeguards and both their transaction and customer monitoring processes, while Blue Ocean Invest and Trident Trust introduced updated measures to bolster their internal policies to avoid facilitating illicit financial flows in the future.
While these developments are largely positive, the government of Singapore has received criticism for failing to prosecute the individual bank staffers who played key roles in allowing this illicit activity to slip through the cracks. As is the case in the American compliance market, personal liability for compliance failures has become a growing trend, and one that has provided a major boon to the fight against money laundering activity. The increase in regulatory scrutiny over those operating in the financial realm has significantly raised the stakes when it comes adequately completing one’s responsibilities when serving on the frontlines of compliance screening. The fear of facing individual financial penalties, reputational damage, and even imprisonment for compliance failures has helped to foster increased operational efficiency in this sector over years past. These risks have however also served as a deterrent to some extent that has repelled potential new talent from entering this field.
Further, this case underscores the challenges Singapore faces as a major financial center exposed to money laundering risks. While the country remains appealing to foreign investors – as evidenced by its national increase in total assets under management by 16% to S$5.4 trillion in 2021 alone – its ability to maintain balance with upholding stringent AML regulations appears to be lacking. In June 2024, the national government identified the banking sector as the city-state’s highest money laundering risk in line with the aforementioned case, prompting a need for stronger enforcement measures. Thus far however, it appears this response is lacking.
Citations
- Alim, Arjun Neil. “UBS and Citi among Nine Banks Fined $21.5mn in Singapore Money-Laundering Case.” Financial Times, 4 July 2025.
- Yung, Jun Yuan. “Singapore Penalises Nine Financial Institutions over 2023 Money Laundering Case | Reuters.” Reuters, Thomson Reuters, 4 July 2025.