OCBC private-bank unit fined $1.12 million by Dubai for inadequate financial controls linked to money laundering

The Dubai Financial Services Authority (DFSA) has imposed a fine of $1,120,000 (AED 4,113,200) on the DIFC branch of Bank of Singapore Limited (the Bank) for a number of contraventions of DFSA legislation, including for having inadequate systems and controls including those relating to anti-money laundering (AML).

The amount of the fine was reduced because the Bank offered the DFSA an Enforceable Undertaking (EU) to remediate the failings and agreed to settle the matter, reducing the fine amount from USD 2,000,000 (AED 7,345,000).

The DFSA found deficiencies in the Bank’s:

• AML business risk assessments;
• assessment of the risks posed by its Clients;
• Customer Due Diligence (CDD) and Enhanced CDD practices;
• identification of its Clients’ sources of wealth and sources of funds; and
• suspicious activity reporting.

The DFSA also found that the Bank had acted outside the scope of its DFSA Licence by Arranging Deals in Investments in relation to rights under Long-Term Insurance contracts, when not authorised to do so. The Bank has since applied to the DFSA for permission to do so.

The DFSA acknowledges that the Bank has also provided the DFSA with an EU in which the Bank agrees to:

· remedy the deficiencies in its systems and controls; and

· engage an external compliance expert to assist the Bank in complying with its obligations and to verify that the remediation has been completed.

Ian Johnston, Chief Executive of the DFSA, said: “The DFSA has a high degree of concern over any AML related contraventions and will take appropriate action to make sure that the systems and controls implemented by Authorised Firms operating in the DIFC are robust.”

Copies of the Decision Notices and Enforceable Undertaking setting out full details of this matter can be found in the Decision Notices section of the DFSA website.

Re-disseminated by The Wealth and Society