Singapore bank DBS said last night it was generally difficult to stop questionable transactions by businesses outside of sanctions or account freezes but may take action on suspicious financial activities after they occur.
DBS was named in the bulk of at least 461 transactions mentioned in data leaked from a US financial crimes agency and reported by BuzzFeed. The data, which was largely based on suspicious activity reports filed to the U.S. government, traced over US$2 trillion worth of suspicious transactions that moved around the globe from 2007 to 2017.
In response to queries on the reported transactions, DBS, one of the largest banks in Singapore, said it was difficult to disrupt transactions as they happen as it would affect legitimate business. But the bank said that it could take action later on when such transactions are established to be suspicious.
“We note that 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,” the DBS statement said.
It added that it has “zero tolerance for bad actors abusing the financial system” and stands “united with the financial industry in collaborating with authorities to seize funds and disrupt criminal networks.”
Yet evading sanctions is exactly what banks helped facilitate, according to Buzzfeed’s report. Weak or lax government regulation combined with self-policing by the financial industry allow it to be used for moving vast sums of dark money by those seeking to shroud illicit wealth and launder money.
That was the conclusion of data comprised of 1,781 transactions cited in leaked reports from the U.S. Financial Crimes Enforcement Network, or FinCEN, that named Singaporean banks DBS, UOB, and OCBC among those that helped to move billions of dollars between Singapore, the United States, and 46 other countries.
On Feb. 5, 2014, for example, a transaction flagged as suspicious in the amount of US$40 million was moved from Swiss bank BSI to DBS Bank Ltd. On Dec. 4, 2015, about US$13 million was transferred from OCBC to Credit Suisse. From March to April 2016, more than US$12 million was moved from DBS to UOB via five transactions deemed dubious.
UOB did not explain why such transactions took place but reiterated to Coconuts Singapore last night its internal processes for dealing with suspicious transactions, which involve “risk assessment, customer and counter party due diligence, transactions monitoring as well as investigating and reporting potential suspicious activities to the relevant regulatory bodies.
“We continue to enhance our anti-money laundering capabilities through the use of technologies including artificial intelligence and machine learning,” its statement said.
The Monetary Authority of Singapore said it was monitoring media reports on the FinCEN data and would take “appropriate action” based on the outcome of their review.
The U.S. government documents, which add up to 22,000 pages, were released amid investigations into matters including the 2016 presidential election. Buzzfeed found they included more than 2,000 suspicious activity reports, which it said had linked the world’s largest financial institutions to transnational crime including human trafficking and drug cartels.
It also said the documents show FinCEN is aware of the level of crime enabled by the global banking system but does nothing to rein it in.
The activity reports filed to the agency come from financial institutions when they suspect that a transaction may be linked to money laundering or other illegal activities. The reports may support further investigation but do not serve as evidence of crime, it said.