Targa Bank has been operating as a retail bank in Singapore, regulated by the MAS, for six years TB’s parent company is based in London: Diploma in Financial Crime Compliance Assignment, SUSS, Singapore

Scenario

Targa Bank (TB) has been operating as a retail bank in Singapore, regulated by the MAS, for six years. TB’s parent company is based in London, England, and has been operating in The UK for eight years. The bank’s last annual report reaffirmed the board’s commitment to continue aggressive expansion throughout the UK and Singapore and an objective to open branches in other jurisdictions. You have worked in the Singapore branch compliance department for three years.

In the last annual report, issued in April 2021, the board reaffirmed their 2020 to 2023 strategy, which specifically included:

• Embrace technology by building an integrated payment solution to increase
  customer ease of access.
• To increase revenue by 20% and profits by 30%.
• Further, increase shareholder value by reducing overheads.
• Open branches in Africa and Malaysia.
• Launch a series of new products aimed at the high-net-worth market.

At 5 pm yesterday you were called to attend a meeting with the compliance director. As you headed to the meeting room you noticed all the staff heading to various large meeting rooms although nobody was aware of the purpose of these meetings.

Once seated, the compliance director announced that all staff had been called in to meet their department heads to be advised that the morning news would report that the MAS has handed TB a composition the penalty of S$1.2 million for AML/CFT failures.

She outlined the issues that led to the penalty and sought to reassure her staff that the lapses are historic and that the firm is fully committed to improving matters within two years.

The specific issues identified were:

• Failed to adequately investigate unusually large or unusual patterns of customer transactions that appeared to serve no obvious economic purpose or objective.
• TB failed to establish, by appropriate and reasonable means, basic information such as the source of wealth and source of funds before onboarding customers who presented a higher risk of money laundering or terrorism financing.
• Often relied on the customers’ declarations, without obtaining further information to corroborate them.
• Senior management had very poor and ineffective oversight and contributed to unacceptable risk culture.
• During the onboarding of new customers, TB failed to include geographic risk as a factor when deciding the level of customer risk.