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Singapore and Hong Kong were the top destinations for suspicious transactions in Asia, despite the fact that financial centers saw only a small fraction of an estimated $ 2 trillion in potentially dubious money flows revealed in a report.
Singapore processed $ 4.4 billion in suspicious flows through banks, including DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and United Overseas Bank Ltd., the International Consortium of Investigative Journalists said in an investigation published Sunday. Some $ 4.1 billion was handled in Hong Kong by lenders, including HSBC Holdings Plc and Deutsche Bank AG said.
The two banking centers are followed by China and India in Asia in terms of the size of the suspicious flows, according to the report based on a trove of documents leaked to BuzzFeed News. The documents detail more than $ 2 trillion in transactions between 1999 and 2017 that were flagged by internal compliance officers at financial institutions as possible money laundering or other criminal activity.
The banks involved in the transactions are among the global firms that benefited from “powerful and dangerous players” even after the United States imposed sanctions on the institutions, according to the report.
Also Read: Bank Stocks Fall With $ 2 Trillion Of Suspicious Flows Under Scrutiny
the The Monetary Authority of Singapore is “closely studying” the disclosures and “will take appropriate action based on the outcome” of its review, it said in an emailed statement on Tuesday.
The Hong Kong Monetary Authority said it was also aware of the report, but does not discuss individual cases. The city’s framework for combating money laundering and the fight against terrorist financing is “effective and in line with international standards,” a spokeswoman said in an email.
Banking stocks were hit by the revelations that added to a litany of troubles for HSBC, pushing Europe’s largest bank to the lowest in more than two decades. Banks in Singapore also fell, and DBS shares extended their loss for the year to 24% on Tuesday.
In an emailed statement, DBS said it has “zero tolerance for bad actors who abuse the financial system” but that it is “generally very difficult to delay or intercept money in transit” unless there are naming sanctions or freezing of accounts. “The normal process, which occurs behind the scenes, involves subsequent investigations to establish suspicions, from which the necessary actions are taken.”
OCBC and UOB said that their frameworks for detecting illicit flows are “robust” and that they continue to improve their technology for detecting money laundering. UOB said it complies “with all applicable laws, rules and regulations in the markets in which we operate.”
HSBC said on Monday it began a “multi-year journey” eight years ago to review its ability to combat financial crime in more than 60 jurisdictions, making it “a much safer institution than in 2012.”
Reacting to the report, Deutsche Bank said ICIJ raised “a number of historical issues” and those related to the bank are “well known” to regulators. “The problems have already been investigated and led to regulatory resolutions in which the bank’s cooperation and redress was publicly acknowledged,” he said.
