Falcon Bank closes its Singapore branch because of Malaysian scandal

Falcon Bank has to close his branch in Singapore. The Monetary Authority of Singapore (MAS) announced on Tuesday it had ordered Falcon Bank to cease its operations in the city-state because of a "serious failures in anti-money laundering (AML) controls and improper conduct by senior management at the head office in Switzerland as well as the Singapore branch".

It has fined Falcon Bank S$4.3 million for breaches including "failures to adequately assess irregularities in activities pertaining to customer accounts, and file suspicious transaction reports", it said.

MAS is also imposing financial penalties on DBS Bank and UBS, Singapore Branch (UBS) for breaches of MAS' AML requirements, though it added that it "did not find pervasive control weaknesses" within these banks and the "control lapses" it found in DBS and UBS "relate to specific bank officers".

The Swiss Financial Market Supervisory Authority (FINMA) likewise said it found Falcon Private Bank had failed to carry out adequate background checks into transactions and business relationships. It fined Falcon 2.5 million Swiss francs ($2.5 million) and banned it from dealing with "foreign, politically exposed persons" for three years. Any further breaches would cause its license to be withdrawn, FINMA said in a statement.

"The issues surrounding 1MDB form one of the largest cases of suspected corruption in recent times," Finma CEO Mark Branson said in the statement. "The global financial system has been blatantly misused."

Falcon Bank said in a statement on Tuesday morning that although the withdrawal of banking licence was "regrettable and disappointing, the decision will not impact the strategic development of the bank". "The bank will now focus again on growing our businesses in the core locations Switzerland, Middle East and London," added CEO Walter Berchtold. The bank currently has around 35 employees in Singapore.