BNM fines company, 2 banks over sanctions breaches

 The central bank says the enforcement actions were in line with its Enforcement Approach involving groups flagged by the government for money laundering or terrorism financing.

Bank Negara Malaysia said the parties involved have strengthened their screening controls to ensure compliance with its targeted financial sanctions requirements.

KUALA LUMPUR:

Bank Negara Malaysia has imposed administrative monetary penalties on a fintech company and two banks for failing to comply with its targeted financial sanctions requirements.

BNM said it imposed a RM637,500 penalty on Setel Ventures Sdn Bhd on April 15 for failing to immediately update its sanctions database following the publication of BNM’s Domestic List, an official register of people and groups flagged by the government for money laundering or terrorism financing.

“Setel failed to conduct sanctions screening of customers in its database and subsequently failed to ascertain whether potential matches were true matches,” it said in a statement.

BNM said the breaches were attributed to gaps in Setel’s SOPs and sanctions screening system.

“However, Setel has since taken remedial measures by updating and rectifying gaps in its SOPs and enhancing its internal systems to ensure compliance with the TFS requirements,” it said.

It said Setel paid RM637,500 for the penalty imposed on May 6.

In a separate statement, BNM said it also imposed an administrative monetary penalty of RM132,000 each on Standard Chartered Bank Malaysia and Standard Chartered Saadiq after they failed to update their sanctions databases without delay following the publication of the Domestic List.

“This resulted in sanctions screening being conducted against an outdated database. Nonetheless, no specified entities were onboarded, and no transactions involving such entities were facilitated by either bank.

“These breaches were attributed to gaps in the banks’ sanctions screening controls, as well as deficiencies in ensuring that the screening process aligned with regulatory requirements,” it said.

The central bank noted that both banks had since taken remedial measures to strengthen their controls and improve the effectiveness of their sanctions screening management, including strengthening oversight and enhancing the timeliness of their sanctions screening controls to ensure compliance with TFS requirements.

“On June 15, Standard Chartered Bank and Standard Chartered Saadiq each paid RM132,000 for the AMP imposed by BNM,” it said.

BNM said the enforcement actions were in line with the approach and processes outlined in its published Enforcement Approach. - FMT