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CORRUPTION

Second Swiss bank shut down in Singapore

Singapore's central bank on Tuesday shut down a second Swiss bank under investigation for alleged money-laundering activities linked to Malaysian state fund 1MDB as it vowed strong action against potential violators.

Published: 11 October 2016 08:34 CEST
Second Swiss bank shut down in Singapore
Falcon Bank office in Singapore. Photo: Roslan Rahman/AFP

The Monetary Authority of Singapore (MAS) said it had ordered Falcon Bank to cease operations in the city-state because of “serious failures in anti-money-laundering (AML) controls and improper conduct” by senior management both at the head office in Switzerland and the local branch.
   
“Falcon Bank has demonstrated a persistent and severe lack of understanding of MAS AML requirements and expectations,” it said in a statement.
   
“Taking into account the totality of Falcon Bank's conduct, MAS' assessment is that the merchant bank will be unable to comply with these requirements and expectations going forward.”
   
The central bank said it imposed financial penalties totalling Sg$4.3 million (US$3.1 million) on Falcon Bank for 14 breaches of a law on preventing money laundering and countering the financing of terrorism.
   
MAS also said it received information that Falcon Bank's Singapore branch manager, Jens Sturzenegger, had been arrested on October 5th by the Commercial Affairs Department (CAD), the Singapore government's main white-collar crime investigation agency.
   
Singapore, a regional financial hub, last year launched a probe into alleged illicit fund flows linked to 1MDB.
   
Allegations of misappropriations of millions of dollars from 1MDB have triggered a corruption scandal in neighbouring Malaysia that has embroiled Prime Minister Najib Razak. Both Najib and 1MDB have strongly denied any wrongdoing.
   
Switzerland and the United States are also conducting their own investigations into 1MDB.
   
MAS announced that it has also fined local bank DBS and Swiss lender UBS for several breaches of anti-money laundering requirements.

Aggressive action

It said the “control lapses observed in DBS and UBS relate to specific bank officers who failed to carry out their duties effectively” and that it did not find “pervasive control weaknesses” in these banks.
   
DBS was ordered to pay Sg$1 million for 10 violations while UBS was ordered to pay Sg$1.3 million for 13 breaches.
   
The regulator in May kicked out Swiss bank BSI for similar violations linked to the 1MDB probe, the first time it ordered a bank to shut in 32 years.
   
At least three former BSI private bankers have been charged in Singapore in relation to the investigations.
   
In July, Singapore authorities said they had seized nearly $180 million in assets through investigations into the 1MDB scandal.
   
Singapore closely guards its reputation for financial integrity and has admitted that money laundering hurts its image.
   
The Paris-based financial watchdog Financial Action Task Force last month urged Singapore to take more aggressive action against complex cross-border money laundering.
   
MAS chief Ravi Menon said on Tuesday that “keeping Singapore a clean and trusted financial centre is a shared responsibility” and urged bank senior management to play a crucial role.
   
“They must set the tone from the top — that profits do not come before right conduct,” he said, warning that the MAS “will take strong deterrent actions against institutions that fall short”.
   
The MAS also said it is in the final stages of assessment for the Singapore branch of Standard Chartered Bank and has referred Raffles Money Change, a local financial company, for investigation by the CAD.
   
The MAS said clients are assured that Falcon Bank, which is a branch of Falcon Private Bank Ltd in Switzerland, “has the full support of its head office, which is financially sound”.
   
Falcon Private Bank is owned by the International Petroleum Investment Company from Abu Dhabi, one of the world's leading sovereign wealth funds.

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MONEY

Is it easy for a foreign resident get a loan in Switzerland?

When it comes to borrowing money from a Swiss bank, nationality may play a role in some cases, but not in others. This is what you should know about this process.

Published: 3 June 2021 12:31 CEST
Updated: 26 February 2024 11:24 CET
Is it easy for a foreign resident get a loan in Switzerland?
Getting a losn in Switzerland is subject to many conditions. Photo by Claudio Schwarz/Unsplash

Like almost everything in Switzerland, consumer loans are regulated by legislation, in this case the Consumer Credit Act.

It defines a loan as between 550 and 80,000 francs, “offered by commercial providers of financial services”. Lower or higher amounts are not subject to the Consumer Credit Act.

As is the case in many other countries, Swiss banks have strict criteria about who they lend money to. After all, no financial institution wants to deal with people who are not creditworthy.

Whether or not a foreign national can borrow money from a bank depends on their permanent place of residence and permit status.

As a rule, Swiss lenders don’t give loans to non-residents. So if you reside abroad, there is practically no chance that a bank in Switzerland will lend you money.

However, some financial institutions make exceptions for cross-border workers. If you fall under this category, you can use this interactive tool, select “ Permit G” under “Residence Permit” and see what, if any, options, there are.

READ MORE: EXPLAINED: What cross-border workers should know about taxation in Switzerland

If you are a foreign national but have a permanent residence status (Permit C), your chances of getting a loan are practically the same as those of Swiss citizens — provided, of course, that you meet all the requirements set by lenders (see below).

What about other permit holders?

If you have a B Permit, you might be approved for a loan, depending on how long you have had this permit — obviously, the longer the better.

However, “you may be offered a higher interest rate or a limited loan amount. This is because of the statistically higher probability that you will return to your home country. Some lenders require the loan to be repaid by the time the B permit expires”, according to consumer comparison site comparis.ch 

Holders of other, temporary or conditional permits are not accepted.

What conditions — other than residence permit — should you fill to be considered for a loan?

You must be at least 18 years of age, though additional restrictions may apply to applicants under 25 — for instance, a higher interest rate or a limited loan amount. That’s because “lenders are generally more cautious with young applicants as their financial circumstances are usually less settled and the risk of default is deemed to be higher,” Comparis noted.

The same cautious approach applies to pensioners, especially those who have no regular income. The social security payments (AHV/AVS) do not count as income for the purpose of the loan.

There is also other eligibility criteria, based on employment status and salary. People with a regular income have a higher chance of obtaining a loan than those who are self-employed, temporarily employed, work on hourly basis or, logically, unemployed.

Other factors, including your existing debts, are also taken into account in the decision process.

Basically, lenders favour applicants with a stable income and good financial standing, in much the same way as supplemental health insurance carriers prefer young and healthy people.

Keep in mind that if your loan application is rejected, this will be recorded in the database of the  Central Office for Credit Information, making it more difficult, though not impossible, to get a loan in the future.

READ ALSO: Does having a good credit score matter in Switzerland?

The same rules do not apply to American citizens

That’s because Swiss and European banks are subjected to US demands to disclose the assets of Americans overseas in order to prevent tax evasion.

As adherence to these requirements is a major headache for the banks and in some cases also violates their country’s privacy laws, financial institutions prefer not to deal with Americans at all, even those who are permanent residents.

If you are a US citizen who also has Swiss nationality, you may have an easier time of it, but could still face hurdles in obtaining loans and other banking services.

There is no immediate relief in sight, although many organisations representing Americans abroad are lobbying in Washington to change the existing legislation.

READ ALSO: Why are Americans being turned away from Swiss banks?

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