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CREDIT SUISSE

Swiss bank fined by Singapore for breaching money-laundering laws

Singapore said on Tuesday it had fined Credit Suisse and a local lender for breaches of the city-state's anti-money laundering laws relating to a corruption scandal at Malaysian state fund 1MDB.

Swiss bank fined by Singapore for breaching money-laundering laws
Photo: Fabrice Coffrini/AFP
The Monetary Authority of Singapore (MAS), the country's central bank, said it also imposed lifetime bans on two bankers and a 15-year prohibition order on a third following a two-year review of lenders involved in 1MDB-related transactions.
   
The Swiss giant was fined Sg$700,000 ($505,000) and United Overseas Bank was penalized Sg$900,000 for breaching anti-money laundering laws and for control lapses related to fund flows involving 1MDB, the MAS said in a statement.
   
“These include weaknesses in conducting due diligence on customers and inadequate scrutiny of customers' transactions and activities,” the statement said, adding however that MAS did not detect “pervasive control weaknesses within” the two banks.
   
MAS also directed the banks “to appoint independent parties to assess and confirm… that rectification measures have been effectively implemented” and punish errant staff.
   
Allegations that huge sums were misappropriated from 1MDB triggered a scandal in Malaysia that has embroiled Prime Minister Najib Razak, though he has denied any wrongdoing.
   
Singapore, a regional financial centre known for its tough stance against corruption, launched a probe following allegations that its financial system was used to move illicit funds.
   
Four private bankers have been jailed so far as Singapore became the first country to hand down criminal convictions related to the 1MDB investigations.
   
The United States and Switzerland have also launched their own probes.
   
Two bankers, including Swiss national Jens Fred Sturzenegger, were slapped with lifetime bans from doing business in Singapore's financial industry and a third was banned for 15 years, the central bank said.
   
MAS added it intends to issue bans on three other people. Previously, MAS banned a former Goldman Sachs banker from working in the city-state's financial industry for ten years.
   
MAS said its review of financial institutions involved in 1MDB-related flows “is the most extensive it has ever taken”.
   
“The review uncovered a complex web of transactions involving numerous shell companies and individuals operating in multiple jurisdictions, including the United States, Switzerland, Hong Kong, Luxembourg and Malaysia,” it added.
   
Singapore has also closed the local branches of two Swiss private banks — BSI and Falcon Private Bank — used in the transfer of illicit funds.
   
“Our financial industry is in a better position today than it was when the abuses stemming from the 1MDB-related flows took place,” MAS managing director Ravi Menon said.
   
“The price for keeping our financial centre clean as it grows in size and inter-connectedness is unstinting vigilance.”

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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.

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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