Anti-Money Laundering (AML) Legislation: A Bank's Liability in Complying

By Chuan Thye Tan; Daniel Chia

In the recent related English cases of Shah v HSBC (UK) Ltd [2009] EWHC 79; Shah v HSBC (UK) Ltd [2010] EWHC Civ 31; Shah v HSBC (UK) Ltd [2011] EWHC 1713; Shah v HSBC (UK) Ltd [2011] EWCA Civ 1154; Shah v HSBC (UK) Ltd [2011] EWHC Civ 1669, the English Courts were faced with the question of whether a bank could be liable to its customers for taking its time to verify the source of funds in compliance with its obligations under AML legislation. A subsidiary issue related to whether the bank was obliged to disclose the identity of its employees who had first raised concerns over the source of funds and whether it was appropriate that the suspicions of such employees be tested at trial under cross examination.

Although the decision is not binding on Singapore Courts and English AML legislation is different from Singapore's, the...