The Hong Kong Monetary Authority (HKMA) has concluded an investigation and disciplinary proceedings against Hua Nan Commercial Bank, Ltd., Hong Kong Branch (HNCBHK) for violations of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO). As a result, HNCBHK has been fined HK$9,000,000. The investigation revealed control deficiencies in HNCBHK’s compliance with the AMLO, specifically regarding the continuous monitoring of business relationships with customers between April 2012 and July 2018, as well as the recording of recipient names in cross-border outgoing wire transfers between March 1 and July 9, 2018.
In determining the disciplinary action, the HKMA considered various factors, including the seriousness and duration of the contraventions, the need to send a strong message regarding effective controls and procedures to address money laundering and terrorist financing risks, HNCBHK’s self-identification of deficiencies and proactive reporting, remedial measures taken, lack of previous disciplinary record, and cooperation during the enforcement proceedings. Ms. Carmen Chu, Executive Director (Enforcement and AML) of the HKMA emphasized the importance of ongoing monitoring of customer relationships by authorized institutions, highlighting the role it plays in detecting and reporting potential money laundering activities and safeguarding the integrity of the banking system. AIs are urged to maintain risk-based policies, provide guidance and training to staff, update risk assessments, and regularly review the adequacy and effectiveness of transaction monitoring systems using appropriate innovation and technology.
Resources: https://www.hkma.gov.hk/eng/news-and-media/press-releases/2024/04/20240419-5/