The Hong Kong Monetary Authority (HKMA) has announced a disciplinary action against DBS Bank (Hong Kong) Limited (DBSHK) by imposing a significant monetary fine of HK$10 million. According to the Hong Kong Monetary Authority, the fine was imposed for breaches of the Anti-Money Laundering and Countering the Financing of Terrorism Ordinance (AMLO).
result
The HKMA’s investigation found a number of deficiencies in DBSHK’s compliance systems, including a failure to continuously monitor business relationships between April 2012 and April 2019, a failure to conduct enhanced due diligence in high-risk situations, and a failure to maintain adequate records for some clients. DBSHK also did not have adequate procedures in place to comply with its obligations under AMLO during this period.
Factors considered in disciplinary action
Financial authorities took into account a number of factors when deciding on disciplinary action.
- The severity of the findings.
- The need to send a clear deterrent message to the industry about the importance of effective controls to combat money laundering and terrorist financing.
- Corrective action taken by DBSHK to address identified deficiencies and improve compliance measures.
- DBSHK has no prior disciplinary record involving AMLO and has not cooperated during the investigation and enforcement proceedings.
Official statement
Raymond Chan, HKMA’s Executive Director (Enforcement and AML), stressed the importance of effective customer due diligence measures to combat money laundering and terrorist financing. She said: “HKMA requires banks to implement effective customer due diligence measures to combat money laundering and terrorist financing. These measures should be reviewed regularly to ensure they are effective.”
Industrial significance
This disciplinary action sends a strong message to financial institutions about the importance of maintaining strong anti-money laundering and terrorist financing controls. It underscores the HKMA’s commitment to enforcing compliance and ensuring that financial institutions strictly adhere to regulatory requirements.
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