The Hong Kong Monetary Authority (HKMA) has concluded an investigation and imposed a HK$10 million penalty on DBS Bank (Hong Kong) Limited (DBSHK) for breaches of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).

The investigation by HKMA revealed deficiencies in DBS Bank (Hong Kong)’s systems and controls for AMLO compliance.

Specifically, DBSHK failed to continuously monitor business relationships, conduct enhanced due diligence in high-risk situations between April 2012 and April 2019, and maintain proper records for some customers.

The bank also did not have effective procedures to fulfill its duties under the AMLO.

In deciding the disciplinary action, the HKMA considered several factors: the seriousness of the investigation findings; and the need to send a clear deterrent message to the industry about the importance of effective controls and procedures to address money laundering and terrorist financing risks.

This also included the remedial actions taken by DBSHK to address identified deficiencies and efforts to improve its anti-money laundering and counter-financing of terrorism controls and DBSHK’s cooperation with the HKMA during the investigation and enforcement proceedings, as well as its lack of previous disciplinary records under the AMLO.

Raymond Chan

“The HKMA requires banks to put in place effective customer due diligence measures to combat money laundering and terrorist financing.   These measures should be subject to regular review to ensure that they remain effective,”

said Raymond Chan, Executive Director (Enforcement and AML) of the HKMA.

Featured image credit: Edited from DBS