The Hong Kong Monetary Authority (HKMA) has fined Cathay United Bank’s Hong Kong branch HK$11m following an investigation.
The HKMA completed the disciplinary proceedings for Cathay under the AML and CTF Ordinance of Hong Kong, with Cathay fined due to contraventions of the AMLO.
The disciplinary action follows an on-site examination and investigation by the HKMA on CUBHK’s systems and controls for compliance with the AMLO.
According to HKMA, the control deficiencies identified in the investigation relate to conducting ongoing customer due diligence and enhanced due diligence in respect of high-risk situations between April 2012 and February 2016.
CUBHK failed to establish and maintain effective procedures for carrying out its duties under the AMLO in relation to ongoing CDD and EDD during that period.
In addition, CUBHK was found to have failed to take all reasonable measures to ensure proper safeguards exist to prevent the contraventions and to mitigate money laundering or terrorist financing risks.
HKMA executive director of enforcement and AML Carmen Chu said, “Senior management oversight is a vital part of effective ML/TF risk management framework of banks. In discharging the relevant legal and regulatory obligations, banks should have a clear understanding of risks and ensure adequate resources to support timely and proactive follow-up of anti-money laundering and counter-financing of terrorism-related issues, with effective coordination across the entire institution.
“Banks should make reference to the HKMA’s relevant guidelines and circulars in adopting appropriate governance systems for ML/TF risk management.”
The Hong Kong government recently revealed it was planning to bring in a range of financial incentives to address skill shortages in the FinTech sector.
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