Hong Kong Monetary Authority Fines DBS Bank Hong Kong $1.2 Million for Money-Laundering Failures, Failed to Monitor Business Relationships & Conduct Enhanced Due Diligence in High Risk Situations Between 2012 to 2019
9th July 2024 | Hong Kong
The Hong Kong Monetary Authority (HKMA) has fined DBS Bank Hong Kong $1.2 million (HKD 10 million) for money-laundering failures, failing to monitor business relationships & conduct enhanced due diligence in high risk situations between 2012 to 2019. Details of HKMA investigation on DBS Bank: “DBSHK failed to obtain the copies of the identity document of 609 IDEAL Authorizers (i.e. an individual authorized by the customer to approve transactions and considered a person purporting to act on behalf of the customer) (IDEAL Authorizer) who were registered by 477 corporate customers on or before 30 July 2017, and that no identity verification was conducted against these IDEAL Authorizers during the period from 1 April 2012 to 30 July 2017. DBSHK failed to duly complete the trigger event review of customer due diligence (CDD) documents of 23 customers during the period from 1 October 2017 to 30 April 2019, which resulted in customers’ documents, data and information not being relevant or up-to-date for a prolonged period of time … … DBSHK failed to take reasonable measures to establish the source of wealth (SoW) and the source of funds (SoF) of high risk customers, or take additional measures to mitigate the risk of money laundering or terrorist financing involved in the business relationship of 15 customers during the period from 1 December 2018 to 28 February 2019.” HKMA (5/7/24): “The Hong Kong Monetary Authority (HKMA) announced today (5 July) that it had completed an investigation and disciplinary proceedings for DBS Bank (Hong Kong) Limited (DBSHK) under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615 of the Laws of Hong Kong) (AMLO) (Note 1). The Monetary Authority (MA) has imposed a pecuniary penalty of HK$10,000,000 against DBSHK for contraventions of the AMLO. The disciplinary action (Note 2) follows an investigation by the HKMA on DBSHK’s systems and controls for compliance with the AMLO. The control deficiencies identified in the investigation relate to DBSHK’s failure to continuously monitor business relationships and conduct enhanced due diligence in high risk situations during various periods between April 2012 and April 2019, as well as its failure to keep records in respect of some of the customers. DBSHK also failed to maintain effective procedures for carrying out its duties under the AMLO in relation to the aforementioned control deficiencies during this period. In deciding the disciplinary action, the MA has taken into account all relevant circumstances and factors, including the following: (a) the seriousness of the investigation findings; (b) 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; (c) remedial actions have been taken to address the deficiencies identified and efforts have been made to improve the bank’s anti-money laundering and counter-financing of terrorism controls; and (d) DBSHK has no previous disciplinary record in relation to the AMLO and cooperated with the HKMA during the investigation and enforcement proceedings.” Relevant link: Statement of Disciplinary Action
“ Hong Kong Monetary Authority Fines DBS Bank Hong Kong $1.2 Million for Money-Laundering Failures, Failed to Monitor Business Relationships & Conduct Enhanced Due Diligence in High Risk Situations Between 2012 to 2019 “
Raymond Chan, Executive Director (Enforcement and AML) of the HKMA: “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.”
Notes:
- Prior to 1 March 2018, the short title of Chapter 615 of the Laws of Hong Kong was the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance.
- The disciplinary action is taken under section 21 of the AMLO. The AMLO imposes customer due diligence and record-keeping requirements on specified financial institutions, including Authorized Institutions, and designated non-financial businesses and professions. As regards Authorized Institutions, the MA is the relevant authority under the AMLO.
Hong Kong Monetary Authority Fines DBS Bank Hong Kong $1.2 Million for Money-Laundering Failures, Failed to Monitor Business Relationships & Conduct Enhanced Due Diligence in High Risk Situations Between 2012 to 2019
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