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Clifford Chance

Clifford Chance


HKMA Penalises Four Banks HK$44.2 Million For Money Laundering Control Failures: Key Takeaways

November 26, 2021

On 19 November 2021, the Hong Kong Monetary Authority (HKMA) announced that that it had completed investigations and disciplinary proceedings against four banks under the Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Ordinance (Cap. 615) (AMLO), imposing pecuniary penalties of a total of HK$44.2 million. This arose from a series of onsite examinations the HKMA conducted on banks’ systems and controls for compliance with the AMLO after its enactment on 1 April 2012. Common control lapses identified relate to ongoing monitoring of business relationships through customer due diligence (CDD) and deficiencies in conducting enhanced CDD in high-risk situations. Banks should reference these examples to review data quality and transaction monitoring system effectiveness, and take appropriate risk mitigating measures on an ongoing basis. The HKMA expects up-to-date understanding of evolving risks, responsible regtech adoption (particularly in CDD and transaction monitoring) and close collaboration in the ecosystem. These are areas of consistent regulatory emphasis and we summarise key recent guidance in our briefing.

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