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HKMA Fines Fubon Bank HK$4 Million for Anti-Money Laundering Violations and Transaction Monitoring Failures

HK

HKMA Fines Fubon Bank HK$4 Million for Anti-Money Laundering Violations and Transaction Monitoring Failures
HK

HK

HKMA Fines Fubon Bank HK$4 Million for Anti-Money Laundering Violations and Transaction Monitoring Failures

2024-11-08 16:45 Last Updated At:16:58

Monetary Authority takes disciplinary action against Fubon Bank (Hong Kong) Limited for contravention of Anti-Money Laundering and Counter-Terrorist Financing Ordinance

The following is issued on behalf of the Hong Kong Monetary Authority:

The Hong Kong Monetary Authority (HKMA) announced today (November 8) that it had completed an investigation and related disciplinary proceedings in relation to Fubon Bank (Hong Kong) Limited (FBHK) under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615 of the Laws of Hong Kong) (AMLO). The Monetary Authority (MA) has imposed a pecuniary penalty of HK$4,000,000 against FBHK for contravention of the AMLO.

The disciplinary action (Note) follows FBHK’s self-report of transaction monitoring failures and the HKMA’s investigation into FBHK’s systems and controls for compliance with the AMLO. The HKMA found that, between April 2019 and July 2022, FBHK failed to establish and maintain effective procedures for continuously monitoring business relationships with customers. Specifically, FBHK failed to have in place effective procedures for managing system changes, following up on a substantial decrease in transaction alerts, and regularly reviewing the scope of transactions covered by its transaction monitoring system. FBHK also failed to conduct appropriate scrutiny of transactions carried out for customers, and update customer due diligence reviews upon trigger events.

In deciding the disciplinary action, the MA has taken into account all relevant circumstances andfactors, including:

  • the seriousness of the investigation findings;
  • the need to send a clear deterrent message to FBHK and the industry about the importance of having effective procedures to address money laundering and terrorist financing risks;
  • FBHK reported its transaction monitoring failures to the HKMA.It was co-operative during the investigation and enforcement proceedings;
  • FBHK has carried out remediation to address the identified transaction monitoring failures and the associated control deficiencies; and
  • FBHK has no previous disciplinary record.
  • The Executive Director (Enforcement and AML) of the HKMA, Mr Raymond Chan, said, "The AMLO requires banks to put in place effective procedures for continuous monitoring of their business relationships with customers so that potential money laundering and terrorist financing activities are detected early. When changes are introduced to existing monitoring systems, bank management should ensure that the scope of surveillance covers all relevant transactions and any identified deficiencies are followed up promptly."

    Note: 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. The MA is the relevant authority with respect to Authorized Institutions under the AMLO.

    Tender of 2-year RMB HKSAR Institutional Government Bonds to be held on November 14

    The following is issued on behalf of the Hong Kong Monetary Authority:

    The Hong Kong Monetary Authority (HKMA), as representative of the Hong Kong Special Administrative Region Government (HKSAR Government), announced today (November 8) that a tender of 2-year RMB Institutional Government Bonds (Bonds) under the Infrastructure Bond Programme will be held on November 14, 2024 (Thursday), for settlement on November 18, 2024 (Monday).

    A total of RMB1.0 billion 2-year RMB Bonds will be tendered. The Bonds will mature on November 18, 2026 and will carry interest at the rate of 2.04 per cent per annum payable semi-annually in arrear.

    Tender is open only to Primary Dealers appointed under the Infrastructure Bond Programme. Anyone wishing to apply for the Bonds on offer can do so through any of the Primary Dealers on the latest published list, which can be obtained from the Hong Kong Government Bonds website at www.hkgb.gov.hk. Each tender must be for an amount of RMB50,000 or integral multiples thereof.

    Tender results will be published on the HKMA's website, the Hong Kong Government Bonds website, Bloomberg (GBHK <GO>) and Refinitiv (IBPGSBPINDEX). The publication time is expected to be no later than 3pm on the tender day.

    HKSAR Institutional Government Bonds tender information

    ------------------------------------------------------------------

    Tender information of 2-year RMB HKSAR Institutional Government Bonds:

    Issue Number

    :

    02GB2611001

    Stock Code

    :

    84585 (HKGB2.04 2611-R)

    Tender Date and Time

    :

    Thursday, November 14, 2024

    9.30am to 10.30am

    Issue and Settlement Date

    :

    Monday, November 18, 2024

    Amount on Offer

    :

    RMB1.0 billion

    Maturity

    :

    2 years

    Maturity Date

    :

    Wednesday, November 18, 2026

    Interest Rate

    :

    2.04 per cent p.a. payable semi-annually in arrear

    Interest Payment Dates

    :

    May 18 and November 18 in each year, commencing on the Issue Date up to and including the Maturity Date, subject to adjustment in accordance with the terms of the Institutional Issuances Information Memorandum of the Infrastructure Bond Programme and Government Sustainable Bond Programme (Information Memorandum) published on the Hong Kong Government Bonds website.

    Method of Tender

    :

    Competitive tender

    Tender Amount

    :

    Each competitive tender must be for an amount of RMB50,000 or integral multiples thereof. Any tender applications for the Bonds must be submitted through a Primary Dealer on the latest published list.

    Other Details

    :

    Please see the Information Memorandum available on the Hong Kong Government Bonds website or approach Primary Dealers.

    Expected commencement date of dealing on

    the Stock Exchange

    of Hong Kong Limited

    :

    Tuesday, November 19, 2024

    Use of Proceeds

    :

    The Bonds will be issued under the institutional part of the Infrastructure Bond Programme. Proceeds will be invested in infrastructure projects in accordance with the Infrastructure Bond Framework published on the Hong Kong Government Bonds website.

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