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.
Remarks by FS at media session (with photo/video)
The Financial Secretary, Mr Paul Chan; the Secretary for Financial Services and the Treasury, Mr Christopher Hui, and the Secretary for Commerce and Economic Development, Mr Algernon Yau, together with the Chief Executive Officer of the Securities and Futures Commission, Ms Julia Leung, and the Chief Executive of the Hong Kong Monetary Authority, Mr Eddie Yue, met the media this evening (April 7). Following are Mr Chan's remarks at the media session:
Reporter: What tools does the Government have to handle the situation of the market and will Hong Kong consider a national team investor equivalent to intervene? Should the markets keep dropping, what is the bottom line for the state of the market before countermeasures will be considered?
Financial Secretary: I think Julia has explained very clearly the situation in the Hong Kong stock market. Basically, the market has been functioning orderly. There are substantial selling but also buying interests. The spread between the two has been very tight, indicating that the buying power remains very strong.
Hong Kong is a free port, and we encourage capital and investors from different parts of the world to take part in our capital market. Over the years, we have been taking a number of measures to enhance the competitiveness and attractiveness of our capital market, no matter whether it is improving the listing regime, lowering the transaction costs, expanding the markets, attracting investors and capital from around the world, or offering new products such as the ETF (exchange-traded fund) listed on the Saudi stock exchange (and investing in the Hong Kong stock market). All in all, we will persistently and consistently push forward initiatives on various fronts. With an expanding market and more participants from different parts of the world, the liquidity and resilience of our market will be enhanced. The resilience of our market has been very strong. We do not think the current volatility in the market warrants the taking of any drastic measures.
(Please also refer to the Chinese portion of the remarks.)
Remarks by FS at media session (with photo/video) Source: HKSAR Government Press Releases
