Hong Kong Monetary Authority fines three banks HKD 16.2 million and orders a look-back review over AML/CFT transaction monitoring failures

The Hong Kong Monetary Authority has completed investigations and disciplinary proceedings under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance against Indian Overseas Bank, Hong Kong Branch, Bank of Communications (Hong Kong) Limited and Bank of Communications Co., Ltd., Hong Kong Branch, citing deficiencies in systems and controls for continuously monitoring customer business relationships. The Monetary Authority imposed a total of HKD 16.2 million in pecuniary penalties and required remedial actions. Indian Overseas Bank, Hong Kong Branch was reprimanded, fined HKD 8.5 million, and directed to conduct a look-back review of past transactions and develop and implement a remedial plan after significant deficiencies were found in its transaction monitoring mechanism and management oversight of AML/CFT controls. Bank of Communications (Hong Kong) Limited and Bank of Communications Co., Ltd., Hong Kong Branch were fined HKD 4.0 million and HKD 3.7 million respectively after omissions meant certain transaction types were not loaded into their shared transaction monitoring system, undermining its effectiveness in identifying potentially suspicious activities. In determining the sanctions, the Monetary Authority considered the seriousness of the findings, the need for deterrence, any remedial measures taken, and that the banks had no prior disciplinary record under the ordinance and cooperated with the investigations and enforcement proceedings.