HKMA Imposes HK$10 Million Fine on DBS Bank (Hong Kong) for AML Failures

The
Hong
Kong
Monetary
Authority
(HKMA)
has
announced
a
disciplinary
action
against
DBS
Bank
(Hong
Kong)
Limited
(DBSHK),
imposing
a
significant
monetary
penalty
of
HK$10
million.
The
penalty
was
levied
for
contraventions
under
the
Anti-Money
Laundering
and
Counter-Terrorist
Financing
Ordinance
(AMLO),
according
to
the

Hong
Kong
Monetary
Authority.

Investigation
Findings

The
HKMA’s
investigation
revealed
several
deficiencies
in
DBSHK’s
compliance
systems.
These
included
failures
to
continuously
monitor
business
relationships,
conduct
enhanced
due
diligence
in
high-risk
situations
between
April
2012
and
April
2019,
and
maintain
proper
records
for
some
customers.
Additionally,
DBSHK
did
not
have
adequate
procedures
to
fulfill
its
duties
under
the
AMLO
during
this
period.

Factors
Considered
in
the
Disciplinary
Action

In
determining
the
disciplinary
action,
the
Monetary
Authority
considered
various
factors:

• The
  seriousness
  of
  the
  investigation
  findings.
• The
  necessity
  to
  send
  a
  clear
  deterrent
  message
  to
  the
  industry
  regarding
  the
  importance
  of
  effective
  anti-money
  laundering
  and
  counter-terrorist
  financing
  controls.
• Remedial
  actions
  taken
  by
  DBSHK
  to
  address
  identified
  deficiencies
  and
  improve
  compliance
  measures.
• DBSHK’s
  lack
  of
  previous
  disciplinary
  records
  related
  to
  the
  AMLO
  and
  its
  cooperation
  during
  the
  investigation
  and
  enforcement
  proceedings.

Official
Statement

Ms.
Raymond
Chan,
Executive
Director
(Enforcement
and
AML)
of
the
HKMA,
emphasized
the
importance
of
effective
customer
due
diligence
measures
to
combat
money
laundering
and
terrorist
financing.
She
stated,
“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.”

Industry
Implications

This
disciplinary
action
sends
a
strong
message
to
financial
institutions
about
the
critical
importance
of
maintaining
robust
anti-money
laundering
and
counter-terrorist
financing
controls.
It
underscores
the
HKMA’s
commitment
to
enforcing
compliance
and
ensuring
that
financial
institutions
adhere
strictly
to
regulatory
requirements.

Image
source:
Shutterstock