HKMA Imposes Penalty on WeChat Pay Hong Kong for AML Failures
The
Hong
Kong
Monetary
Authority
(HKMA)
has
announced
a
disciplinary
action
against
WeChat
Pay
Hong
Kong
Limited
(WPHK)
for
violations
under
the
Payment
Systems
and
Stored
Value
Facilities
Ordinance
(PSSVFO).
According
to
the
HKMA,
WPHK
is
required
to
pay
a
pecuniary
penalty
of
HK$875,000
for
failing
to
meet
regulatory
standards.
Details
of
the
Violation
The
HKMA’s
investigation,
which
covered
the
period
from
August
25,
2016,
to
October
24,
2021,
found
that
WPHK
did
not
have
adequate
systems
in
place
to
comply
with
anti-money
laundering
(AML)
and
counter-financing
of
terrorism
(CFT)
guidelines.
The
identified
deficiencies
were
primarily
in
two
areas:
-
Undertaking
customer
due
diligence
(CDD)
reviews
upon
trigger
events. -
Applying
enhanced
due
diligence
measures
in
high-risk
situations
to
mitigate
money
laundering
and
terrorist
financing
risks.
Factors
Considered
in
Disciplinary
Action
The
HKMA
took
several
factors
into
account
when
deciding
the
disciplinary
action:
-
The
seriousness
of
the
investigation
findings. -
The
need
to
send
a
clear
deterrent
message
to
the
industry
regarding
the
importance
of
effective
AML
and
CFT
controls. -
Remedial
measures
taken
by
WPHK
to
address
the
deficiencies. -
WPHK’s
self-reporting
of
the
matter
to
the
HKMA. -
WPHK’s
lack
of
previous
disciplinary
records
and
its
cooperation
in
resolving
the
identified
issues.
Official
Statements
Raymond
Chan,
Executive
Director
(Enforcement
and
AML)
of
the
HKMA,
emphasized
the
importance
of
SVF
licensees
applying
enhanced
due
diligence
measures
in
potentially
high-risk
situations.
“These
enhanced
due
diligence
measures
should
be
effective
in
ensuring
that
the
associated
money
laundering
and
terrorist
financing
risks
are
properly
managed,”
Chan
stated.
For
further
information,
the
official
statement
of
disciplinary
action
can
be
accessed
from
the
Hong
Kong
Monetary
Authority.
Industry
Implications
This
disciplinary
action
serves
as
a
significant
reminder
to
all
stored
value
facility
(SVF)
licensees
in
Hong
Kong
about
the
critical
necessity
of
maintaining
robust
AML
and
CFT
controls.
The
HKMA’s
decision
highlights
the
regulatory
body’s
commitment
to
ensuring
financial
systems’
integrity
and
sending
a
clear
message
on
the
consequences
of
non-compliance.
Image
source:
Shutterstock
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