HKMA fines three banks for violating anti-money laundering policies

HKMA ordered fines and formulation of remedial measures.

The Hong Kong Monetary Authority (HKMA) has conducted disciplinary action against Indian Overseas Bank, Hong Kong Branch (IOBHK), Bank of Communications (Hong Kong) Limited (BCOM(HK)), and Bank of Communications Co., Ltd., Hong Kong Branch (BCOM) for violating the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615 of the Laws of Hong Kong) (AMLO) on 22 July.

According to HKMA, there were significant deficiencies in IOBHK's transaction monitoring mechanism and management regarding AMLO controls.

BCOM(HK) and BCOM Hong Kong Branch failed to load certain types of transactions into the monitoring system shared by both banks, resulting in undermining the system's effectiveness in identifying potentially suspicious activities.

IOBHK was reprimanded and ordered to conduct a review of past transactions to develop a remedial plan to address the contraventions, as well as a penalty of $8.5m.

A penalty of $4m and $3.7m was imposed on BCOM(HK) and BCOM Hong Kong Branch, respectively.

Details of the disciplinary actions against each of the three banks are: IOBHK, BCOM(HK), BCOM Hong Kong Branch.