Author: Syedur Rahman 8 December 2021
Syed Rahman of financial crime specialists Rahman Ravelli emphasises that the problem is far from unique to Hong Kong.
Swiss bank UBS, the Industrial and Commercial Bank of China (ICBC), China Construction Bank and the Taiwanese bank CTBC were found to have not met their obligations to monitor ongoing customer relationships and maintain effective compliance procedures under Hong Kong’s Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), which came into force in 2012. The banks’ failings were said to have happened between 2012 and 2016.
HKMA enforcement director Carmen Shiu said: “The identified deficiencies in the four cases occurred in a period following the commencement of the AMLO when industry understanding and experience were less mature.
“Since then, significant progress has been made by the industry, including the banks concerned, in enhancing financial crime compliance capabilities.”
ICBC received the biggest fine. It was ordered to pay the equivalent of $2.7 million for breaching nine provisions of the anti-money laundering regulations, having failed to carry out proper screening of politically exposed persons or gather adequate information regarding more than a thousand cross-border transactions. UBS paid $1.2 million – the second-highest fine - for violating four parts of the regulations, including failing to quickly close accounts of high-risk customers.
While the fines indicate that Hong Kong is taking a serious approach to money laundering, this is just the latest instance of banks being held to account for such failings around the world. Last year saw a total of $2.2 billion in fines issued worldwide for money laundering, with Australia and Sweden seeing the highest penalties imposed.
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.