Monetary Authority takes disciplinary action against China CITIC Bank International Limited for contraventions of Anti-Money Laundering and Counter-Terrorist Financing Ordinance
The Hong Kong Monetary Authority (HKMA) announced today (6 December)
that it had completed an investigation and disciplinary proceedings
for China CITIC Bank International Limited (CITIC) under the Anti-
Money Laundering and Counter-Terrorist Financing Ordinance (Chapter
615 of the Laws of Hong Kong) (AMLO) (Note 1). The Monetary Authority
(MA) has imposed a pecuniary penalty of HK$4,000,000 against CITIC for
contraventions of the AMLO.
The disciplinary action (Note 2)
follows an investigation by the HKMA on CITIC’s systems and controls
for compliance with the AMLO. The deficiencies identified in the
investigation were related to the incorrect implementation of
detection rules and core model rules in its automated transaction
monitoring system, resulting in failure to generate system alerts on
suspicious transactions during the period between November 2015 and
July 2018. CITIC also failed to examine the background and purpose of
the transactions of some customers and to set out its findings in
writing during this period.
In deciding the disciplinary
action, the MA has taken into account all relevant circumstances and
factors, including the following: (a) the seriousness of the
investigation findings; (b) the need to send a clear deterrent
message to CITIC and the industry about the importance of having
effective controls and procedures to address money laundering and
terrorist financing risks; (c) CITIC has taken remedial actions to
address the identified deficiencies; and (d) CITIC has no previous
disciplinary record in relation to the AMLO and cooperated with the
HKMA during the investigation and enforcement proceedings.
Mr
Raymond Chan, Executive Director (Enforcement and AML) of the HKMA,
said, “The integrity and robustness of a transaction monitoring system
is vital in the ongoing fight against financial crime. It is important
for banks to ensure that their transaction monitoring system is
properly configured and operates effectively. ”
Relevant link:
Statement of Disciplinary Action
End
Notes: Prior to 1
March 2018, the short title of Chapter 615 of the Laws of Hong Kong
was the Anti-Money Laundering and Counter-Terrorist Financing
(Financial Institutions) Ordinance. The disciplinary action is taken
under section 21 of the AMLO. The AMLO imposes customer due diligence
and record-keeping requirements on specified financial institutions,
including Authorized Institutions, and designated non-financial
businesses and professions. As regards Authorized Institutions, the MA
is the relevant authority under the AMLO.