HKMA Fines Cathay United Bank’s Hong Kong Branch with HK$11m

HKMA investigated CUBHK for violating the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. The monetary authority has imposed a pecuniary penalty of HK$11m.

HKMA, the Hong Kong Monetary Authority, has imposed a penalty of HK$11m on Cathay United Bank’s Hong Kong branch after completing a thorough investigation.

The HKMA completed the proceedings for Cathy Bank regarding anti-money laundering and terrorist financing protocols. During the on-site examination, the bank was fined for violating the anti-money laundering ordinance during the on-site examination.

The Hong Kong Monetary Authority investigated the case and took necessary disciplinary actions. Acting against AML and CFT laws is a serious issue that can’t be ignored by the monetary authority to avoid any intimidating situation in the future. 

According to HKMA, an on-site examination and investigation found certain deficiencies related to conducting customer due diligence regarding high-risk situations in the time period of April 2012 and February 2016.

CUBHK’s failure to establish effective procedures to carry out its activities under the anti-money laundering laws was shown in the analysis report of HKMA. These duties and activities of the financial institution regarding ongoing customer due diligence and enhanced due diligence during that period were not satisfactory. The financial institution couldn’t take all-inclusive and reasonable measures to ensure strict safety controls to mitigate money laundering or terrorist financing risks.

Carmen Chu, the HKMA’s executive director of enforcement and AML, said, “Senior management oversight is a vital part of effective ML/TF risk management framework of banks. In discharging the relevant legal and regulatory obligations, banks should have a clear understanding of risks and ensure adequate resources to support timely and proactive follow-up of anti-money laundering and counter-financing of terrorism-related issues, with effective coordination across the entire institution. Banks should make reference to the HKMA’s relevant guidelines and circulars in adopting appropriate governance systems for ML/TF risk management.”

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