The Hong Kong Monetary Authority imposed a pecuniary penalty of HK$4,000,000 on Fubon Bank (Hong Kong) Limited on 8 November 2024 under Section 21(2)(c) of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, following an investigation into deficiencies in the bank's transaction monitoring systems and procedures. The HKMA published the details of the enforcement action in a press release issued on the same day, confirming that the penalty arose from a self-report made by Fubon Bank to the regulator.
The HKMA's investigation found that between April 2019 and July 2022, Fubon Bank failed to establish and maintain effective procedures for the continuous monitoring of business relationships, as required under Hong Kong's anti-money laundering and counter-terrorist financing legislation.
SCOPE OF THE COMPLIANCE FAILURES
The regulator identified several distinct categories of failure within Fubon Bank's transaction monitoring framework. These included inadequate procedures for handling changes made to transaction monitoring systems, a failure to follow up appropriately on instances where transaction alert volumes were reduced, and missing customer due diligence updates on trigger events — circumstances that should have prompted the bank to refresh its knowledge of particular customer relationships and reassess associated risk.
Raymond Chan, Executive Director (Enforcement and AML) of the HKMA, said the AMLO requires banks to put in place effective procedures for continuous monitoring of their business relationships with customers, and that when changes are introduced to existing monitoring systems, bank management should ensure the scope of surveillance covers all relevant transactions and that identified deficiencies are followed up promptly.
Fubon Bank (Hong Kong) Limited is a subsidiary of Fubon Financial Holding Co., a Taiwanese financial holding company, and operates retail and corporate banking services in Hong Kong. The bank had no previous disciplinary record with the HKMA, a factor that the authority explicitly took into account when determining the level of the financial penalty alongside the bank's decision to self-report and its subsequent cooperation with the investigation.
SELF-REPORT AND REGULATORY COOPERATION CONSIDERED
The HKMA acknowledged that Fubon Bank's voluntary disclosure of the transaction monitoring failures and its cooperative conduct throughout the investigation were reflected in the determination of the final penalty amount.
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