HKMA Imposes HK$10 Million Penalty on DBS Bank Hong Kong for AML Violations

The Hong Kong Monetary Authority imposed a pecuniary penalty of HK$10,000,000 on DBS Bank (Hong Kong) Limited on 5 July 2024 for contraventions of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. The HKMA confirmed the enforcement action in a press release published on its website, noting that the penalty followed a full investigation into the relevant contraventions and the completion of formal disciplinary proceedings.

DBS Bank (Hong Kong) Limited holds a banking licence in the territory and operates as a subsidiary of the DBS Group, which is headquartered in Singapore.

FULL INVESTIGATION PRECEDED DISCIPLINARY PROCEEDINGS

The HKMA conducted an investigation into the identified contraventions before initiating formal disciplinary proceedings against the bank. The HKMA said the investigation found that, during various periods between April 2012 and April 2019, the bank failed to continuously monitor business relationships and to conduct enhanced due diligence in high-risk situations, and failed to keep records in respect of some customers.

The Anti-Money Laundering and Counter-Terrorist Financing Ordinance sets requirements for customer due diligence, ongoing monitoring, record-keeping, and the reporting of suspicious transactions at authorised institutions operating in Hong Kong.

PENALTY CONSIDERATIONS

In setting the penalty, the HKMA noted that DBS Bank (Hong Kong) had already taken remedial action to address the deficiencies, had no previous disciplinary record under the AMLO and had cooperated with the investigation. Raymond Chan, Executive Director (Enforcement and AML) at the HKMA, said banks must put in place effective customer due diligence measures that are subject to regular review.