The Hong Kong Monetary Authority (HKMA) penalized the Hong Kong branch of Commerzbank HK$6M (€768K) for AML/CFT violations.
The HKMA said in a statement that it has investigated the Hong Kong Commerzbank branch in accordance with the nation's Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).
Commerzbank Hong Kong was fined HK$6,000,000 by the HKMA for "contraventions" of the AMLO, according to the HKMA.
The choice was made in response to an on-site inspection and follow-up examination into the company's adherence to the nation's AMLO.
Between April 2012 and June 2016, according to the HKMA, mistakes were made when completing consumer due diligence before creating commercial partnerships.
Additionally, the bank "failed to establish and maintain effective procedures for carrying out its duties under the AMLO in relation to conducting CDD and implementing name screening mechanisms of customers’ beneficial owners during this period," the regulator stated.
The HKMA claimed it considered the "seriousness of the investigation findings" and the "need to send a clear deterrent message to CBHK and the industry about the importance of effective controls and procedures" to combat dirty money when deciding the disciplinary action.
"As the first line of defence, carrying out CDD measures upon customer on-boarding is fundamental to combating money laundering and terrorist financing and thereby maintaining the integrity of the banking system of Hong Kong," said Carmen Chu, Executive Director (Enforcement and AML) at the HKMA.
In order to maintain the effectiveness of their anti-money laundering and counter-financing of terrorist control systems, she continued, "banks should make reference to the HKMA’s relevant guidelines and circulars in reviewing and optimising the performance of their anti-money laundering and counter-financing of terrorism control systems on an on-going basis."
By fLEXI tEAM