On July 5, 2024, the Hong Kong Monetary Authority (HKMA) announced that it had imposed a pecuniary penalty of HK$10,000,000 ($1.3 million) on DBS Bank (Hong Kong) for contraventions of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO). The fine was issued following an investigation that revealed several control deficiencies at DBS Bank:
- Failure to Monitor Business Relationships: DBS failed to continuously monitor business relationships and conduct enhanced due diligence in high-risk situations during various periods between April 2012 and April 2019
- Inadequate Record-Keeping: The bank failed to keep records regarding some of its customers, which is a critical aspect of anti-money laundering (AML) compliance.
- Ineffective Procedures: DBS failed to establish and maintain effective procedures for carrying out its duties under the AMLO, including inadequate guidance for analysts to examine transaction alerts and document their findings.
- Failure to Identify Suspicious Transactions: Between March 1 and September 30, 2017, DBS failed to identify transactions with no apparent economic or lawful purpose when reviewing alerts generated from its transaction monitoring system.
DBS Hong Kong acknowledged the seriousness of their AML obligations and pledged to comply with the HKMA’s directives. The bank has since introduced new group policies to enhance its ability to identify and address emerging money laundering risks.
The fine was imposed after considering the seriousness of the investigation findings and the need to send a clear deterrent message to the industry about the importance of effective controls and procedures to address money laundering and terrorist financing risks.
DBS Hong Kong cooperated with the HKMA during the investigation and enforcement proceedings, and the penalty took into account the bank’s remedial actions to address the identified deficiencies and improve its controls.
