SINGAPORE: The Hong Kong Monetary Authority (HKMA) has fined the local arm of Singapore’s DBS Bank HK$10 million (approx. S$1.7 million) for repeated failures in anti-money laundering (AML) and counter-terrorist financing (CTF) over seven years.
According to Citywire Asia, between April 1, 2012 and Apr 30, 2019, DBS Hong Kong (DBSHK) breached four key AML rules. One major issue was the bank’s online corporate banking service, Ideal.
DBSHK did not collect identity details from people authorised to approve transactions for 477 clients. Additionally, the bank failed to conduct necessary “trigger event reviews” for 23 customers.
These reviews are important when there are changes in circumstances, like unusual transaction patterns or changes in ownership.
DBSHK did not identify transactions lacking apparent economic or lawful purpose for 15 clients between March 1, 2017 and Sept 30, 2017.
Moreover, the bank failed to maintain adequate records for nine of these clients.
HKMA stated that DBSHK failed to verify the source of wealth and funds for high-risk customers. This affected 15 business relationships between Dec 1, 2018 and Feb 28, 2019.
Raymond Chan, Executive Director of Enforcement and AML at HKMA, highlighted the importance of strong customer due diligence.
“The HKMA requires banks to put in place effective customer due diligence measures to combat money laundering and terrorist financing.
These measures should be subject to regular review to ensure that they remain effective,” Mr Chan said.
In response, DBSHK acknowledged the lapses and accepted HKMA’s decision. The bank described the issues as “sporadic and historical in nature” and emphasised its efforts to enhance AML controls.
“DBSHK has been working closely with the HKMA on uplifting and enhancing execution quality of the bank’s AML controls.
Over the years, DBSHK has also implemented new group policies to continue to detect and manage new money laundering typologies. These actions have materially improved our capabilities to detect and mitigate money laundering risks,” DBSHK said. /TISG
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