The Monetary Authority has imposed penalty actions on WeChat Pay Hong Kong for breaching the Payment Systems and Stored Value Facilities Ordinance. Details about MA's disciplinary action The penalty is a result of an investigation that uncovered deficiencies in WPHK’s control systems for anti-money laundering and counter-terrorist financing measures from August 2016 to October 2021.

The HKMA found problems in customer due diligence and due diligence practices. This disciplinary action was taken after WPHK reported the issues themselves and the HKMA investigated. The HKMA acknowledged that WPHK has taken corrective actions and fully cooperated during the investigation.

The breach is related to inadequacies in WPHK's control systems in two specific areas: Conducting customer due diligence (CDD) reviews when trigger events occur. Implementing upgraded due diligence measures to address the high risks of money laundering and terrorist financing in certain situations. In determining the appropriate disciplinary action, the HKMA considered all relevant circumstances and factors, including the severity of the investigation findings, and the need to send a clear deterrent message to the industry regarding the importance of effective controls and procedures for addressing money laundering and terrorist financing risks. WPHK's efforts to rectify the deficiencies, and the submission of a self-report to report the matter to the HKMA's attention.

It was also noted that WPHK had no prior disciplinary record and had been cooperative in addressing the concerns identified by the HKMA. Officials from HKMA emphasised that Licensees of SVF (Stored Value Facility) should apply strengthened due diligence measures to their customers in situations involving potentially high risks of money laundering and terrorist financing. These strengthened due diligence measures should be effective in managing the associated risks of money laundering and terrorist financing.

What is the role of the HKMA? The Hong Kong Monetary Authority (HKMA) is tasked with upholding the stability and soundness of the financial system, with a specific focus on the banking sector. To achieve this objective, one of its primary strategies involves the intervention in currency markets by purchasing Hong Kong dollars to support the peg to the US dollar within a specified trading band. This measure is designed to ensure the stability and competitiveness of the Hong Kong dollar with the US dollar.

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