This follows Fubon bank self-reported transaction monitoring failures and the monetary authority’s investigation into the bank’s systems and controls for compliance.

The HKMA found that, between April 2019 and July 2022, Fubon Bank “failed to establish and maintain effective procedures for continuously monitoring business relationships with customers.”

The regulator said this was specifically a failure to have effective procedures for managing system changes in place, following up on a substantial decrease in transaction alerts, and regularly reviewing the scope of transactions covered by its transaction monitoring system. Additionally, HKMA stated the bank failed to conduct appropriate scrutiny of transactions carried out for customers, and update customer due diligence reviews upon “trigger events”.

Raymond Chan, executive director, enforcement and AML, HKMA, said: “The AMLO requires banks to put in place effective procedures for continuous monitoring of their business relationships with customers so that potential money laundering and terrorist financing activities are detected early. When changes are introduced to existing monitoring systems, bank management should ensure that the scope of surveillance covers all relevant transactions and any identified deficiencies are followed up promptly.”