HKMA fines Coutts HK$7m for breaching money laundering rules
Authority keen on sending strong message to lenders to step up their compliance efforts to check client information
Hong Kong Monetary Authority has imposed a HK$7 million (US$900,000) fine on Coutts & Co AG’s Hong Kong branch and reprimanded it for failing to follow anti-money laundering rules between 2012 to 2015.
An HKMA investigation found Coutts has breached five provisions of the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance.
They include failure to establish and maintain effective procedures for determining whether its customers were politically exposed persons who are individuals vulnerable to corruption and pose a higher risk of money laundering
And the bank failed to obtain senior management approval to continue a business relationship with a customer after it had known the client was a politically exposed person, the authority said.
The bank also did not do sufficient due diligence before establishing a business relationship with customers.
In deciding the disciplinary action, the authority considered “it needed to send a clear deterrent message about the importance of effective internal anti-money laundering controls”.