DBS Bank (Hong Kong) Limited, or DBS HK, received a HK$10 million fine ($1. 28 million) from the Hong Kong Monetary Authority (HKMA) for breaching anti-money laundering and counter-terrorist financing regulations. The fine arose from a probe that found that the bank had several serious control defects between April 2012 and April 2019.
DBS Bank Gets Fine of HK$10 Million for AML Compliance Lapses
HKMA’s investigation also pointed out that DBSHK failed to adequately scrutinize business relationships or apply appropriate senior management measures in risky situations. The bank also could not properly document transactions for some of the customers and did not have adequate measures to follow AMLO requirements.
The HKMA requires that banks implement strict measures on the identification of customers to prevent cases of money laundering and financing of terrorism. Raymond Chan said that enhancement of compliance is of great importance, he works at HKMA as the Executive Director of Enforcement and Anti-Money Laundering. Hence, these measures should be periodically reviewed to ensure their efficiency is not compromised.
DBS Bank Failed To Get ID Documents For 609 Authorizers
DBS Hong Kong failed to collect identity documents for 609 authorizers of its corporate internet banking service, IDEAL, impacting 477 corporate customers. Additionally, the bank did not verify the source of wealth for 15 high-risk customers, leaving it vulnerable to money laundering and terrorist financing threats.
The $2.2 Billion Case
A DBSHK spokesperson replied to Bloomberg, emphasizing the institution’s commitment to Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) procedures. They acknowledged the regulator’s decision but highlighted that the fine issues were sporadic and historical.
Last year, DBS, Citibank, Oversea-Chinese Banking Corp. (OCBC), and Swiss Life faced fines for potential Anti-Money Laundering/Counter-Terrorism Financing (AML/CFT) violations totaling $2.83 million.
“Banks must significantly boost due diligence efforts. Many need thorough compliance system reviews and prompt upgrades,” stated Doyle (Head of Financial Crime Policy at Fenergo).
While the fine was modest, it highlights that one of Singapore’s largest banks, DBS, was previously implicated in major controversies, including a billion-dollar money laundering case where $2.2 billion was seized by the police.