Monetary Authority takes disciplinary action against Cathay United Bank Company, Limited, Hong Kong Branch for contraventions of Anti-Money Laundering and Counter-Terrorist Financing Ordinance


23rd September 2022 – (Hong Kong) The Hong Kong Monetary Authority (HKMA) announced today that it had completed an investigation and the disciplinary proceedings for Cathay United Bank Company, Limited, Hong Kong Branch (CUBHK) under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615 of the Laws of Hong Kong) (AMLO). The Monetary Authority (MA) has imposed a pecuniary penalty of HK$11,000,000 against CUBHK for contraventions of the AMLO.

The disciplinary action follows an on-site examination and further investigation by the HKMA on CUBHK’s systems and controls for compliance with the AMLO. The control deficiencies identified in the investigation relate to conducting on-going customer due diligence (CDD) and enhanced customer due diligence (EDD) in respect of high risk situations during the period between April 2012 and February 2016. CUBHK failed to establish and maintain effective procedures for carrying out its duties under the AMLO in relation to on-going CDD and EDD during this period. In addition, CUBHK failed to take all reasonable measures to ensure that proper safeguards exist to prevent the contraventions and to mitigate money laundering or terrorist financing (ML/TF) risks.

In deciding the disciplinary action, the MA took into account the relevant circumstances and factors, including the following:

  1. The seriousness of the investigation findings; 
  2. The need to send a clear deterrent message to CUBHK and the industry about the importance of effective controls and procedures to address ML/TF risks; 
  3. CUBHK’s remedial and enhancement measures taken to address the deficiencies identified by the HKMA; and 
  4. CUBHK has no previous disciplinary record in relation to the AMLO and cooperated with the HKMA during the investigation and enforcement proceedings.

 The Executive Director (Enforcement and AML) of the HKMA, Ms Carmen Chu, said, “Senior management oversight is a vital part of effective ML/TF risk management framework of banks. In discharging the relevant legal and regulatory obligations, banks should have a clear understanding of risks and ensure adequate resources to support timely and proactive follow-up of anti-money laundering and counter-financing of terrorism related issues, with effective coordination across the entire institution. Banks should make reference to the HKMA’s relevant guidelines and circulars in adopting appropriate governance systems for ML/TF risk management.”