HKMA fines CITIC HK$4m over anti-money laundering breaches

The bank failed to generate alerts for suspicious transactions between November 2015 and July 2018.

The Hong Kong Monetary Authority (HKMA) has imposed a US$514,146 (HK$4m) fine on China CITIC Bank International Limited for breaching the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).

The penalty follows an HKMA investigation into CITIC’s compliance systems and controls under the ordinance. 

The investigation revealed deficiencies, including errors in the implementation of detection and core model rules in the bank’s automated transaction monitoring system. These errors caused the system to fail in generating alerts for suspicious transactions between November 2015 and July 2018.

Additionally, CITIC did not properly examine the background and purpose of certain customer transactions during the same period and failed to document its findings as required.

In determining the disciplinary action, the HKMA considered several factors such as the gravity of the breaches, the importance of sending a strong deterrent message to CITIC and the broader banking sector, and the remedial measures undertaken by CITIC to address the identified deficiencies.

The HKMA also noted that CITIC had no prior disciplinary record under AMLO and fully cooperated during the investigation.