JP Morgan Chase fined by Hong Kong regulator for money laundering fails
According to the HKMA, the bank failed to establish and maintain effective procedures for identifying and handling wire transfers.
Carmen Chu, executive director (enforcement and AML) of the HKMA, says: “A bank must have procedures that are effective for the purpose of carrying out its duties under the AMLO [Anti-Money Laundering and Counter-Terrorist Financing Ordinance]. Such procedures are essential to enable a bank to identify, understand and mitigate the risks to which it is exposed taking into account the nature, size and complexity of its business.”
The bank will have to submit a report prepared by an independent external advisor to see if its remedial measures are good enough.
The regulator’s investigation found that, between April 2012 and February 2014, JP Morgan Hong Kong contravened six specified provisions across several key control areas including customer due diligence (CDD).
For example, relevant CDD requirements before establishing business relationships with certain customers was cited. Among 495 “high risk customers”, 259 customers were not subject to annual review.
The bank also carried out a number of outgoing wire transfers without including the names of the originators in the relevant Swift messages.
The HKMA adds that JP Morgan Hong Kong has no previous disciplinary record in relation to the AMLO and co-operated with the HKMA during the investigation and enforcement proceedings.