The Hong Kong Monetary Authority (HKMA) announced today that it had completed an investigation and disciplinary proceedings for EFG Bank AG, Hong Kong Branch (EFGHK) under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).

The regulator has imposed a pecuniary penalty of HK$16,000,000 against EFGHK for contraventions of the AMLO.

The disciplinary action follows an on-site examination and further investigation by the HKMA on EFGHK’s systems and controls for compliance with the AMLO. The investigation identified control deficiencies in respect of conducting customer due diligence (CDD) on customers transferred from another financial institution during the period from 21 February 2016 to 16 January 2018, as well as on-boarding CDD and on-going CDD measures on some other customers during the period from 1 April 2012 to 31 October 2018.

In addition, during the period from 1 April 2012 to 31 October 2018, EFGHK failed to establish and maintain effective procedures for carrying out its duties under the AMLO in relation to CDD and on-going monitoring of business relationships with customers.

In deciding the disciplinary action, the regulator has taken into account a variety of factors, including the seriousness of the investigation findings and the need to send a clear deterrent message to EFGHK and the industry about the importance of effective controls and procedures to address the risks of money laundering and terrorist financing.