HKMA Fines CITIC Bank “HK$4 Million” for Violating AML/CTF Ordinance

On December 6, 2024, the Hong Kong Monetary Authority (HKMA) imposed an HK $4 million fine on China CITIC Bank International Limited for violating the Anti-money laundering or Counter-Terrorist Financing Ordinance(AMLO).

The penalty issued under section 21 (2)(c) of the AMLO originated from identified shortcomings in CITIC’s anti-money laundering and counter-terrorist financing (AML/CTF) controls.

According to the Monetary Authority, CITIC had failed to monitor suspicious transactions from 2015 to 2018, following disciplinary proceedings & investigation. The bank’s automated transaction monitoring system was configured improperly, which resulted in the system’s failure to identify illegal activities.

In November 2015, CITIC launched its transaction monitoring system and now discovered that 2 core models & 13 detection rules out of 33 were not implemented according to standard thresholds, parameters & scoring logic. This leads to a significant reduction in the number of generated alerts. 

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This audit also revealed that in a sample of 12 customers out of 30, the bank didn’t investigate the transaction purpose & background and never documented any transaction properly. This negligence violated section 5(1)(c) of Schedule 2 to the AMLO and raised a question about CITIC’s commitment to combat financial crimes. 

According to a press release, The HKMA’s action analyzed the importance of AML compliance measures in Hong Kong’s financial industry. Financial institutions are expected to maintain effective systems and controls to prevent & detect money laundering & terrorist financing.