Hong Kong regulator fines JPMorgan over anti-money laundering, CDD failures
11 Jan 2019

The Hong Kong Monetary Authority (HKMA) has reprimanded and penalised JPMorgan Chase Bank HK$12.5 million ($1.60 million) for breaching anti-money laundering rules, after a probe revealed deficiencies in customer due diligence (CDD) and other areas.

According to the watchdog, the investigation found that, between April 2012 and February 2014, JPMorgan Hong Kong contravened provisions of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) as a result of deficiencies across several key control areas including CDD, periodic review of CDD information and wire transfers.

The institution’s CDD procedures for certain customers did not require certificates of incumbency or comparable documents to be obtained to verify their existence, and the identities of beneficial owners to be verified, the watchdog explained.

“[It] failed to carry out periodic reviews of certain customers within relationship groups to ensure that the documents, data and information obtained by JPMorgan Hong Kong were up-to-date and relevant,” the HKMA said.

“Among 495 high risk customers in such relationship groups, 259 customers were not subject to annual review.”

In response, the bank said in an emailed statement to Reuters: “We look forward to working with the independent adviser who will be appointed to review our current internal controls in Hong Kong to verify that the legacy issues have been addressed by the remedial actions already undertaken by JPMorgan.”

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