The Hong Kong Monetary Authority said Dec. 28 that it had reprimanded and fined JPMorgan Chase & Co.'s local unit HK$12.5 million for violating laws on money laundering and counterterrorism financing.
The HKMA said its investigation found that JPMorgan Chase Bank NA - Hong Kong Branch breached six provisions of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance between April 2012 and February 2014.
The JPMorgan unit failed to "establish and maintain effective procedures" for identifying and handling wire transfers, the HKMA said. The bank also did not carry out its duties on customer due diligence and on "continuous monitoring" of business relationships.
In addition to the fine, the HKMA also ordered the JPMorgan unit to submit a report prepared by an independent external adviser assessing the bank's remedial measures aimed at addressing its "contraventions and other deficiencies."
The regulator said the JPMorgan unit had self-identified and reported certain deficiencies. It had also taken "positive and extensive remediation work" after learning about its violations, including improving its control functions to prevent a repeat of the same breaches in the future.
The HKMA noted that the Hong Kong bank has no previous disciplinary record in relation to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.