HKMA Fines Fubon Bank HK$4 Million for Anti-Money Laundering Violations and Transaction Monitoring Failures

Monetary Authority takes disciplinary action against Fubon Bank (Hong Kong) Limited for contravention of Anti-Money Laundering and Counter-Terrorist Financing Ordinance

The following is issued on behalf of the Hong Kong Monetary Authority:

The Hong Kong Monetary Authority (HKMA) announced today (November 8) that it had completed an investigation and related disciplinary proceedings in relation to Fubon Bank (Hong Kong) Limited (FBHK) under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615 of the Laws of Hong Kong) (AMLO). The Monetary Authority (MA) has imposed a pecuniary penalty of HK$4,000,000 against FBHK for contravention of the AMLO.

The disciplinary action (Note) follows FBHK’s self-report of transaction monitoring failures and the HKMA’s investigation into FBHK’s systems and controls for compliance with the AMLO. The HKMA found that, between April 2019 and July 2022, FBHK failed to establish and maintain effective procedures for continuously monitoring business relationships with customers. Specifically, FBHK failed to have in place effective procedures for managing system changes, following up on a substantial decrease in transaction alerts, and regularly reviewing the scope of transactions covered by its transaction monitoring system. FBHK also failed to conduct appropriate scrutiny of transactions carried out for customers, and update customer due diligence reviews upon trigger events.

In deciding the disciplinary action, the MA has taken into account all relevant circumstances andfactors, including:

1. the seriousness of the investigation findings;
2. the need to send a clear deterrent message to FBHK and the industry about the importance of having effective procedures to address money laundering and terrorist financing risks;
3. FBHK reported its transaction monitoring failures to the HKMA.It was co-operative during the investigation and enforcement proceedings;
4. FBHK has carried out remediation to address the identified transaction monitoring failures and the associated control deficiencies; and
5. FBHK has no previous disciplinary record.

The Executive Director (Enforcement and AML) of the HKMA, Mr Raymond Chan, said, "The AMLO requires banks to put in place effective procedures for continuous monitoring of their business relationships with customers so that potential money laundering and terrorist financing activities are detected early. When changes are introduced to existing monitoring systems, bank management should ensure that the scope of surveillance covers all relevant transactions and any identified deficiencies are followed up promptly."

Note: The disciplinary action is taken under section 21 of the AMLO. The AMLO imposes customer due diligence and record-keeping requirements on specified financial institutions, including Authorized Institutions, and designated non-financial businesses and professions. The MA is the relevant authority with respect to Authorized Institutions under the AMLO.

Government proposes legislative amendments to facilitate green maritime fuel bunkering operations

The Government published in the Gazette today (October 2) six pieces of subsidiary legislation to amend Schedule 3 to the Pilotage Ordinance (Cap. 84) and five pieces of subsidiary legislation under the Immigration Ordinance (Cap. 115), the Dangerous Goods Ordinance (Cap. 295), the Shipping and Port Control Ordinance (Cap. 313) and the Merchant Shipping (Local Vessels) Ordinance (Cap. 548) to ensure that port facilities, including anchorages, and related arrangements can meet the growing demand for green maritime fuel bunkering services amid the global trend towards maritime decarbonisation.

The five pieces of subsidiary legislation to be amended are:

(a) Immigration (Anchorages and Landing Places) (Amendment) Order (Cap. 115C);

(b) Dangerous Goods (Shipping) (Amendment) Regulation 2012 (Cap. 295F);

(c) Shipping and Port Control (Amendment) Regulation (Cap. 313A);

(d) Merchant Shipping (Local Vessels) (General) (Amendment) Regulation (Cap. 548F); and

(e) Merchant Shipping (Local Vessels) (Fees) (Amendment) Regulation (Cap. 548J).

A spokesman for the Transport and Logistics Bureau said, "Amid the global transition towards green shipping, the international maritime industry is accelerating the adoption of green maritime fuels to achieve maritime decarbonisation. The proposed legislative amendments will rearrange anchorages to provide additional sea room, which will increase significantly from 645 hectares to 2 877 hectares, to facilitate green maritime fuel bunkering operations. In addition, a more trade-friendly fee structure will be introduced for Government Mooring Buoys (GMBs). The amendments will offer greater convenience to vessels visiting Hong Kong for green maritime fuel bunkering in future, further consolidating Hong Kong's position as a green maritime fuel bunkering centre."

Using green maritime fuels is the most effective way to achieve maritime decarbonisation. The Transport and Logistics Bureau promulgated the Action Plan on Green Maritime Fuel Bunkering (the Action Plan) in November 2024, setting out five strategies and 10 measures to develop Hong Kong into a green maritime fuel bunkering centre. Among them, the Action Plan proposes optimising the port layout to facilitate the mooring of green maritime fuel bunkering barges, thereby enhancing the operational flexibility of green maritime fuel bunkering.

The proposed legislative amendments cover the optimisation of the layout of anchorages and port facilities. These include establishing seven new anchorages, adjusting the boundaries of eight anchorages, converting three dangerous goods anchorages or service anchorages into multipurpose anchorages, repealing two existing anchorages, formalising two existing recommended Traffic Separation Schemes (TSSs) into local statutory TSSs, and introducing a more trade-friendly fee structure for GMBs. These measures will ensure that the Hong Kong Port has sufficient sea room to meet the demand for green maritime fuel bunkering services. Furthermore, the Government proposes to repeal a dangerous goods anchorage and a designated bunkering area located near residential areas and to make corresponding adjustments to other anchorages and designated bunkering areas to minimise potential impacts on nearby communities.

The Panel on Economic Development of the Legislative Council, the Pilotage Advisory Committee, the Port Operations Committee, the Local Vessels Advisory Committee, the High Speed Craft Consultative Committee, and the Dangerous Goods Standing Committee have been consulted on the legislative proposals. Relevant District Councils (including Tsuen Wan, Sham Shui Po, Kwai Tsing, Tai Po, Tuen Mun, Sai Kung, and Islands District Councils), relevant Rural Committees in the Islands District, and fishermen's representatives have also been consulted. All parties supported the proposals or raised no objection.

The proposed amendment regulations will be submitted to the Legislative Council on October 7 for negative vetting.