The Hong Kong Monetary Authority (HKMA) announced that it had completed an investigation and disciplinary proceedings for 33 Financial Services Limited (33 Finance) under the Payment Systems and Stored Value Facilities Ordinance. HKMA has reprimanded and ordered the company to pay a pecuniary penalty of $875,000 as it failed to fulfil the minimum criterion relating to anti-money laundering and counter-terrorist financing measures.
33 Finance is a Hong Kong-based card issuer of the three major international card organizations included Mastercard, UnionPay International and American Express. The HKMA which found that, during the period from November 2016 to June 2019, 33 Finance (www.33finance.com) failed to have in place adequate and appropriate systems of control to comply with the relevant paragraphs of the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT). Specifically, the contravention relates to deficiencies in 33FS’ systems of control in two areas, namely:
- continuously monitoring business relationships in respect of transaction monitoring; and
- implementing an effective name screening mechanism.
33 Finance has no previous disciplinary record and is co-operative in resolving concerns identified by the HKMA.
Carmen Chu, EHKMA Executive Director Enforcement and AML said: “While the majority of the SVF sector is characterised by lower ML/TF risks in view of the business nature, higher risk situations may emerge as business scale and scope develop, such as prepaid cards being misused for cash withdrawals funded by third-party’s (non-cardholders’) deposits. All SVF licensees are expected to make reference to the lessons learnt from this case as well as the guidance provided by the HKMA in the Guideline and circulars in their ongoing efforts to have in place effective AML/CFT systems of control for identifying, assessing and managing ML/TF risks, especially when encountering higher ML/TF risk situations.”
