Hong Kong regulator fines three brokers $55,770 over AML breaches

Compliance gaps revealed weak controls for identifying politically exposed clients.

Hong Kong’s Insurance Authority (IA) reprimanded and fined three licensed insurance brokerages a total of $55,770 (HK$429,000) for failing to meet anti-money laundering (AML) and counter-terrorist financing standards.

The disciplinary action also includes formal reprimands against three individuals linked to the firms.

The penalties involve ASI-Union Global Assets Management Ltd., Macroscopica International Wealth Management Ltd., and Bay Union Insurance Brokers Limited (formerly known as Huize Hong Kong Insurance Broker Limited).

According to the IA, these companies breached the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.

Specific failures included the absence of effective procedures to conduct customer due diligence and a lack of systems to identify if clients were "politically exposed persons."

The brokerages also failed to verify if individuals were acting on behalf of customers and did not maintain adequate records.

The IA noted that the three companies have since taken remedial steps to correct these internal deficiencies.

($1.00 = HK$7.82)