WeChat Pay's CDD Review: HKMA Enforces Guidelines on Anti-Money Laundering
HKMA Sanctions WeChat Pay for Lapses in Due Diligence
The Hong Kong Monetary Authority (HKMA) recently imposed a fine of HK$875,000 (US$112,205) on WeChat Pay, a digital wallet service provider, for failing to execute adequate customer due diligence (CDD) procedures. This action arises from an investigation spanning over five years, revealing insufficient controls in anti-money laundering and counter-financial terrorism standards.
Critical Findings of the Investigation
- The investigation indicated that WeChat Pay did not identify risks as prompted by law enforcement agencies.
- Specific notification involved 1,827 pieces of information concerning 500 accounts, among which 98 accounts attracted further scrutiny by the Hong Kong government’s Joint Financial Intelligence Unit (JFIU).
- Delayed response times ranged from 80 to 900 days, significantly undermining the integrity of their financial operations.
Establishing Enhanced Due Diligence Mechanisms
Despite the penalties, WeChat Pay has implemented remedial measures to rectify identified deficiencies. The company has proactively engaged with regulatory authorities, enhancing their controls over the last three years to mitigate risks related to money laundering and terrorist financing.
The HKMA stressed the importance of adhering to guidelines and ensuring effective controls to safeguard against financial crimes.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.