BNP Paribas Chinese Unit Fined for Anti-Money Laundering Violations
02 Jun 2020

The Chinese unit of European banking giant BNP Paribas SA was fined 2.7 million yuan ($378,200) by China’s central bank for failure to verify client identification and report large and suspicious transactions as required.

Three senior executives of BNP Paribas (China) Ltd., a wholly owned subsidiary of the Paris-based bank, were also levied fines ranging from 45,000 yuan to 60,000 yuan for responsibility in the violations, including Chief Executive Officer Lai Changgeng and Chief Operating Officer and Deputy CEO David Goyon, according to a statement issued Wednesday by the Shanghai branch of the People’s Bank of China (PBOC).

The penalties were part of the PBOC’s efforts to ramp up punishment of financial institutions that fail to adequately guard against money laundering. The central bank recently fined China Minsheng Banking Corp. 23.6 million yuan and China Everbright Bank Co. Ltd. 18.2 million yuan for failure to adequately guard against money laundering. Brokerage Huatai Securities Co. Ltd. was fined 10.1 million yuan for similar violations.

The PBOC issued nearly four times more fines in the first quarter of 2020 than over the same period last year, according to a report by a Shanghai-based consultancy. The PBOC penalized 93 institutions and their staff a total of 183 million yuan for violations of money laundering regulations in the January-to-March period.

Until recently, many rule breakers would have to pay only a few hundred thousand yuan for money laundering violations, a practice derided by critics who said the penalties were not serious enough to act as an effective deterrent. Last year, regulators signaled an end to that practice, beginning an era of drastically higher penalties, a senior bank compliance insider told Caixin.

By Zhu Liangtao and Denise Jia, Caixin, 30 May 2020

Read more at Caixin

Photo: Can Pac Swire [CC BY-NC 2.0] via Flickr

RiskScreen: Eliminating Financial Crime with Smart Technology

You can claim CPD minutes for this content, by signing up to our CPD Wallet