Hong Kong

New Documents

UAE Central Bank, HK Regulator Discuss Enhanced Fintech Collaboration

The Central Bank of the United Arab Emirates and the Hong Kong Monetary Authority conducted a bilateral meeting in Abu Dhabi with the aim of strengthening cooperation on enhancing their respective financial sectors.

May 30, 2023

Hong Kong Defendant in Ramp-and-Dump Scheme Arrested for Breaching Bail Conditions

Tse Yiu Chung, a defendant charged with offenses related to a “ramp-and-dump” scheme and money laundering activities, has been arrested in Hong Kong for breaching her bail conditions.

May 22, 2023

HKMA Commences e-HKD Pilot Program

May 22, 2023

Hong Kong Customs Take Down HK$3.5 Billion Money Laundering Syndicate

May 10, 2023

Hong Kong Woman Fined for Operating Unlicensed Money Service Business

May 4, 2023

News

Midweek Roundup: Online Streaming Platforms Doubling as Money Transmitters, UK Ruling Links Political Donor to Laundering Scheme, and More

U.S. taskforce arrests Russian sanctions-evasion suspects, Denmark finalizes unprecedented AML fine, and more, in the midweek roundup.

May 17, 2023

Weekly Roundup: EU Mulls Secondary Sanctions, Binance Turns Gaze Towards Britain, and More

U.K. payments firm’s seed cash tied to organized crime, U.S. lawmakers urge White House to blacklist Hong Kong judges, and more, in the weekly roundup.

May 12, 2023

Midweek Roundup: Binance Faces Sanctions Probe, US Lawmaker Charged with Money Laundering, and More

May 10, 2023

Midweek Roundup: FinCEN Passes 2-Year Mark Without Permanent Director, OCC Drops Case Against Rabobank Compliance Chief, and More

April 12, 2023

Weekly Roundup: US Treasury Assesses DeFi Risk, Emirati Authorities Yank Russian Bank’s License, and More

April 6, 2023

Enforcement Actions

SFC Fines City International Futures (Hong Kong) Ltd. HK$100,000 for AML/CTF Breaches

Hong Kong’s Securities and Futures Commission fined City International Futures (Hong Kong) Ltd. HK$100,000 for breaches of anti-money laundering and counterterrorist financing and other regulatory requirements made between March 2016 and October 2018.

March 13, 2023

HKMA Fines Westpac Banking Corp. Branch HK$4 Million for AML/CTF Violations

The Hong Kong Monetary Authority imposed a financial penalty of HK$4 million on the Hong Kong branch of the Sydney, Australia-based financial institution for violations of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.

February 13, 2023

Hong Kong SFC Fines Jenrui Futures (Hong Kong) Limited $HK4.8 Million, Bans Responsible Officers

February 8, 2023

HKMA Fines Branch of Cathay United Bank HK$11 Million for AML/CTF Violations

September 29, 2022

Hong Kong SFC Suspends Rifa Futures Ltd. Director for Eight Months

September 18, 2022

Key Documents

Hong Kong Enacts AML/CTF Ordinance

July 8, 2011

Hong Kong Publishes Anti-Terrorism Measures Ordinance

February 8, 2012

Hong Kong Monetary Authority Updates AML/CTF Guidelines

January 27, 2012

Hong Kong Insurance Regulator Issues AML/CTF Guidance

January 27, 2012

Hong Kong Publishes AML/CTF Guidance for Money Service Operators

January 27, 2012

Hong Kong Regulator Issues Amended AML/CTF Guideline

March 20, 2015

Important Facts

  • The U.S. State Department labels Hong Kong as a major money laundering jurisdiction. Hong Kong, a Special Administrative Region of the People’s Republic of China, is a major international financial and trading center. Hong Kong is the world’s sixth largest banking center in terms of external transactions and the fourth largest foreign exchange trading center. Hong Kong does not differentiate between offshore and onshore entities for licensing and supervisory purposes, and it has its own U.S. dollar interbank clearing system for settling transactions. The country’s low tax rates and simplified tax regime, together with its sophisticated banking system, shell company formation agents, free port status and the absence of currency and exchange controls present vulnerabilities for money laundering, including trade-based money laundering and underground finance. Hong Kong-based shell companies have been exploited by a variety of suspicious actors to launder money, facilitate illicit trade and gain access to the international financial system. The primary sources of laundered funds – derived from local and overseas criminal activity – are fraud and financial crimes, illegal gambling, loan sharking, and smuggling. Hong Kong requires financial institutions and designated non-financial businesses and professions to comply with customer due diligence procedures and record-keeping requirements. In September 2020, the Hong Kong Monetary Authority updated guidance to require that banks treat suspected breaches of the newly implemented national security law in the same way as AML/CTF violations, and submit related suspicious transaction reports (STRs). The jurisdiction also requires all companies incorporated in Hong Kong to maintain beneficial ownership information. In 2019, the financial intelligence unit received a total of 51,588 STRs and there were 103 money laundering convictions.
-Source: 2021 International Narcotics Control Strategy Report (INCSR)

Rankings

FATF i | 2013 Methodology

Technical Effectiveness
Compliant : 11 High : 0
Largely Compliant : 25 Substantial : 6
Partially Compliant : 4 Moderate : 5
Non-Compliant : 0 Low : 0

Hong Kong's technical compliance was re-rated in a Feb 16, 2023 follow-up report.

BASEL i

Rank : 54/110
Score : 5.2/10

TRANSPARENCY INTERNATIONAL i

Rank : 11/179
Score : 77/100

Tax Justice Network i

Rank : 4/133
Score : 66/100