Hong Kong

New Documents

The Hong Kong Monetary Authority announced the planned launch of iAM Smart, an initiative tool aimed at helping licensed entities and Stored Value Facility licensees, as well as financial institutions, to conduct commercial transactions online.

The Hong Kong Monetary Authority issued a notice to licensed entities concerning an updated report from the Financial Action Task Force on COVID-19-related money laundering and terrorist financing risks.


Enforcement Actions

The Securities and Futures Commission issued a disciplinary action against the Hong Kong-based subsidiary of The Goldman Sachs Group, Inc., requiring it to pay a $350 million fine for serious supervisory, risk, compliance and anti-money laundering controls deficiencies.

The Hong Kong Securities and Futures Commission issued an order banning Joanna Chu Lai Wa, former director and responsible officer of Shenzhen, China-based Guosen Securities (HK) Brokerage Company, Limited for her failure to implement adequate AML/CTF controls.

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. Groups involved in money laundering range from local street organizations to sophisticated international syndicates, including Asian triads involved in various criminal activities. 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, such as North Korea and Iran, 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, smuggling and vice. Hong Kong requires financial institutions and designated non-financial businesses and professions to comply with customer due diligence procedures and record-keeping requirements. Hong Kong implemented a system in 2018 for the declaration and disclosure of physical cross-border transportation of currency and bearer negotiable instruments. The jurisdiction also requires all companies incorporated in Hong Kong to maintain beneficial ownership information. From Jan. 1 through Sept. 30, 2019, the financial intelligence unit received a total of 37,816 suspicious transaction reports and there were 83 money laundering convictions in Hong Kong.
-Source: 2020 International Narcotics Control Strategy Report (INCSR)


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


Rank : 80/141
Score : 4.99/10


Rank : 16/180
Score : 76/100

Tax Justice Network i

Rank : 4/133
Score : 66/100