Hong Kong

New Documents

HKMA Seeks Industry Feedback on CBDC Research Report

The Hong Kong Monetary Authority released a technical paper, analyzing the risks and benefits of issuing retail central bank digital currencies in Hong Kong.

October 7, 2021

HKMA Recommends Anti-Fraud Measures Concerning Electronic Direct Debit Authorization

The Hong Kong Monetary Authority published the results of a review on simplified electronic direct debit authorization and provided related recommendations on anti-fraud good practices.

October 7, 2021

Hong Kong SFC Issues Cybersecurity Guidance to Licensed Entities

October 6, 2021

HKMA Shares Feedback Following AML/CTF Thematic Review of SVF Licensees

September 29, 2021

BIS Innovation Hub, Multiple Central Banks Publish Joint Report on CBDC Platform for International Payments

September 29, 2021

News

Weekly Roundup: Binance Withholds AML Cooperation, India Targets Human Hair Exports, and More

OFAC informally clears humanitarian transfers to Afghanistan, U.S. officials fine Chinese bank and Romanian bank, and more, in the weekly roundup.

August 27, 2021

Midweek Roundup: Afghanistan’s Financial System Grinds to Halt, Taliban Orders Banks to Reopen, and More

U.S. officials target Paraguayan money laundering network, N26 pledges better AML controls, and more, in the midweek roundup.

August 25, 2021

Weekly Roundup: New York Top Regulator Resigns, Bermuda Fines Allianz, and More

August 13, 2021

Weekly Roundup: Deutsche Bank Accused of Ignoring Ponzi Scheme, Italy Investigates US Hedge Fund’s Insurance Branch, and More

July 23, 2021

Weekly Roundup: Nigerian FIU Denounces Politicians, California Movie Producer Accused of Leading Prostitution Ring and Laundering Profits, and More

July 16, 2021

Enforcement Actions

Hong Kong SFC Bans Two Executives of Sino-Rich Securities and Futures Limited for AML/CTF Failures

The Hong Kong Securities and Futures Commission issued an order suspending the licenses of two executives of the Hong-Kong-based asset management company for failing to comply with their anti-money laundering and counterterrorist financing obligations.

July 20, 2021

Hong Kong SFC: Yardley Securities Limited CEO Fined $400,000, Reprimanded for AML/CTF Failures

The Securities and Futures Commission of Hong Kong reprimanded and fined Raymond Leung Tak Shing, CEO and money laundering reporting officer of the Hong Kong-based firm for his failure to comply with anti-money laundering requirements.

July 7, 2021

Hong Kong SFC Issues $5 Million Fine to Yardley Securities Limited for AML/CTF Violations

March 23, 2021

Hong Kong SFC Orders Sino-Rich Securities and Futures Limited to Pay $7.2 Million for AML/CTF Failures

March 16, 2021

Hong Kong SFC Orders Goldman Sachs (Asia) L.L.C. to Pay $350 Million Fine for AML Deficiencies Linked to 1MDB Scandal

October 22, 2020

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

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