Hong Kong

New Documents

Hong Kong, Israel Central Banks Partner on Retail Central Bank Digital Currency Research

The Hong Kong Monetary Authority, together with the Bank of Israel and the Bank for International Settlements Innovation Hub’s Hong Kong Centre announced a joint research initiative to explore cybersecurity issues in the context of retail central bank digital currency.

June 27, 2022

Hong Kong Anti-Organized Crime Operation Leads to Arrests

A tripartite anti-crime operation led by Hong Kong, Guangdong, and Macao police authorities has resulted in the arrests of 1,837 persons and seizures of drugs and illicit goods worth over HK$100 million.

June 27, 2022

HKMA Issues Study on Retail Central Bank Digital Currency

May 3, 2022

Hong Kong SFC Releases Quarterly Report

February 24, 2022

Hong Kong SFC Highlights Updated AML/CTF Self-Assessment Checklist

February 3, 2022

News

Midweek Roundup: Binance Handled Billions of Dollars in Suspicious Funds, Guptas Arrested in Dubai, and More

U.K. lawmakers target legal entities in Northern Ireland, Hong Kong arrests 16 suspected money launderers, and more, in the midweek roundup.

June 8, 2022

Midweek Roundup: Glencore Nears Bribery Settlement, Mexico Freezes Casino Accounts, and More

Russians using Visa and Mastercard, U.K. agents raid blacklisted oligarch’s home, and more, in the midweek roundup.

May 25, 2022

Midweek Roundup: White House Seeks More Funds for FinCEN, US Lawmakers Want Credit Suisse to Disclose Russian Ties, and More

March 30, 2022

Weekly Roundup: USAA Hit with $140 Million Fine, OCC Claims Power to Waive SAR Requirements, and More

March 18, 2022

Midweek Roundup: FinCEN Pitches New SAR Sharing Initiative, US Broker-Dealer Cops to AML Breaches, and More

January 26, 2022

Enforcement Actions

Hong Kong SFC Fines China Everbright Securities Limited $3.8 Million For AML/CTF Failures

Hong Kong’s Securities and Futures Commission reprimanded and fined the Shanghai, China-based securities brokerage firm $3.8 million for failures to comply with its anti-money laundering and counterterrorist financing regulatory requirements

June 23, 2022

Hong Kong Fines Emperor Securities Limited, Emperor Futures Limited HK$5.4 Million for AML Violations

The Securities and Futures Commission (SFC) penalized the Hong Kong-based financial institution and brokerage entity Emperor Securities Limited and Emperor Futures Limited, collectively known as Emperor, for failing to implement effective controls on third party deposits and payments.

March 17, 2022

Hong Kong’s SFC Fines South China Commodities Limited HK$4.8 Million for AML Deficiencies

February 17, 2022

Hong Kong Insurance Authority Imposes HK$7 Million Fine on Metlife Limited for AML/CTF Failures

February 2, 2022

Hong Kong SFC Fines Zhonghui International Futures Company Limited HK$5 Million for AML Deficiencies

January 20, 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

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