Hong Kong

New Documents

Hong Kong SFC Amends Al-Qaida, Islamic State Sanctions

The Hong Kong Securities and Futures Commission issued a notice to licensed entities and corporations concerning changes to the jurisdiction’s sanctions regime.

October 13, 2020

HKMA Chief Executive Highlights FinTech Development During Annual Banking Conference

Eddie Yue, the Chief Executive of the Hong Kong Monetary Authority, delivered the keynote speech at the Hong Kong Institutes of Bankers Annual Conference on the financial sectors’ goals for the year.

September 30, 2020

HKMA Clarifies Remote CDD, KYC Obligations for Licensed Institutions

September 30, 2020

HKMA Launches AML/CTF Surveillance Capability Enhancement Project

September 30, 2020

Hong Kong SFC Warns of Social Media-enabled Fraud Scams

September 29, 2020

News

Midweek Roundup: ‘FinCEN Files’ Fallout Begins, Belarus Escapes EU Sanctions, and More

Former high-ranking Maltese official arrested, OFAC targets Cuba and Iran, and more, in the midweek roundup.

September 23, 2020

Weekly Roundup: JPMorgan Chase Fired Staff Over Coronavirus Loan Fraud, Austria Investigates Bank Executive, and More

Publication of Swiss report into AML lapses at Credit Suisse delayed, Italian regulators allow ING to onboard domestic clients after 18-month pause, and more, in the weekly roundup.

September 11, 2020

Banks Brace For More Hong Kong Sanctions: Sources

August 31, 2020

Weekly Roundup: Citigroup Blocks Hong Kong Officials, Turkey’s Halkbank Challenges US Jurisdictional Claim, and More

August 12, 2020

Weekly Roundup: California Lender Hit with AML Fine, Former Compliance Manager Convicted in Swiss 1MDB Probe, and More

July 31, 2020

Enforcement Actions

Hong Kong SFC Bans Former Director of Guosen Securities (HK) Brokerage Company, Limited for AML/CTF Failures

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.

June 26, 2020

Hong Kong’s SFC Fines Guotai Junan Securities Over HK$25 Million for AML Deficiencies

Hong Kong’s Securities and Futures Commission penalized Guotai Junan Securities (Hong Kong) Limited HK$25.2 million for anti-money laundering violations that included improper handling of third party transfers and late reporting.

June 22, 2020

Hong Kong SFC Fines Southwest Securities (HK) Brokerage Limited $5 Million for AML Breaches

May 19, 2020

Hong Kong SFC Orders BOCOM International Securities Ltd. to Pay HK$19.6 Million for AML Violations

April 21, 2020

Hong Kong SFC Orders BMI Securities Limited to Pay HK$3.7 Million for AML Violations

February 11, 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. 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)

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 : 80/141
Score : 4.99/10

TRANSPARENCY INTERNATIONAL i

Rank : 16/180
Score : 76/100

Tax Justice Network i

Rank : 4/133
Score : 66/100