Hong Kong

New Documents

Hong Kong: Two Men Arrested for ML in HK$3.5 Billion Case Involving Trade in Precious Metals

Hong Kong Customs and Excise Department arrested two suspects for money laundering involving the sale of precious metals amounting to approximately HK$3.5 billion, the highest recorded money laundering case detected by the agency to date.

November 2, 2022

Hong Kong Central Bank Launches Commercial Data Interchange

The Hong Kong Monetary Authority launched a commercial financial data infrastructure and accompanying framework as part of its Fintech 2025 strategy.

November 1, 2022

Hong Kong SFC Official Urges Firms to Adopt Regtech

October 31, 2022

HKMA Chief Executive Delivers Remarks During Hong Kong FinTech Week

October 31, 2022

BIS, Other Regulators Publish Joint Report on Multi-CBDC Arrangements

October 26, 2022

News

Midweek Roundup: Crypto Firms Drive European Surge in STRs, US Charges Chinese Spies, and More

Germany creates sanctions unit, Singapore introduces crypto measures, and more, in the midweek roundup

October 26, 2022

Weekly Roundup: Vermont Lender Reaches ‘Compliance Capacity,’ China’s UnionPay Rejects Russian Bank Cards, and More

FBI raids Russian billionaire’s properties, money laundering trial of hip-hop artist scheduled for November, and more, in the weekly roundup.

September 2, 2022

Midweek Roundup: Russian Superyacht for Sale, Conmen Sold Victims Antarctica Passports, And More

August 24, 2022

Midweek Roundup: Former US Lawmaker Charged with Fraud, Alleged Mafia Associate ‘Joe Fish’ Faces Money Laundering Trial, and More

August 17, 2022

Weekly Roundup: Baltic Banks on Frontline of Western Financial Embargo of Russia, US Prosecutors Target Abacha Assets, and More

August 5, 2022

Enforcement Actions

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

The Hong Kong Monetary Authority imposed a financial penalty of HK$11 million on the Hong Kong branch of the Taipei, Taiwan-based financial institution for violations of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.

September 29, 2022

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

Hong Kong’s Securities and Futures Commission suspended Tang Kai Shing, managing director of Rifa Futures Ltd., for a period of eight months beginning on Sept. 2, 2022, for breaches of know-your-customer, AML/CTF and other regulatory requirements.

September 18, 2022

HKMA Finds AML/CTF Noncompliance by Commerzbank AG Hong Kong, Imposes Fine of HK$6 Million

August 31, 2022

Hong Kong SFC Fines Rifa Futures Ltd. HK$9 Million For AML/CTF Breaches

August 3, 2022

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

June 23, 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