As we noted in our December 2015 Financial Litigation briefing, Hong Kong was well on course to break her “PB” (personal best) for anti-money laundering suspicious transaction reports (STR) in 2015. Based on statistics available from the Joint Financial Intelligence Unit (JFIU – the relevant reporting organisation in Hong Kong26) there were 42,555 STR in 2015 (compared with 37,188 in 2014); an increase of approximately 15%.27 In the first quarter of 2016, there have been 13,297 STR; therefore, one can confidently predict that the number of STR this year will exceed 2015.
The statistics need some perspective. The number of STR in Hong Kong has increased annually in the last five years. This is as much a reflection of the heightened awareness in Hong Kong of the need to report “suspicious” transactions in the finance industry and other business sectors. The vast majority of STR are (of course) made by the banks. However, there is an increased level of reporting in other sectors, including professional service providers. For example, in 2015 there was a fourfold increase in the level of STR made by the legal sector (which is principally law firms). Further, “intel” suggests that in the run-up to the Financial Action Task Force’s next mutual evaluation of Hong Kong (thought to be in the Spring of 2018), local regulators may have (among others, for example) some money service operators, estate agents and company secretarial service providers in their sights.28