Government publishes important money laundering and terrorist financing risk assessment
Hong Kong's Money Laundering and Terrorist Financing Risk Assessment Report has assessed the Special Administrative Region's overall money laundering risk, threat and vulnerability as "medium-high". See our e-bulletin here for a summary of the report. The banking sector was considered especially vulnerable, receiving a risk rating of "high" (see our e-bulletin here). The situation surrounding terrorist financing is less of a concern, with the report assessing Hong Kong as having a "medium-low" risk level.
The report was issued in response to the recommendation of the Financial Action Task Force ("FATF") for jurisdictions to identify and assess their Money Laundering and Terrorist Financing risks and apply mitigating measures.
Suspicious transaction reports have nearly tripled in the five years to 2017, partly due to increased monitoring and better compliance since the introduction of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance in 2012. The report described coping with the increase as a "challenge", but identified a number of areas for follow-up action, many of which have already been implemented. These include updating the legal and regulatory framework, reinforcing the adoption of a risk-based approach in preventative and supervisory measures, stepping up efforts to restrain and confiscate proceeds of crime and strengthening international cooperation.