Private sector bribery strictly enforced

A company director was sentenced to 10 weeks' imprisonment for offering a HK$1000 bribe to a bank clerk for assisting him in setting up a bank account. The director was found guilty of offering an advantage to an agent (the bank clerk), contrary to section 9(2) of the Prevention of Bribery Ordinance.

The case arose out of circumstances where in the process of applying for a business account at a bank branch, the director submitted insufficient documents. He asked the assistant manager if the account could be opened without the required documentation. After signing the account opening form, the defendant passed it, together with a HK$1,000 banknote, to the assistant manager saying that the money was for the assistant manager to “have tea” and “take good care” of the account.

The assistant manager declined the offer immediately and asked the director to take the money back, which he did. The assistant manager reported the matter to the bank (his principal), who reported it to the authorities.

The case confirms that the mere offer of a relatively small advantage is clearly sufficient to lead to prosecution in Hong Kong. Although no money eventually changed hands, the director was swiftly prosecuted, found guilty of bribery and sentenced to jail.  

Focus on AML/CTF by Hong Kong's financial regulators

Hong Kong's main financial regulators, the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA), have underlined the importance of ensuring compliance with AML/CFT requirements in the territory.

The SFC has recently suspended a former responsible officer of a brokerage firm, Guoyuan. The disciplinary action follows the SFC’s earlier action against Guoyuan over its breach of anti-money laundering and counter-terrorist financing requirements. The company had failed to conduct proper enquiries to mitigate the risks of money laundering and terrorist financing when processing third party fund deposits and withdrawals for clients.  Mr Hui was the responsible officer and senior management officer handling and approving third party fund transfers. The Hong Kong Monetary Authority (HKMA) has recently published revised frequently asked questions (FAQs) on customer due diligence. These cover whether all corporate customers need to provide a business registration certificate for the purpose of verifying their identities, and confirms why certification of documents is required as part of the customer due diligence process. The practical document has new content on:

  • who should be treated as a person purporting to act on behalf of a corporate customer;
  • examples of identification documents that can be used for verifying a customer's identity in addition to those identified in the Guideline on Anti-Money Laundering and Counter-Terrorist Financing; and
  • what authorised institutions should do where identification documents of customers are in a foreign language.
Finally, the HKMA (in collaboration with the Hong Kong Police Force, the Hong Kong Association of Banks and various banks) recently launched the Fraud and Money Laundering Intelligence Taskforce (FMLIT), a 12-month pilot project to enhance the detection, prevention and disruption of serious financial crime and money laundering threats.