Hong Kong’s efforts against both money laundering and financing of terrorism have been recognized in a mutual evaluation report published July 21 by the Financial Action Task Force on Money Laundering (FATF) and the Asia/Pacific Group on Money Laundering (APG).
The FATF is the international standard-setter on anti-money laundering and counter financing of terrorism (AML/CFT). The report was endorsed at a June FATF Plenary meeting and at this month’s APG annual meeting.
The report recognizes the strengths of Hong Kong’s AML/CFT programs. The assessment team lauded the establishment of the Central Coordinating Committee on Anti-Money Laundering and Counter Financing of Terrorism. The committee is chaired by Financial Secretary John C. Tsang.
The report commends Hong Kong for its solid legal structure with a satisfactory conviction rate for money-laundering offenses, clear and broad obligations for reporting suspicious transactions and strong law-enforcement efforts.
Investigators found the supervisory system of the banking, securities and insurance sectors effective, with comprehensive obligations and a fairly broad range of sanctions.
The report acknowledges the prompt provision of a wide range of international cooperation, and commends its outreach to the private sector in raising its awareness. The report also cites Hong Kong's Joint Financial Intelligence Unit as proactive and effective.
In addition, Hong Kong law enforcement has been aggressive in dealing with remittance agents and money changers. However, the report recommends an enhancement in the AML/CFT regulation , which the Hong Kong Special Administrative Region Government will address by consulting industry authorities, according to a government spokesman.
The spokesman also noted the government will expedite the completion of subsidiary legislation against the financing of terrorism.
The Narcotics Division of the Security Bureau led the Hong Kong delegations to the FATF Plenary meeting and the APG annual meeting. Also in attendance were representatives from the Financial Services and the Treasury Bureau, Hong Kong Monetary Authority, Securities and Futures Commission, Office of the Commissioner of Insurance, Department of Justice, Hong Kong Police Force, Customs and Excise Department and Companies Registry.
As a member of the FATF, Hong Kong adopted the agency’s 40 recommendations for fighting money laundering and the nine special recommendations for combating financing of terrorism (known collectively as “40+9 Recommendations”).
This is the first timeHong Kong is evaluated since the FATF recommendations were revised in 2003. The joint mutual evaluation was conducted by both FATF and APG members, who assessed each other's compliance with the 40+9 recommendations and helped identify areas of improvement.
Hong Kong has been a FATF member since 1991 and a founding member of APG since 1997.
The report can be obtained from the FATF Web site [www.fatf-gafi.org] or APG Web site [www.apgml.org].
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