AML

HKMA investigates latest Hong Kong Money-Laundering Breaches

By June 27, 2014 No Comments

Recently, Hong Kong declared that there would be thorough investigations of several financial institutions and banks due to supposed breaches of the country’s money laundering laws. This will be the first time in years that these types of investigations will be carried out, and authorities are determined to get to the bottom of what has occurred.

It is no secret that Hong Kong is one of the most active financial centers of the world, and that is one of the reasons why it has such a high risk of having potential money laundering crimes occurring within its borders. Like many other countries, Hong Kong also puts strict regulations on its financial institutions and requires them to analyze their clients’ accounts, complete risk assessments, and report any suspicious activity that they may find.

Hong Kong adopted the Anti-Money Laundering and Counter-Terrorist Financing Ordinance over two years ago, and it still plays a vital role in the country’s financial sector to this day. This ordinance, which is better known as AMLO, was what allowed regulators in Hong Kong to acquire new powers and to be able to better enforce their laws.  For instance, because of AMLO, Hong Kong financial regulators are now able to take disciplinary action against any financial institutions or individuals who fail to meet the legal requirements that have since been established. This was a big step for the government, and has allowed Hong Kong to stop more corruption than ever before.

Many officials describe AMLO as being the first piece of legislation that has ever required financial institutions and companies to have due diligence in regards to money laundering. Never before have these institutions been forced to strictly follow anti-money laundering laws and regulations.

Despite the new powers that have been given to regulators, however, full investigations are rarely ever completed. It is only when the audits that are regularly carried out report back that money-laundering regulations are being breached that any investigations then go underway. At this moment in time, authorities are not releasing any information pertaining to the current investigations until they are fully completed.

It is known, however, that there is one small bank that is currently being investigated in regards to its money laundering controls and anti-money laundering procedures. Additionally, the AMLO requires that all financial institutions and banks conduct risk assessments regarding a well-known Chinese official who is considered to be a domestic PEP. The investigations will include determining whether or not institutions have been successfully accomplishing this, and if regulations and laws need to be increase and strengthened in order to protect the financial system.

The individuals who are found responsible for these money-laundering breaches will face both legal and financial repercussions. Most countries impose fines on financial criminals, as well as potential prison time, and Hong Kong is no different. Hong Kong has stated that they will release more information once they have properly completed their investigations and verified all that they have learned.

Image from: jonathan-fisher.co.uk

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