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  • Dec 20, 2014
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CommentInsight & Opinion

Hong Kong needs increased vigilance over money laundering

PUBLISHED : Tuesday, 29 January, 2013, 12:00am
UPDATED : Tuesday, 29 January, 2013, 4:25am

Hong Kong's free market means we are open to criminals taking advantage of our liberal regime. While the government thinks it has put in place tight controls against money laundering and other illegal activities, prosecutions and convictions do happen from time to time. The recent conviction of the biggest laundering case in a local court underlines the need for better efforts to uphold the city's fine reputation as an international financial centre rather than a haven to get rid of dirty money.

It is shocking that a young mainlander from Guangdong managed to move in and out a record HK$13.1 billion with a local bank account over a period of eight months since 2009. At a rate of HK$50 million a day, he made 4,800 deposits and 3,500 transfers across the border through Chiyu Bank, most of which were done on the internet. The disclosure has raised questions over the vigilance of our banking system.

When handing down a 10-and-a-half-year jail term, the district court judge described the case as the most serious of its kind. She rightly called for a review of the 14-year maximum penalty. According to police, the number of suspicious transactions reported to the Joint Financial Intelligence Unit in 2011 was 20,287. There were 17,795 reports up to September last year. It shows the city is an attractive place for laundering.

The government regards our city as the region's money-laundering policeman. Content with its regulations and vigilance, it is likely to brush aside suggestions that our regime is prone to abuse. But as China is expected to get tough on corruption and the declaration of assets for officials under the new leadership, there is a need for Hong Kong to guard against attempts to move ill-gotten money across the border.

The last thing we want is to be billed as a haven for international money laundering. We cannot afford to have our reputation tarnished by illegal activities. The government should stay alert to the trend and adopt an open mind on tougher penalties to ward off law breakers.


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This article is now closed to comments

By the way, has any action been taken against the officials of the Chiyu Bank?
"......the city's fine reputation as an international financial centre". Is this a joke? Hong Kong is notorious as a money laundering haven. Bluechinagroup is absolutely correct about suitcases full of cash coming over the border to be laundered, especially in property. These sums are predominantly the proceeds of corruption and crime and have at times accounted for between a third and 40% of all property purchases in HK, with a correspondingly huge impact on prices and rents.
Our money laundering laws are perfectly adequate; the problem is that they have not been obeyed by a number of financial institutions and professionals who handle the money and one wonders why those laws have not been properly enforced. The property developers must love these criminals while the ordinary HK citizens suffer. What we need is a Government with the will and determination to thoroughly investigate and enforce the existing laws. Unfortunately, the administration is more concerned with maintaining a myth rather than adding substance to its claims that Hong Kong is clean.
And most of them dare to claim our Free economy must remain whereas nice word to hide the money laundry one.
I thought they should give this young mainlander a banking license instead of a jail term. Do the editorial staff at SCMP realize that HK exists to launder money from China?
Such a ridiculous and naive article. Mainlanders are bringing in suitcases full of cash and laundering it through property purchases and jewelry. Nobody is even batting an eye about it. Besides not even the toughest money laundering laws stop money laundering. It just makes things more difficult for everybody else while the money launderers just go deeper underground.
Some of the people who write this stuff really have empty heads.


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