CommentInsight & Opinion

Progress on fighting money laundering is encouraging

PUBLISHED : Friday, 18 April, 2014, 3:14am
UPDATED : Friday, 18 April, 2014, 3:14am
 

No financial centre wants to see its reputation tainted by association with money laundering. On the face of it more than 33,000 reports to Hong Kong authorities of suspicious financial transactions last year - an increase of 40 per cent over 2012 - could be deeply worrying. Thankfully, according to police and customs financial investigators, the increase can be partly attributed to a number of positive factors, including the enactment of tighter legislation against money laundering and terrorist financing, fruitful co-operation with outside law enforcement agencies, particularly from mainland China, the United States and Australia, and enhanced public awareness through education.

Nonetheless, these figures are a reminder that, as a free port with a low tax regime where it is simple to set up a company, Hong Kong is attractive to those who want to launder ill-gotten gains and evade tax, even though local and international authorities may differ about the extent to which our city is implicated in cross-border financial crime.

Tighter regulation and stronger enforcement have created another problem for the law - competition for the services of people with the skills to monitor compliance with the law by companies and financial institutions. As a result, a number of experienced investigators have been lured to higher paid jobs in the private sector. Gloria Yu Yin-ching, superintendent of the Narcotics Bureau's financial investigation unit, denies her team lacks new talent, having hired 40 people since 2008.

An active recruiting programme is reassuring. But investigations to unearth enough evidence for prosecutions are time consuming. And money launderers are resourceful in their efforts to safeguard their ill-gotten gains. For the sake of the city's reputation as a financial centre, the government should do what it can to enhance the career path and rewards for officers who have the experience to match wits with wrong-doers, including the provision of relevant higher education.

The global financial crisis revealed a number of flaws in the international effort to combat money laundering, and Hong Kong was seen as part of the problem. The city could not continue to have its brand sullied in this way. Hence, as well as a new anti-money-laundering ordinance, it is also good to see a joint effort, with banks and financial institutions keeping a sharper lookout for suspicious transactions and police exchanging more intelligence with overseas counterparts.

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