• Wed
  • Jul 30, 2014
  • Updated: 4:00am
NewsHong Kong
PROPERTY

Mainlanders buying flats should have cash vetted, says Legco member

Anti-money-laundering processes needed to verify funds used by property speculators from across the border, says new lawmaker

PUBLISHED : Monday, 24 September, 2012, 12:00am
UPDATED : Monday, 24 September, 2012, 9:26am

A newly elected lawmaker says anti-money-laundering vetting measures used by banks should be adopted in the property sector to verify the source of the cash from mainland speculators who buy flats in Hong Kong.

The idea is sure to irk developers, admitted Kenneth Leung Kai-cheong, who represents accountants, but he said he saw no reason why the property sector should be free from monitoring.

"If someone's got millions of dollars from bribes and he comes to buy an apartment, what's the difference from money laundering?" Leung said.

"A bank definitely won't open an account for a customer who comes with a suitcase full of dollar notes. If banks have to comply, why does the property sector not have to?" he said.

Leung, a tax specialist, was referring to the Hong Kong Monetary Authority's anti-money-laundering rules, which require licensed banks to check the identity of a customer before opening an account. The measure could be applied to buyers who were not permanent Hong Kong residents and should deter speculators, said Leung, a Housing Authority member.

A non-local buying an apartment with cash might need, for example, certification that he or she was employed by a large company, how long they had worked there and their income level, he said.

He said client checking would work better than imposing taxes on foreign buyers, which he felt would not deter speculators.

Leung said he would raise the idea in Legco's housing panel, although he did not expect a keen response.

Leung, a pan-democrat and vice-president of the think-tank Professional Commons, defeated Nelson Lam Chi-yuen in the Legco poll earlier this month. Lam was backed by Paul Chan Mo-po, the former accounting sector lawmaker who quit before his term ended in July to become development minister.

Leung said he and the chairman of Professional Commons, Charles Mok, who won the information technology seat, would not join any political party but they would take part in regular discussions with pan-democrats on council affairs.

He said he would support the pan-democrats' proposed motion of no confidence in Paul Chan, who is under intense scrutiny after exposés about subdivided flats operated by a company he once had a stake in.

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lucifer
This is a fantastic proposal. I have always wondered how all of these mainlanders were buying houses in HK with cash, when they are not allowed to take out more than $50000 per year? I am sure a lot of it is being laundered though Macau. Once a property is sold, the money is cleaned and can be deposited in the bank or sent somewhere else….Sadly, nothing will probably happen until the EU or US government puts pressure on the HK government.
eyetothetelescope
I completely agree with Mr. Leung's proposal.
kathyoktang1
I'm surprised that it's taken this long for lawmakers to raise this money laundering issue. Kenneth Leung, very well done!!
ed_kwok
I applaud Mr. Leung. Property is by far the biggest purchase for most Hong Kong citizens. The whole sector including the intermediaries (estate agents) should be regulated to the standard of the stock market and the insurance sector. We should not accept anything less.
 
 
 
 
 

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