HKMA doubles the guard against money laundering
Investigating team goes from 11 to 22 to keep an eye on banks after tough regulations imposed
The Hong Kong Monetary Authority will double its money-laundering investigative team to check for any failure by banks in their control systems to prevent illicit cash flows.
The authority's senior manager for anti-money laundering, Stewart McGlynn, said the team would grow from the present 11 to 22.
He was speaking about the implementation of a tougher law for financial institutions that took effect in April last year.
The authority this month also issued guidance material and held seminars to urge banks to strengthen their anti-money laundering measures.
McGlynn denied that the recent efforts were related to high-profile money laundering court cases that led lawmakers to urge tightened regulations for banks.
Last month, public housing tenant Lam Mei-ling, 61, who moved more than HK$6.7 billion through nine Hong Kong banks over almost four years was jailed for 10 years. This followed the jailing of mainlander Luo Juncheng, 22, in January for 10½ years for laundering HK$13 billion.
McGlynn said banks had done their duty with a strong increase in reporting.
Last year, 82 per cent of 23,282 suspicious-transaction reports were made by banks, and the rest by other types of financial firms, such as brokers or insurers. The number was more than double the 10,871 in 2002.
"The increase is mainly due to banks having increased their awareness of reporting suspicious transactions over the past 10 years," McGlynn said.
Overseas regulators recently have taken a tougher stance towards banks in relation to money laundering. HSBC agreed to pay a record US$1.92 billion in fines in December to settle a money-laundering and terrorist-financing charge by US authorities.
McGlynn said each market had its own laws, just as Hong Kong had introduced last year's new law imposing heavy fines on banks without anti-money-laundering measures.
Under the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance, banks, brokers, money exchangers and insurers must conduct more rigorous checks on suspicious cash transactions.
They must perform more due diligence on a customer's background, keep records and have procedures to make sure staff report suspicious cases.