Hong Kong bank’s ‘inconvenient’ disclosure demands extend to hurt local NGO

Social welfare campaigner calls for different requirements for customers that pose different levels of illegal activity risk

PUBLISHED : Saturday, 04 February, 2017, 7:28pm
UPDATED : Saturday, 04 February, 2017, 11:09pm

Strict disclosure requirements imposed by some Hong Kong banks, which have long burdened foreign-owned companies, have extended to some local NGOs, the Post has learned.

Veteran social welfare campaigner Ho Hei-Wah, director of Society for Community Organisation, said his organisation had to supply a raft of documents to HSBC within the space of just a month, or face having its accounts suspended without notice.

Though the matter is now settled, Ho said the process had caused him and his organisation a lot of stress, and the letter he received from the bank was quite frightening.

“They said they would stop my accounts in just one month if we didn’t supply the documents, how can we operate?” he said.

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Documents required by the bank included a Certificate of Incumbency issued within the last six months, the organisation’s last annual return and proof of address for all directors.

“Our directors are not our staff. I have to ask for their latest address proof, one by one – such as electricity bills. It is very tedious.”

Maybe they could set up different levels of disclosure requirements to distinguish the different risk levels

He said he understood some NGOs also faced issues opening new accounts, despite being a long-time customer.

“If we want to open an additional account... all the directors are required to go and get everything checked again,” he said.

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“While I understand the need of the banks to check such information to fight illegal banking activities, like money laundering, this brings a lot of inconvenience.

“Maybe they could set up different levels of disclosure requirements to distinguish the different risk levels, such as between decades-old local NGOs and new overseas companies setting up for the first time in Hong Kong.”

But it seems not all NGOs face the same problem.

Yeung Mei, executive director of Tung Kung, an NGO that helps newly arrived mainlanders, said her organisation did not receive such requests from its bank.

“Maybe ours is a small organisation, and our bank is Nangyang Commercial Bank, a mainland bank,” said Yeung.

An HSBC spokesperson said regular customer information updates and checks were an important part of its efforts to “protect the financial system from criminal activity.

A spokesperson from the Council of Social Services said it had not received reports of any bank accounts being cancelled as a result of failing to supply directors’ latest information.