An official review of local charities and non-governmental organisations is to be carried out to find out if they can be misused to finance terrorists.
The review, which may also cover schools and religious groups, aims to assess if the SAR has adequate laws to control organisations that could be subject to such misuse.
The move was one of the eight recommendations made by the 29-country Financial Action Taskforce on Money Laundering in October.
The taskforce, chaired by Hong Kong, worked out the action plan to combat the financing of terrorism after the US investigation into the September 11 suicide hijackings revealed that some charities were used to finance terrorists.
Hong Kong's Narcotics Division will produce a report by June about the progress of complying with the plan. Other recommendations, including criminalising the financing of terrorism and freezing and confiscating terrorists' assets, are being studied by the Security Bureau.
Commissioner for Narcotics Clarie Lo Ku Ka-lee, also president of the taskforce, said yesterday the review would be comprehensive.
The division's legal consultant, Judy Maguire, said charities and non-governmental organisations were more vulnerable to misuse, partly because they did not need to be accountable to shareholders.
The taskforce will hold a three-day international conference in Hong Kong from January 30.