The Joint Financial Intelligence Unit (JFIU), which handles reports of suspicious financial activity from the public, has adopted a system of classifying alleged money laundering activities on the basis of risk. According to a letter issued by the Hong Kong Monetary Authority to all banks yesterday, the JFIU adopted the new risk-based classification system on October 1 with the aim of streaming reports of suspicious transactions into three categories: low risk, unresolved or confirmed crime. The 'low risk'' category would apply to cases where there was insufficient evidence to establish whether a crime had been committed. The 'unresolved' tag would apply to those cases where investigators had good grounds to believe that a crime had been committed but for some reason had dropped the probe. Where investigators had discovered strong evidence a crime had been committed, the label 'confirmed crime' would apply. The unit, however, said the tag would not necessarily lead to an arrest or a prosecution. The unit said in its letter to the HKMA that the new approach was aimed at 'streamlining the processing of suspicious transactions reports and providing better feedback to reporting entities''. Following the investigation, the JFIU would send its report back to the financial institutions with the classification of its results. Hong Kong, which has one of the toughest anti-money laundering laws in Asia, requires all financial institutions to report suspicious transactions to the JFIU.