The city's auction houses risk becoming a prime target for money laundering gangs, experts warn, as sales reach record levels.
With the spring auction season well under way in Hong Kong, one academic says the city's security in this regard is still far behind other markets, such as Britain, where auction houses are explicitly obligated to report suspicious transactions.
'[Auction houses are] even better than casinos, where you risk losing money,' said Simon Young Ngai-man, director of the centre for comparative and public law at the University of Hong Kong. 'With auctions, you're getting something of value, then you can sell it and continue the process of laundering.
'Naturally, auction houses are at risk simply because they handle so much money - and any kind of business that involves large sums of money can be vulnerable to money laundering,' Young said.
Julian Russell, director of Pacific Risk, which provides anti-money-laundering training to businesses, said auction houses were an ideal venue to disguise the transfer of funds, especially in large amounts.
Items from fine-art pieces to antiques and wine could be bought with cash intended for laundering and then later sold off, the expert said. Big-ticket sales of these items have made Hong kong the third-biggest auction market in the world, behind New York and London.
'Auction houses could be used by an individual money launderer by converting cash into goods at fair value, then moving the goods to another place, and perhaps then auctioning them back into cash again. In this manner the 'money trail' becomes hard to follow since it is not simply a cash trail,' Russell said.
