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Crime in Hong Kong

Billions of dollars declared under Hong Kong’s dirty cash law – one traveller had US$29 million

Total of HK$42 billion declared by 3,500 travellers at city’s borders after new law comes into force

PUBLISHED : Wednesday, 03 October, 2018, 6:29pm
UPDATED : Thursday, 04 October, 2018, 2:09pm

A traveller carrying HK$230 million (US$29 million) in cash was among the 3,500 people who declared a total of HK$42 billion (US$5.36 billion) as they entered Hong Kong in the last 2½ months, after a new law came into effect, the Post has learned.

The legislation, meant to tackle the problem of dirty cash, requires travellers to declare of sums of more than HK$120,000 when coming into the city.

One traveller declared HK$230 million in an assortment of currencies, according to a law enforcement source.

“This cash was stored in more than three waterproof bags while being delivered by hand to Hong Kong from an Asian country via sea,” he said.

The Post understands that the traveller worked for a financial institution and came with hired guards.

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More than 80 per cent of the 3,500 travellers declaring currency worked for financial institutions such as banks and money changers, the source said.

Sixty-four per cent arrived via sea and another 33 per cent came by air. The remaining 3 per cent used land borders and railway boundaries. Most came from Asian countries.

In the same period there were 2,088 cargo declarations worth a total of HK$265.9 billion. Some 925 involved imports and 1,163 exports.

Meanwhile, 15 travellers collectively carrying almost HK$10 million have been issued warnings for entering Hong Kong without declaring since the law came into effect in mid-July.

Nine Hongkongers and six foreigners aged between 23 and 67 were found carrying amounts ranging from HK$130,000 to HK$5 million. Fourteen failed to disclose the funds and walked through the green “nothing to declare” channels at land, sea and air ports, while one declared the wrong amount, the Customs and Excise Department said.

Assistant commissioner Louise Ho Pui-shan said the department believed the 15 offenders had not purposely avoided declaration.

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Most entered through land ports, three at airports and two via sea between July 16 and September 24 – well within the three-month grace period in which offenders are only given warnings unless found to be involved in terrorist financing.

“For these 15 cases, through the interrogation process, we believe they were unintentional, with offenders not clear about the new law and the requirements,” Ho said.

The offender carrying the most cash – HK$5 million – was a jewellery purchasing specialist using the currency to buy from a supplier for the first time. Customs officers consulted industry experts and concluded it was reasonable for such buyers to carry that much cash.

A video run on the website of the Hong Kong Monetary Authority in July asked how much cash in HK$1,000 notes would fit in one of the red, white and blue nylon travelling bags much beloved by locals. The answer was HK$70 million.

The customs department has also issued warnings to the owners of two incoming shipments, one through the airport and the other via a land port. In both cases, the goods were commemorative coins and the owners did not realise they had to declare, officials said.

The law aims to prevent criminal proceeds and terrorist funds from entering the city. Travellers in possession of currency or “bearer negotiable instruments” such as cheques or money orders valued at more than HK$120,000 must declare. Cargo owners have to make the declaration in advance.

The control points are Lo Wu, Hung Hom station, Man Kam To boundary, Sha Tau Kok boundary, the Macau ferry terminal, China Ferry Terminal, Lok Ma Chau boundary, Hong Kong International Airport, Tuen Mun Ferry Terminal, Shenzhen Bay Port, Lok Ma Chau spur line, Kai Tak Cruise Terminal and Ocean Terminal.

Travellers must declare cash sums larger than HK$120,000 under new law

Departing passengers are only required to declare at the request of officials.

According to the Joint Financial Intelligence Unit, made up of police and customs officers, reports of transactions with suspected links to money laundering or terrorist financing increased from 20,287 in 2011 to 92,115 last year.

 

Officials reminded travellers that the grace period for the new law would end in two weeks, on October 16.

Any first-time offenders will be fined HK$2,000. Repeat offenders will be fined HK$500,000 and jailed for a maximum of two years without prior warning.

Officers would be using four Labradors brought in from Britain to sniff out cash, the department said.