Hong Kong money laundering and terrorism financing reports hit record high

A backlog of suspicious financial transactions in Hong Kong’s banking industry was named as the reason for a dramatic upsurge in reports of money laundering and terrorist financing.

The Joint Financial Intelligence Unit (JFIU), a 50-member outfit comprising police and customs officials, received 59,730 reports of suspicious financial activity in the first nine months of this year. That’s an average of 200 reports every day.

It’s the most the JFIU has received in a single year since its establishment in 1989. It represents a 40 per cent increase from the 42,555 reports received during the whole of 2015, and dwarfs the 4,427 reports received in 1997.

Government sources with the knowledge of the unit’s operations said the rise stemmed from a flood of reports lodged by the banking industry after the Hong Kong Monetary Authority enhanced reporting and monitoring requirements.

“Bank and financial institutions are required to clear the backlogs and hence they have injected substantial resources in expediting the filing of suspicious transaction reports, which resulted in an upsurge of cases received by the JFIU,” one source said.

In a HKMA’s journal titled InSight, published October 31, Chief Executive Norman Chan Tak-lam said some banks applied only a single standard to vet customers with regards to anti-money laundering requirements. Some failed to meet the HKMA’s “risk-based approach” principle, and were not in line with the spirit of financial inclusion…. see more

source: scmp

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