Hong Kong is battling to “address gaps” in the fight against dirty cash as it struggles to tackle a mountain of money laundering reports that have piled up in recent years, a landmark government report released on Monday night has revealed. Two days after it emerged that the city’s financial system is groaning under a deluge of suspicious transaction reports, mostly from banks, an official risk assessment of the challenges Hong Kong faces has described the rise in money laundering reports as “significant”.
The official risk assessment that Niall Fraser refers to in his article for the South China Morning Post is the “Hong Kong money laundering and terrorist financing risk assessment report”, released on Monday, April 30th. Produced by the Financial Services and Treasury Bureau, this “132-page report came as local authorities prepared for a major audit of the city’s anti-money-laundering capabilities by a team from the Paris-based international dirty money watchdog, the Financial Action Task Force (FATF)” (which Hong Kong is a member of).
Many are interpreting the report as “de facto admission that the current, local anti-money-laundering regime is under stress”, but it should be mentioned that solutions are being pursued.
For us at Know Your Customer, the rising volume of suspicious activity reports is a clear pointer that the threat of money laundering in Hong Kong’s system can only be properly addressed with more AML/KYC process automation.