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Following is the speech by the Secretary for Security, Mrs Regina Ip, in moving the second reading of the Organized and Serious Crimes (Amendment) Bill 1999

in the Legislative Council today (Wednesday):

Madam President,

I move the Organized and Serious Crimes (Amendment) Bill 1999 be read for the second time.

Hong Kong has for a long-time been committed to combating money laundering through a comprehensive legislative framework and a range of administrative measures. The activities of various financial institutions such as banks, securities and futures companies and insurance companies, etc., are vigilantly controlled under their respective regulators and the relevant legislation. There is, however, no legislation that regulates remittance agents and money changers.

Remittance agents and money changers have internationally been identified as an important link in the money laundering chain. In February 1997, the Police issued to the two businesses administrative guidelines on anti-money laundering. Subsequent surveys confirmed that although some remittance agents and money changers adhered to some of the requirements, the information kept was sketchy and in most cases was not sufficient for the purpose of investigating suspected money laundering operations.

The Bill requires that all persons carrying on remittance and money changing businesses, except for a number of financial institutions currently under the supervision of their respective regulators and the relevant legislation, are to comply with basic anti-money laundering measures, including identifying customers and keeping transaction records for at least six years.

To minimise disruption to the trade and its clients, the Bill provides that for transactions below $20,000, the requirements will not apply.

To enable the Government to keep a comprehensive and up-to-date record on remittance agents and money changers to effectively enforce the new requirements, a register is to be kept by the Government. Existing remittance agents and money changers are required to notify an officer responsible for keeping the register of their names and addresses within three months after the enactment of the Bill, and, in the case of new remittance agents and money changers, within one month after they come into operation following the enactment of the Bill.

The Bill also empowers authorized officers to enter the premises of remittance agents and money changers on suspicion that such institutions have breached the new statutory requirements.

We have consulted remittance agents and money changers and they generally supported the proposals. We have also consulted the Action Committee Against Narcotics, the LegCo Panel on Security, the Privacy Commissioner for Personal Data, the two legal professional bodies, financial regulators and associations including the Hong Kong Association of Banks, etc. All such organizations did not object to the proposals.

Madam President, the Bill will certainly enhance the effectiveness of our anti-money laundering regime without causing undue disruption to the affected businesses. I hope Members will support the Bill. Thank you.

End/Wednesday, April 21, 1999

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