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Following is a question by the Hon Kenneth Leung and a written reply by the Secretary for Security, Mr Lai Tung-kwok, in the Legislative Council today (April 22):
Question:
It has been reported that a Mexican drug trafficking syndicate uses Hong Kong as a base for money laundering and sources in Hong Kong the raw materials for manufacturing methamphetamine (commonly known as "ice"). Regarding the Government's measures to combat money laundering and control of the raw materials for manufacturing drugs, will the Government inform this Council:
(1) of the details of the current measures for combating money laundering; whether it has assessed the effectiveness of such measures in the past five years; if it has, of the outcome, together with a breakdown of (i) the overall statistics on money laundering cases and (ii) the statistics on money laundering cases relating to drug trafficking, in the past five years (set out in tables of the same format as Table 1 and Table 2);
(2) whether it has compiled statistics on the nationality distribution of the criminals engaging in money laundering in the past five years; if it has, of the details; and the authorities' new initiatives to educate the public not to engage in money laundering activities;
(3) as lawbreakers may use pseudoephedrine to manufacture drugs, of the current control in Hong Kong on such chemical and on drugs containing such chemical; of the import, export and re-export figures of Hong Kong relating to such chemical and drugs as well as the major countries to which they were exported, in each of the past five years; and
(4) whether it knows how many types of chemicals, apart from pseudoephedrine, are currently classified by other jurisdictions as the key raw materials for manufacturing drugs; of the export and import control on such chemicals in Hong Kong; and the details of the law enforcement actions in the past five years?
Reply:
President,
In consultation with the Financial Services and the Treasury Bureau (FSTB), the Food and Health Bureau, and relevant departments, the reply to the question is as follows:
(1) and (2) Hong Kong has in place a comprehensive and effective anti-money laundering/counter financing of terrorism (AML/CFT) regime. We have been actively implementing the recommendations of international organisations such as the "Financial Action Task Force" (FATF). The Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (Cap. 615) (AMLO) has been in full operation since April 1, 2012 with a view to fulfilling FATF's requirements and further strengthening the regulatory system of the financial institutions.
In respect of law enforcement, we take active actions, including applying to the court for restraint and confiscation orders to confiscate crime proceeds; as well as instituting prosecution in relation to money laundering crimes. According to information provided by the Department of Justice, the number of money laundering cases prosecuted, persons convicted, and value of assets restrained and confiscated in the past five years are in Annex 1.
As for public education, to strengthen AML/CFT capacity of different sectors, FSTB, the Security Bureau, and the Joint Financial Intelligence Unit (JFIU) established by the Hong Kong Police Force and the Customs and Excise Department (C&ED), maintain close contact with the financial sector and "designated non-financial businesses and professions", including arranging regular seminars for exchange of experience, publicising AML/CFT information as well as promoting the awareness of various trades of suspicious transactions reporting.
In addition, practitioners of relevant trades are required to carry out customer due diligence and record keeping in accordance with the AMLO, relevant industry practice circulars or guidelines. Regulatory authorities also issue notices regularly to remind trade members to pay attention to money laundering issues.
The JFIU has also set up a website (www.jfiu.gov.hk) to provide AML/CFT information to members of the public.
We do not have further breakdown on the statistics of money-laundering cases related to drug trafficking. We also do not maintain statistics regarding the nationalities of criminals involved in money laundering activities.
(3) Under Schedule 2 to the Control of Chemicals Ordinance (Cap. 145) (CCO), pseudoephedrine is a controlled chemical. Save for the situations described in the Ordinance, any person having in his possession, manufacturing, transporting, distributing, importing or exporting such substance commits a criminal offence.
In addition, according to the Pharmacy and Poisons Ordinance (Cap. 138) and the Pharmacy and Poisons Regulations (Cap. 138A), pseudoephedrine is a poison in Part I of the Poisons List. Save for the situations described in the Ordinance, any person selling or having in his possession such poison commits a criminal offence.
In the past five years, the figures for the import, export and transshipment of pseudoephedrine in Hong Kong are in Annex 2.
In addition, in the past five years, the contents of pseudoephedrine in the imports and exports of drugs in Hong Kong are in Annex 3.
We do not have transhipment figures for drugs containing pseudoephedrine.
(4) According to the "United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances 1988" (the 1988 Convention), there are, at present, 24 chemicals listed as precursors for the manufacturing of illicit drugs (Note). These chemicals have been brought under the control of the CCO, with both imports and exports subject to control. It is necessary to apply to C&ED for both a licence and an authorisation for the import or export of such chemicals. A removal permit is required to remove controlled chemicals which are in transhipment.
Moreover, C&ED undertakes strict enforcement actions in respect of the control of relevant chemicals at all boundary control points in Hong Kong. C&ED also formulates targeted plans taking into account the drug trafficking trends, so as to intercept drug trafficking activities. Internationally, C&ED maintains close liaison with Mainland and overseas law enforcement agencies as well as international organisations for exchange of information and intelligence, and conduct joint operations where suitable.
Note: The 24 chemicals listed in the 1988 Convention include Acetic anhydride, N-Acetylanthranilic acid, Ephedrine, Ergometrine, Ergotamine, Isosafrole, Lysergic acid, 3,4-Methylenedioxyphenyl-2-propanone, Norephedrine, Phenylacetic acid, 1-Phenyl-2-propanone, Piperonal, Potassium permanganate, Pseudoephedrine, Safrole, Acetone, Anthranilic acid, Ethyl ether, Hydrochloric acid, Methyl ethyl ketone, Piperidine, Sulphuric acid, Toluene and Alpha-phenylacetoacetonitrile.
Ends/Wednesday, April 22, 2015
Issued at HKT 18:25
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