********************************************************
Hong Kong's efforts against money laundering and counter financing of terrorism regimes have been recognised in a mutual evaluation report published today (July 21) by the Financial Action Task Force on Money Laundering (FATF) and the Asia/Pacific Group on Money Laundering (APG).
The FATF is the international standard-setter on anti-money laundering and counter financing of terrorism (AML/CFT). The report was endorsed at an FATF Plenary meeting last month (June) and the APG annual meeting this month (July).
In overall terms, the report recognised the strengths of Hong Kong's AML/CFT regimes. The assessment team welcomed the setting up of the Central Co-ordinating Committee on Anti-Money Laundering and Counter Financing of Terrorism chaired by the Financial Secretary and said it was a development in the right direction.
The report commended Hong Kong for its good legal structure with a satisfactory conviction rate for money laundering offences, clear and broad obligations for reporting suspicious transactions, and strong law enforcement efforts.
The report found the supervisory regime over the banking, securities and insurance sectors effective with comprehensive obligations and a fairly broad range of sanctions.
The report acknowledged the prompt provision of a wide range of international co-operation, and proactive and effective outreach to the private sector in raising its awareness. The report also commended Hong Kong's Joint Financial Intelligence Unit as proactive and effective.
The report has identified a few areas requiring improvement. It noted that while many preventive measures had been implemented by the financial sectors through effective enforceable means and by some of the designated non-financial sectors (i.e. lawyers, accountants, estate agents, trust and company services providers, and dealers in precious stones and metals) through guidelines, legislation had yet to be put in place.
In response, a government spokesman said the Government would formulate necessary legislative proposals in due course having considered carefully the comments in the report.
The report noted that the authorities had been taking a robust line in dealing with the remittance agents and money changers in law enforcement aspects, but recommended an enhancement in the AML/CFT regulation over the industry.
In this connection, the spokesman said, "The Government will take positive steps in addressing this issue and will consult the industry on the concrete proposal when ready."
On some limitations in the legislation against the financing of terrorism that were noted in the report, the spokesman said the Government would expedite the completion of the necessary subsidiary legislation in this regard as soon as possible.
The Narcotics Division of Security Bureau led the Hong Kong delegation to the FATF Plenary meeting and the APG annual meeting with representatives from the Financial Services and the Treasury Bureau, Hong Kong Monetary Authority, Securities and Futures Commission, Office of the Commissioner of Insurance, Department of Justice, Hong Kong Police Force, Customs and Excise Department, and Companies Registry.
As a member of the FATF, Hong Kong is obliged to adopt the 40 Recommendations for fighting money laundering and the nine Special Recommendations for combating financing of terrorism (known collectively as "40+9 Recommendations") as far as practicable.
Hong Kong was evaluated for the first time since the FATF "40+9" Recommendations were revised in 2003.
The joint mutual evaluation was conducted by an assessment team comprising experts from both FATF and APG members. Through mutual evaluation, FATF and APG members assess each other's compliance with the 40+9 Recommendations and help identify areas for improvements.
Hong Kong has been a FATF member since 1991 and a founding member of APG since 1997.
The report can be obtained from the FATF website at www.fatf-gafi.org or APG website at www.apgml.org.
Ends/Monday, July 21, 2008
Issued at HKT 16:26
NNNN