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Consultation on reporting system on cross-boundary transportation of large quantities of currency and bearer negotiable instruments

     The Security Bureau today (July 21) launched a three-month public consultation on the establishment of a reporting system on the physical cross-boundary transportation of large quantities of currency and bearer negotiable instruments (CBNIs) (the R32 System).

     A spokesman for the Security Bureau said, "This is an effort to move towards compliance with standards established under Recommendation 32 of the Financial Action Task Force (FATF). FATF has put in place 40 Recommendations, setting out a comprehensive framework of measures on anti-money laundering and counter-financing of terrorism. The R32 System is one of the measures necessary in such a framework. The purpose is to enable law enforcement agencies to detect and stop the physical movement of illicit funds across the boundaries of different jurisdictions."

     Under FATF's definition, "currency" refers to domestic banknotes and coins in circulation as well as foreign currency, whereas "bearer negotiable instruments" include monetary or negotiable instruments in bearer form such as traveller's cheques, cash cheques, promissory notes and money orders.

     According to the Government's proposal, passengers arriving in Hong Kong carrying CBNIs valued at over HK$120,000 should, when undergoing Customs clearance, use the Red Channel under the prevailing Red and Green Channel System and make a declaration. Passengers who do not carry CBNIs exceeding such a threshold can go through the Green Channel. Those leaving Hong Kong will need to disclose the amount of CBNIs carried when asked by a Customs officer. Persons responsible for the import or export of cargoes containing CBNIs above the designated threshold should make an advance declaration through an electronic system, in line with the existing systems for the clearance of cargoes.
     The spokesman said, "The proposed reporting requirements accompany existing Customs clearance practices, and seek to facilitate compliance by members of the public and minimise disturbance caused in view of the huge volume of passenger and cargo flow into and out of Hong Kong every day.

     "The proposed designated threshold of HK$120,000 was drawn up with reference to FATF's recommended threshold at USD/EUR15,000. It is largely comparable to or even more relaxed than the thresholds of many other FATF members."
     The spokesman said the R32 system is not and should not be regarded as currency control. Members of the public would still be free to bring or transport any amount of cash into and out of Hong Kong. What they need to do is to report to the authority if the amount is over the designated threshold.

     "As electronic payment is becoming more common with the advances in banking and financial services, the R32 System should have minimal impact on the average traveller and cross-boundary trade and business transactions.

     "As a member of FATF, Hong Kong has to ensure compliance with its Recommendations. Indeed all other FATF member jurisdictions have already taken steps to meet the requirements under Recommendation 32."

     The Government will arrange consultation sessions with the relevant trades during the consultation period. Detailed legislative proposals will be prepared subject to the views received in the consultation exercise.

     The consultation paper can be downloaded from . Members of the public are welcome to send in their views to the Narcotics Division of the Security Bureau by mail (30/F, High Block, Queensway Government Offices, 66 Queensway, Hong Kong), by fax (2810 1773) or by email
( on or before October 20, 2015.

Ends/Tuesday, July 21, 2015
Issued at HKT 14:34


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