To Report or Not to Report: Hong Kong Money Laundering Requirements

Hong Kong has long been recognised as one of the most liberal economies in the world. Foreign businesses can easily enter the market, there are no restrictions on the movement of capital in and out of the territory, nor are there any exchange controls. Yet it is this very freedom which leaves Hong Kong vulnerable to money laundering. As has been noted by the Financial Action Task Force in its Typologies Report, financial intermediaries are sometimes (innocently) caught up in such operations.

Requirements to report

The Hong Kong Government has attempted to address this problem by enacting legislation which requires any person who knows or suspects that any property may relate to drug trafficking, to an indictable offence or to terrorist activity, to report to an authorised officer. Failure to disclose may result in a person being found guilty of an offence, for which he or she may be liable to a fine of HK$50,000 and 3 months imprisonment.

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