Hong Kong Banks Warned To Be Vigilant Over Money Laundering

by Carla Johnson, Investors Offshore.com

29 November 2001

In a circular released on Monday, the Deputy Chief Executive of the Hong Kong Monetary Authority, David Carse, warned banks to be especially vigilant when dealing with non-banking financial institutions such as money changers.

The circular talked about 'know your customer' rules in light of the stepped-up international fight against money laundering, and advised careful and constant monitoring as opposed to ad-hoc reporting. Money changers were especially singled out for mention, according to Mr Carse, because: 'as part of their day-to-day business, [they] normally handle a large amount of bank notes in different currencies.'

Mr Carse warned that even if the nature of their customer's business typically involved handling large amounts of cash, banks should not automatically regard the transaction as above board. 'Nor should it be assumed that, because the customer is registered with the police as a money changer, the [authorised institution] does not need to conduct its own due diligence or ongoing monitoring,' he warned.

The Deputy Chief of the HKMA closed by advising Hong Kong based banks that if suspicions arose concerning any customer, they should file a report immediately with the jurisdiction's Joint Financial Intelligence Unit.

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