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Hong Kong Reaffirms Anti-Tax Evasion Commitment

by Mary Swire,, Hong Kong

30 April 2015

Hong Kong's Secretary for Financial Services and the Treasury, K C Chan confirmed that the Government and regulators remain fully committed to combating money laundering and tax evasion, following the latest reports of foreign banks being used to open offshore accounts.

In response to a question in the Legislative Council, Chan reiterated that the Hong Kong Monetary Authority (HKMA) and the relevant enforcement authorities will continue to monitor closely the developments emanating from i nquiries or investigations in other jurisdictions, will liaise with overseas regulators as appropriate, and take action if there is any contravention of Hong Kong laws or regulations.

He noted that Hong Kong's Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance imposes "stringent customer due diligence and record-keeping requirements on financial institutions that are consistent with the international standards promulgated by the Financial Action Task Force, and are applicable to overseas branches and subsidiaries of locally-incorporated banks."

The HKMA also requires these banks to take effective measures to mitigate risks arising from tax evasion, Chan added. It conducts regular on-site examination of banks' anti-money laundering and counter-terrorist financing controls, including tax-related controls. It also maintains dialogues with overseas regulators to share various supervisory matters on banking groups.

In addition, financial institutions are required to report any suspicious transactions in relation to proceeds potentially arising from crimes (including money laundering and tax evasion) to the Joint Financial Intelligence Unit that was established by the Hong Kong Police Force and the Customs and Excise Department, and it is a criminal offense for any person willfully and with intent assisting any other person to evade tax.

TAGS: money-laundering | compliance | tax | tax compliance | law | banking | financial services | China | enforcement | offshore | legislation | offshore banking | Hong Kong | standards | regulation | services | Tax | Tax Evasion

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