When it comes to clamping down on money laundering, Hong Kong Monetary Authority chief executive Norman Chan Tak-lam is the man we look up to to lead the fight.
But it seems some people think he could be a suspect, too.
According to legislator Kenneth Leung Kai-cheong, the capo di tutti capi of the local banking world received a call from his bank asking him to close a dormant account, which conceivably could be used for money laundering, unless he could provide proof of income and wealth.
Whichever lender made the call should either receive a special citation for exemplary diligence in client management from the HKMA, or a warning for needlessly annoying its regulator.
Chan, to his credit, was not all offended by the notification, and cited the incident as evidence that the local banking industry is exerting all efforts to combat suspected financial wrongdoings.
Unfortunately, Hong Kong’s integrity as a business city has been challenged by some recent high-profile cases of misconduct in public office, including the investigation of the former graft-buster himself, Timothy Tong.
Some may think the local bank’s notification to Chan was way too much. It’s probably OK for bank staff to call up ordinary mortals like us while we’re neck-deep in work to ask us to take out a personal loan or remind us of our credit card cash balance, but to imply that the central bank chief may be involved in some financial shenanigans?
Anyway, it is good to know that no one, not even Chan, is above the rules and procedures of our excellent banking system, unlike the notion being spread by some mainland official who thinks that the HKSAR Chief Executive is above our executive, legislative and judicial institutions.
As Kenneth Leung pointed out, Chan and other senior executives in public service, including himself, are subject to special attention from banks because they are “politically exposed persons” or PEPs.
People with PEP status take much longer time to set up an account or to have it processed because their accounts could more prone to money laundering, or so they say.
Chan’s real-life story comes on the heels of a report that money-laundering cases received by the Commercial Crime Bureau surged 79 percent in the first half from a year earlier, with nine serious cases involving a combined amount of HK$456 million.
Now we understand why more of the newly hired bank staff are for compliance than for sales and marketing.
In the aftermath of Lehman Brothers collapse, regulators around the globe are tightening their rules and ramping up their restrictions on banks.
And all these compliance hurdles are reflected in the unexciting results of global banks, including HSBC, which was once the world’s most profitable bank. This raises the question: are the rules intended to cure banks now slowly killing them?
I also gathered from a friend that it’s so difficult to send money to his kid staying in another country because he can’t produce a proof of address.
Mind you, kids are well-traveled these days and they have no address proof in Hong Kong because they don’t pay utility bills here – and they are not PEPs.
Let’s take Chan’s case in the most positive light: banks are not treating their wealthy clients as criminals, but somehow their system cannot tell one PEP from another.
HK money laundering cases jump 79% in first half (Oct. 12, 2015)
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