Hong Kong has over the past 10 months frozen around HK$2.8 million in funds that were suspected to be linked to money laundering or terrorist financing, according to Arthur Yuen Kwok-hang, deputy chief executive of the Hong Kong Monetary Authority (HKMA).
Speaking at an anti-money laundering (AML) conference on Monday, Yuen said the regulatory action came after authorities stepped up efforts to combat money laundering activities by setting up a special task force.
In May last year, the Commercial Crime Bureau of Hong Kong Police, in collaboration with the HKMA, the Hong Kong Association of Banks and a number of banks, launched a 12-month pilot project and formed the Fraud and Money Laundering Intelligence Taskforce.
The move was aimed at enhancing the detection and prevention of serious financial crime and money laundering threats.
Outlining the positive outcome of the initiative, Yuen told people gathered for the 10th Annual AML & Financial Crime Conference – Asia Pacific on Monday that 71 people have been arrested for their connection to the seized funds.
Suspicious transactions reported by banks in Hong Kong rose 25 percent in 2017 compared to the previous year, which shows the banking industry has taken an aggressive approach to bring down risks, Yuen said at the event organized by the Association of Certified Anti-Money Laundering Specialists (ACAMS).
At the same time, Yuen pointed to pitfalls that may arise if authorities stretch things too far.
Enhanced anti-money laundering systems can help gather more customer information and put more scenarios under monitoring, but they may not always prove the most effective route, he said.
An overly-aggressive approach could lead to situations such as de-risking, which involves terminating or restricting business relationships with companies or other banks, the HKMA official noted.
As such, Yuen urged financial institutions to pay attention particularly to some aspects that could make huge impact on their anti-money laundering efforts.
They include added focus on innovation and technology that make financial services more convenient but provide possibilities for financial crime as well; using artificial intelligence and data analysis that can detect abnormal transactions more easily; sharing information with both the public sector and the private sector; and making sure that related risks are perfectly understood.
In other comments, Yuen revealed the first-ever risk assessment report prepared jointly by the government, law enforcement authorities, financial regulatory authorities and other institutions on money laundering and terrorist financing will be made public shortly
Once the report is ready, the HKMA will share the risks it identifies with banks and stored value facility licensees, Yuen said.
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