An expert in international financial law has published a commentary broadly supporting the guidance paper on combating trade-based money laundering (TBML) that the Hong Kong Association of Banks (HKAB) recently published (Trade-based Financial Crimes News, 8 February 2016).

But senior fellow with the University of Hong Kong’s Asian Institute for International Financial Law, Dr Bryane Michael, says it is too early to gauge the effectiveness of the new guidelines.

Serious intent

Michael’s view is that Hong Kong is most likely at the centre of a vast TBML network, and that the island’s lax control over transactions makes it a jurisdiction “attractive for trade and investment but also for more nefarious activities.”

In his view, HKAB’s guidance paper shows that Hong Kong’s banks seriously want to fight money laundering and the financing of terrorism.

He explains that the guidance represents self-regulation, but not like the stock exchange’s or that of the legal or other professions and notes that the Hong Kong Monetary Authority “expects every [financial institution] to give full consideration to the adoption of the practices this paper recommends.”

Time will tell

He concludes that the guidance provides a much-needed resource for financial institutions unable to afford to translate Hong Kong’s now extensive anti-money laundering (AML) legislation into good practice.

But he warns that only statistical analysis and econometric studies will tell for sure whether the guidance, alongside Hong Kong’s AML legislation will result in less money laundering.

Categories: Trade Based Financial crimes News